Pfeiffer Vacuum Annual Report 2017

Pfeiffer Vacuum Annual Report 2017
Key Figures
Corporate Profile
Content
Letter from the Chief Executive Officer
Report of the Supervisory Board
International. United. Strong
Global Advantage: Interview with the new Management Board
International Growth
Worldwide Collaboration
Strong Roots
Vacuum Solutions
Product Portfolio
Share Performance
Financial Reporting Detailed Index
Management’s Discussion and Analysis / 2017 Course of Business
Economic Conditions 2017
The Pfeiffer Vacuum Group
Profitability, Financial Position, and Liquidity
Non-financial Performance Indicators
Corporate Governance Report and Declaration on the Corporate Governance
Risk and Opportunities Report
Subsequent Events / Outlook
Consolidated Financial Statements / Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Certification of Legal Representatives
Independent Auditors’ Report
Addresses Worldwide
Consolidated Statements of Income (6-Year-Overview)
Contacts / Financial Calendar 2018
Imprint

KEY FIGURES Sales and proﬁt Total sales Germany Other countries Operating proﬁt Net income Return on sales Operating cash ﬂow Balance sheet Total shareholders’ equity and liabilities Cash and cash equivalents Shareholders’ equity Equity ratio Return on equity Capital expenditures Workforce Workforce (average) Germany Other countries Personnel costs Per employee Sales per employee Per share Earnings Dividend 1 Subject to the consent of the Annual General Meeting 2017 2016 Change 586,962 98,715 488,247 71,386 53,848 9.2 71,397 553,361 97,402 320,937 58.0 16.8 27,678 2,809 935 1,874 474,244 78,254 395,990 67,976 47,032 9.9 63,616 459,322 110,032 315,574 68.7 14.9 18,018 2,385 892 1,493 190,970 157,618 68 209 5.46 2.00 1 66 199 4.77 3.60 23.8 % 26.1 % 23.3 % 5.0 % 14.5 % – 0.7 Pp 12.2 % 20.5 % – 11.5 % 1.7 % – 10.7 Pp 1.9 Pp 53.6 % 17.8 % 4.8 % 25.5 % 21.2 % 3.0 % 5.0 % 14.5 % – 44.4 % K € K € K € K € K € % K € K € K € K € % % K € K € K € K € € € All percentages in this Annual Report were derived on the basis of amounts in thousands of euros. Rounding differences might result from their presentation in millions of euros.

CORPORATE PROFILE Pfeiffer Vacuum – a name that stands for innovative solutions, high technology and dependable products, along with ﬁrst-class service. For more than 125 years we have been setting standards in vacuum technology with these attributes. One very special milestone was the invention of the turbopump at our Company more than 50 years ago. Thanks to our know-how, we continue to be the technology and world market leader in this ﬁeld. To no small degree, this also manifests itself in our strong proﬁtability. Our extensive line of solutions, products and services ranges from vacuum pumps, measurement and analysis equipment right through to complex vacuum systems. And quality always plays a key role in this connection: Products from Pfeiffer Vacuum are constantly being optimized through close collaboration with customers from a wide variety of industries, through ongoing development work and through the exceptional enthusiasm and commitment of our people. These are virtues that we will continue to embrace! ¡ Headquarters: Asslar, Germany ¡ Established: 1890 ¡ Purpose of the Company: To develop, manu- facture and market components and systems for vacuum generation, measurement and analysis as well as helium leak detectors ¡ Manufacturing sites: Asslar, Germany; Göttingen, Germany; Annecy, France; Asan, Republic of Korea; Cluj, Romania; Indianapolis, USA; Yreka, USA; Ho Chi Minh City, Vietnam ¡ Workforce worldwide: 2,945 people group.pfeiffer-vacuum.com

2 C O N T E N T CONTENT4Letter from the Chief Executive Ofﬁcer8 Report of the Supervisory Board12 International. United. Strong14 Global Advantage: Interview with the new Management Board20 International Growth30Worldwide Collaboration34Strong Roots 44Vacuum Solutions46 Product Portfolio48 Share Performance52 Financial ReportingDetailed Index53 Management’s Discussion and Analysis90 Consolidated Financial Statements95 Notes to the Consolidated Financial Statements130 Certiﬁcation of Legal Representatives131 Independent Auditors’ Report140 Addresses Worldwide142 Consolidated Statements of Income(6-Year-Overview)Additonal Information on ﬁrst pages: Key FiguresCorporate Proﬁle Additonal Information on last pages:Contacts / Financial Calendar 2018Imprint / Financial Glossary

Pfeiffer Vacuum Technology AG – Annual Report 2017 3 14GLOBAL ADVANTAGE: INTERVIEW WITH THE MANAGEMENT BOARDFor years, Pfeiffer Vacuum has belonged to the top players in the sector and continues to reach milestones with its technological impulses. The Company’s inter-national orientation is a prerequisite for this success. In an interview, the new Management Board will discuss the Company’s future strategic orientation.20INTERNATIONAL GROWTHIn our globalized world, international cooperation and a worldwide presence are prerequisites for economic growth. For this reason, Pfeiffer Vacuum carried out trailblazing acquisitions in 2017, further strengthening its position with its takeover of three companies in strategically signiﬁcant business areas.34 STRONG ROOTSPfeiffer Vacuum is closely linked with the regions around its two main company locations, Asslar in Central Hesse and Annecy in Southern France. The company fosters close friendships with partner companies, associations and clubs in the neigh-borhood and encourages the exchange between the employees of its two largest locations. 30WORLDWIDE COLLABORATIONPfeiffer Vacuum‘s products are in use all around the world. In more than 60 countries, our vacuum experts support the customers on site. The global corporation between the international subsidiaries guarantee the high-quality performance of the Company.

Pfeiffer Vacuum Technology AG – Annual Report 2017 5 In my view, global developments in the ﬁelds of digitalization, alter- native energy and biotechnology are among the most signiﬁcant drivers of growth for our market. The digital revolution has created an enormous demand for memory chips, processors as well as displays for computers and mobile phones. Without vacuum and testing technology – particularly from our Company – production of these items would simply not be possible. If we are to keep up with the changing market, we have to be proactive. My colleagues from the Management Board and I have therefore devised a strate- gic program consisting of four main points. We aim to implement this strategy quickly. Firstly, we must expand our production capacity, which we have already begun doing. Secondly, we will start to invest more in R&D to secure a better footing in terms of innovation. Thirdly, we are planning further investments in the expansion of our international presence with the ‘Global Footprint’ and ‘Global Sourcing’ programs. The focus here will lie on the Asian markets – particularly China – which are becoming increasingly signiﬁcant for us. Fourthly, the rapid development in the ﬁeld of digitalization should not only be embraced for new orders, but also to ensure that our Company is equipped with state-of-the-art IT. This includes integrating the new Industry 4.0 standards into our daily processes. It is my goal to advance the automation of all workﬂows and processes in each business unit. The buzzwords of today are among others ‘aug- mented reality’, the handling of ‘big data’ and the introduction of ‘cobots’ – industrial robots that work side by side with people. It is imperative to keep up with these trends. However, we can only realize these ambitions by placing our employees at the center of our growth strategy. One step we are taking is integrating all colleagues at each of our locations and offering them a range of professional development opportunities. Our goal is to utilize the most modern collaborative work methods as well as global learning platforms. All these aspects create the foundation for the efﬁciency, perfor- mance and ultimately for the quality we have come to expect of Pfeiffer Vacuum products and services. Dear Shareholders, on behalf of the Management Board, I would like to thank you for the trust you have placed in us this last year. We hope to have you with us at our side in 2018 as we continue along the path towards further sustainable growth. We at Pfeiffer Vacuum Technology AG have a very eventful year behind us. Despite all the internal and external challenges we were facing, we were able to bring 2017 to a close with very good results. By that I do not just mean the ﬁnancial ﬁgures, which certainly continued the positive trend from 2016 and which attest to the Group’s stable growth: for example, we experienced an increase in sales of more than 23 percent compared to the same period last year, reaching a record high of € 587 million. More than that, I mean those results that cannot be represented in a fact sheet table. Together, we were able to ride out the tur- bulence that had built up in connection with the takeover bids from the Busch Group. We have a very good feeling about the new, long-term anchor shareholder and are very optimistic about the future. Prospectively, I would like to fully exploit the potential of our Group companies in future. The change in leadership all went smoothly. After Mr Bender’s de- parture, Pfeiffer Vacuum was able to ﬁnd experienced successors in Ms Benedikt as the new CFO, and myself as CEO. I have worked in the vacuum industry for the last 30 years, the last seven being spent at Pfeiffer Vacuum in various capacities, including heading the Business Unit Semiconductor and Coating. I am full of pride and gratitude to have been given the opportunity to lead Pfeiffer Vacuum towards a successful future. I am looking forward to taking on this challenge, which will consist of consolida- ting “our Pfeiffer Vacuum’s” position in the industry on a national and international level in the years ahead. It is important to me that each and every employee lives and embodies the values that our Company represents and that make us unique. For my fellow Board members and me, this means the passion for cutting-edge tech- nology, customer satisfaction, team spirit, sustainability and ethi- cal practices. I am conﬁdent that Pfeiffer Vacuum is capable of taking its place as the international market leader in vacuum technology. As our 2017 ﬁgures show, we are already off to a good start. This is further underpinned by the end-of-year balance of over € 127 million on the books – a 76 percent increase compared to the previous year. We could pat ourselves on the back and simply carry on “business as usual”, but that is not my approach. While I believe our current growth strategy is working, my fellow board members and I are in full agreement that some ﬁne-tuning is necessary. And we want to pick up the pace. Dr. Eric Taberlet, CEO of Pfeiffer Vacuum Technology AG

8 R E P O R T O F T H E S U P E R V I S O R Y B O A R D REPORT OF THE SUPERVISORY BOARD Dear Shareholders, In ﬁscal 2017, the Supervisory Board of Pfeiffer Vacuum Technology AG correctly fullﬁlled all the duties vested in it by law, the Articles of Association and the Supervisory Board’s rules of procedure. It monitored the work of the Management Board with in the scope of its legal duties, accompanied and advised on the strategic further development of the Company and satisﬁed itself about the legality and expediency of the managerial work on the basis of the Manage- ment Board’s reports. Furthermore, the Supervisory Board contin- uously monitored the organization of the Company and Corporate Group and the cost-effectiveness of corporate management. In addition, a regular exchange of information took place between the Supervisory Board and/or the Supervisory Board chairman and the Management Board. Cooperation between Supervisory Board and Management Board In the view of the Supervisory Board, the Management Board in- formed the Supervisory Board and/or the Supervisory Board chair- man regularly, comprehensively and in a timely manner about the competitive environment, planned business policy and all strategic and crucial operational decisions in the course of the past ﬁscal year. In the same way, the Management Board discussed key ﬁnancial ﬁgures with the Supervisory Board as a basis for evalu- ating the economic situation of the Company. The Management Board reported during Supervisory Board meet- ings in oral or written form and replied within this setting to ques- tions from the Supervisory Board. Outside of the meetings, the ex- change of information with the Supervisory Board was also ensured with regular reports on the economic development of the Company and the Corporate Group and on the key occurrences within Pfeiffer Vacuum Technology AG. The Supervisory Board is satisﬁed that Management Board reporting met the statutory and Supervisory Board’s requirements. In ﬁscal 2017, business transactions requiring approval were decided by the Supervisory Board and, under certain conditions, also by individual committees, after these had adequately reviewed and discussed the issues with the Management Board. Personnel changes in Supervisory Board and Management Board With effect from October 25, 2017, both Dr. Michael Oltmanns (up until then chairman of the Supervisory Board) and Dr. Wolfgang Lust stepped down from the Supervisory Board by resigning from their ofﬁce. Ayla Busch was appointed as new member of the Supervisory Board with effect from October 26, 2017 by the Local Court of Wetzlar and was then elected as chairwoman of the Supervisory Board by the members. With effect from March 19, 2018, Henrik Newerla was appointed as new member of the Supervisory Board by the Local Court of Wetzlar. In the Management Board, the previous Chief Executive Ofﬁcer Manfred Bender was recalled for good cause with effect from November 27, 2017. The Supervisory Board appointed Dr. Eric Taberlet as his successor with effect from November 27, 2017. Furthermore, the Supervisory Board appointed Dr. Ulrich von Hülsen with effect from August 1, 2017 and Nathalie Benedikt with effect from November 27, 2017 to the Management Board. Nathalie Benedikt assumes the role of Chief Financial Ofﬁcer (CFO). This appointment fulﬁlls the requirements of good corpo- rate governance with regard to the exercise of departmental responsibility for ﬁnances in a role that is separate from the chairmanship of the Management Board. With the appointment of Ayla Busch on October 26, 2017, this was the ﬁrst time that a woman was appointed to the Supervisory Board and, moreover, was elected as Supervisory Board chairwoman. Until March 19, 2018, the Supervisory Board recorded a 20 % proportion of women; from this date on, the percentage is 16.7 %. On the Management Board of the Company, with the appointment of Nathalie Benedikt, the proportion of women is 25 % as of Novem- ber 27, 2017.

Pfeiffer Vacuum Technology AG – Annual Report 2017 9 Supervisory Board meetings and issues of Supervisory Board work During 2017, the Supervisory Board informed itself about the current situation of the Company and the Corporate Group in a total of 20 meetings and discussed this in detail with the Management Board. The meetings on January 9, February 14, March 22, May 12, May 23, June 21 and August 1, 2017 focused on the corporate acquisitions made in Europe and the U.S. in the year under review. Other issues were the new construction of the production location in Cluj, Roma- nia, and the overreaching global production strategy – Global Foot- print. The focus of dis cussions during the ﬁrst half-year were the acquisition of additional equity in Dreebit GmbH in Dresden and the acquisitions of Advanced Test Concepts, Inc. in India napolis, Indiana, USA, as well as of Nor-Cal Products Holdings, Inc. in Yreka, California, USA. A total of ﬁve of these seven meetings attended by all members of the Supervisory Board were held in the form of a telephone conference. At the meetings held on January 26, February 24, March 6, March 31, April 3, April 11, April 13, April 19 and April 25, 2017, the Super- visory Board dealt with the voluntary takeover bids from Pangea GmbH and particularly focused on evaluating the bid documents, the wording of the responses and the fairness opinions of the ﬁnan- cial advisors engaged. All of these meetings were held in the form of a telephone conference. All members of the Supervisory Board were present at these nine meetings. During the telephone conference meetings held on May 26 and September 15, 2017, the Supervisory Board addressed the issue of extending the term of ofﬁce of the Management Board mem- ber Dr. Matthias Wiemer and the contract of employment of the former Chief Executive Ofﬁcer Manfred Bender. Here, also, all members attended the meetings. At the meetings on March 22, May 23, August 1, October 26 and November 27, 2017, the Board dealt with the general course of busi- ness, ﬁnancial results and the strategic orientation of the Company, measures for continuing to boost proﬁtability and efﬁciency of the overall company and evaluation of analyses of the consequences in connection with the application of IFRS 15 from the year 2018. All members attended these meetings. At the meeting on October 26, 2017, the Supervisory Board also dealt with budget planning for the year 2018 and the Management Board’s schedule of responsibilities. The ﬁnal consideration of the Management Board’s schedule of responsibilities took place in the meeting on November 27, 2017. At the meeting on October 26, 2017, the Supervisory Board also deliberated on the Compliance Management System and the Com- pliance Organization of the Company. It was decided to review the Compliance Management System by an independent appraiser. Due to the results, an enhancement and adaptation of the Com- pliance Management System is currently taking place with external support. Supervisory Board Committees The Supervisory Board in its composition up to and including October 25, 2017 established four committees: ¡ A Management Board Committee, ¡ An Administration Committee, ¡ A Nomination Committee and ¡ An Audit Committee. The Supervisory Board also decided in its meeting on October 26, 2017 to dissolve the Administration Committee in order to strengthen teamwork within the Supervisory Board. Measures and business that are subject to approval will in future require the consent of all members of the Board. After the Supervisory Board members Dr. Michael Oltmanns and Dr. Wolfgang Lust resigned on October 25, 2017 and Ayla Busch joined the Supervisory Board on October 26, 2017, special elections were held, with the result that the composition of the remaining committees from October 26, 2017 is as follows: Management Board Committee ¡ Ayla Busch (chairwoman) ¡ Filippo Th. Beck ¡ Götz Timmerbeil Nomination Committee ¡ Ayla Busch (chairwoman) ¡ Filippo Th. Beck ¡ Götz Timmerbeil Audit Committee ¡ Götz Timmerbeil (chairman) ¡ Filippo Th. Beck ¡ Ayla Busch The Management Board Committee held its ﬁrst meeting on May 22, 2017. In this meeting, the Supervisory Board focused principally on the extension of contract and re-appointment of Dr. Matthias Wiemer as well as the enlargement of the Management Board mid- year to include Dr. Ulrich von Hülsen. In its meeting on November 26, 2017, the Management Board committee dealt with the prepa- ration of the overall Supervisory Board meeting held on November 27, 2017 in which, among other things, the former Chief Executive Ofﬁcer Manfred Bender was recalled for good cause. All meetings of the Management Board Committee were attended by every member.

10 R E P O R T O F T H E S U P E R V I S O R Y B O A R D The ﬁrst meeting of the Administration Committee in the year under review was held on April 22, 2017. At this meeting, the joint state- ment of the Management Board and Supervisory Board concern- ing the voluntary takeover bid by Pangea GmbH was discussed in detail, in consultation with the attorney Dr. Thomas Zwissler from the law ﬁrm Zirngibl Rechtsanwälte. At the meeting on May 22, 2017, the Administration Committee dealt with the consulting ser- vices provided for the Company since the year 2010 by the law ﬁrm Menold Bezler (of which the former Supervisory Board chairman Dr. Michael Oltmanns is a partner). All members took part in all meetings of the Administration Committee. The review of the individual Annual Financial Statements and the Consolidated Financial Statements for the ﬁscal year 2016 took place in the Audit Committee meeting on March 22, 2017. A further meeting was held on November 27, 2017. The Audit Committee was in regular contact with the auditor and discussed and decided upon the audit procedure, the focus of the audit and any special ques- tions about the audit with the independent auditor. The Audit Com- mittee consulted intensively with the auditor in connection with the explanations on the legality, regularity and expediency of the statements and the critical assessment of the concept and risks. All members attended all meetings of the Audit Committee. No meetings of the Nomination Committee were held in the ﬁscal year 2017. Corporate Governance The Supervisory Board recognizes the principles of good governance and also addressed this issue in ﬁscal 2017. An essential basis for this is the extensive recognition of the recommendations of the German Corporate Governance Code (GCGC) based on the version of February 7, 2017. This does not preclude deviating from the GCGC recommendations in individual justiﬁed cases. As a listed company, Pfeiffer Vacuum Technology AG is subject to the obligation under § 161 (1) of the German Stock Corporation Act (“AktG”) to declare the extent to which the recommendations of the German Corporate Governance Code have been and will be complied with, or which recommendations have not been or will not be applied, and to jus- tify deviations from recommendations (statement of compliance). The Management Board and the Supervisory Board deﬁned a state- ment of compliance on October 26, 2017 (amended with Super- visory Board resolution of January 24, 2018), which can be accessed on the Company’s website. At the same time, the efﬁciency audit of the Supervisory Board was conducted diligently on the basis of extended criteria, compared to previous years, in the meeting held on October 26, 2017. The members of the Supervisory Board of Pfeiffer Vacuum Tech- nology AG are obliged to disclose to the Supervisory Board any possible conﬂicts of interest, in particular those which could arise through consulting or executive functions at customers, suppliers, lenders or other third parties. With the exception of commissioning the law ﬁrm Menold Bezler in connection with the takeover bid by Pangea GmbH, of which company the former Super visory Board chairman Dr. Michael Oltmanns is a partner, there were no indica- tions of actual or potential conﬂicts of interest in the ﬁscal year 2017. Audit of Annual and Consolidated Financial Statements In accordance with the resolution of the Annual General Meeting on May 23, 2017, Ernst & Young GmbH, Wirtschaftsprüfungsge- sellschaft, Eschborn, Germany, was commissioned to audit the Annual Financial Statements of the Company and the Company’s Consolidated Financial Statements, with the latter being prepared in accordance with International Financial Reporting Standards (“IFRS”), as well as the ﬁnancial statements of the Company’s subsidiaries where prescribed by law. Pursuant to § 315e of the German Commercial Code (“HGB“), consolidated ﬁnancial state- ments presented in accordance with the rules of the German Com- mercial Code were not prepared. The auditor introduced to the Audit Committee the determined audit focus areas. The key audit matters for the audit of the Consolidated Financial State ments were (i) the acquisition of Nor-Cal Products Holdings, Inc., (ii) the recoverability of goodwill and (iii) the account- ing and valuation of current and deferred taxes. For the audit of the Annual Financial Statements, the recoverability of equity invest- ments and loans to afﬁliates were a key audit matter. The Audit Committee agreed to the audit focus areas and key audit matters as determined by the auditor and had no further amendments. The Annual Financial Statements and Management’s Discussion & Analysis as well as the Consolidated Financial Statements pre- sented in accordance with IFRS, together with the Management’s Discussion & Analysis, all for the 2017 ﬁscal year and all of which prepared by the Management Board, were audited by the indepen- dent auditor and received his unqualiﬁed endorsement. The Annual Financial Statements, Management’s Discussion & Analysis for the Company and the Corporate Group, as well as the audit reports from the independent auditor were submitted to all members of the Supervisory Board in a timely fashion. They were discussed in detail at the Audit Committee meeting as well as at the Supervisory Board meeting relating to the ﬁnancial statements on March 20, 2018. The independent auditor attended both meet- ings, reported on the major ﬁndings of his audit and was available to answer additional ques tions from the Supervisory Board. In par- ticular, the progress of projects and the contents of the report on „non-ﬁnancial performance“ and „non-ﬁnancial declaration of the Group“ (NFE) to be published for the ﬁrst time for the ﬁscal year 2017 were discussed in detail between the auditors and the Super -

Pfeiffer Vacuum Technology AG – Annual Report 2017 11 Acknowledgments The Supervisory Board would like to sincerely thank the Manage- ment Board in its present composition, the Employee Council and the entire staff of the Group for their dedication and commitment in the successful 2017 ﬁscal year. Adoption of this Report The Supervisory Board adopted this Supervisory Board Report in the resolution dated March 20, 2018 pursuant to § 171 (2) of the German Stock Corpo ration Act (“AktG”). Asslar, Germany, March 20, 2018 On behalf of the Supervisory Board Ayla Busch Chairwoman of the Supervisory Board visory Board. The review and conﬁrmation of the availability of the NFE by the auditor is the subject of a separate meeting of the Audit Committee prior to the publication of the report on April 30, 2018. The Supervisory Board will inform about the ﬁndings of the review on the occasion of the report to the Annual General Meeting on May 23, 2018. On the basis of its own thorough review, the Super- visory Board concurred with the results of the audit conducted by the independent auditor. Given the concluding results of its review, the Supervisory Board raised no objections to the Annual and Con- solidated Financial Statements. It has approved the Annual and Consolidated Financial Statements, with the Financial Statements thus being formally adopted. The Supervisory Board discussed in detail with the Management Board its proposal regarding the dis- tribution of a dividend and then concurred with the Management Board’s proposal regarding appropriation of the Company’s retained earnings. Additionally, the Management Board of Pfeiffer Vacuum Technology AG has drawn up a report on relationships with afﬁliated companies for the ﬁscal year 2017 (“dependency report”), in accordance with § 312 Sub-Para. 1 of the German Stock Corporation Act (“AktG”) and afterwards presented this report to the Supervisory Board. Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Eschborn, has audited the dependency report and has issued the following audit opinion: „According to our professional audit and judgment we conﬁrm that 1. the actual disclosures in the report are correct and 2. the company’s payment for legal transactions as included in the report was not inadequately high.“ The Management Board’s dependency report as well as the related independent auditor’s report were submitted the Supervisory Board. The Supervisory Board reviewed both, the dependency report as well as the auditor’s report. Final review was made in the Super- visory Board meeting on March 20, 2018. The independent auditor attended this meeting, reported on audit of the dependency report and the major ﬁndings of his audit and was available to answer additional questions from the Supervisory Board. After the ﬁnal review the Supervisory Board concurred with the dependency re- port of the Management Board and the audit report of the auditor and had no objections against the ﬁnal declaration of the Manage- ment Board at the end of the dependency report.

Pfeiffer Vacuum Technology AG – Annual Report 2017 13 We take our success, along with the acquisition of three companies through which the Corporate Group consistently advances its international growth, as an opportunity to show you the signiﬁcance of inter nationality for your Company, Pfeiffer Vacuum. On the following pages, you will come to know about how important this international focus is for Pfeiffer Vacuum and how it harmonizes with the Company’s regional connection. Get acquainted with the companies that were newly incorporated in 2017 and join us for a small tour of our subsidia- ries worldwide. In an interview with the Manage- ment Board, you will also learn about the role inter- nationality will play in the future for Pfeiffer Vacuum.

14 14 V A K U U M I M A L L T A G G L O B A L A D V A N T A G E Quality, reliability, and advanced technological solu- Vacuum technology is important for many mega- tions – these are represented all around the world by trends: the Pfeiffer Vacuum name. For years, the Company has belonged to the top players in the sector and continues to reach milestones with its technological ¡ Renewable energy and power storage ¡ Electromobility, autonomous driving and impulses. The Company’s international orientation is smart vehicles a prerequisite for this success. 83 percent of sales are generated abroad. And business all around the globe is very promising: new energy sources, digita- ¡ Checking and packaging of foodstuffs ¡ Drones and robots ¡ Biotechnology lization, augmented reality and automation make vacuum technology a fundamental aspect of mega- trends in different markets. By expanding its global production capacities, improving its international footprint and equipping its research facilities with new technologies, Pfeiffer Vacuum is strengthening itself for the future demands of its customers. The future needs vacuum technology: Vacuum is employed in countless areas of in- dustry to realize the megatrends of the future. Vacuum is indispensable, especially for the digitalization of our modern world. GLOBAL ADVANTAGE

Pfeiffer Vacuum Technology AG – Annual Report 2017 17 Since November 27, 2017, the Management Board of Pfeiffer Vacuum has consisted of a four-person team chaired by Dr. Eric Taberlet. Together with its 2,945 employees, the quartet aims to make Pfeiffer Vacuum stronger for the future. In the following interview, Dr. Eric Taberlet, Nathalie Benedikt, Dr. Ulrich von Hülsen, and Dr. Matthias Wiemer will discuss the Company’s global potential for growth, the importance of internationality as well the future strategic orientation of Pfeiffer Vacuum. Dr. Taberlet, since November 2017, the new Management Board of Pfeiffer Vacuum is in place, headed by you as CEO. What is your vision for the Company in your new role?Dr. Taberlet: I have worked in the vacuum industry for more than 30 years. The last seven of them, I spent with the Pfeiffer Vacuum Group after they acquired the vacuum division of Alcatel – adixen – where I started my career in 1987. After such a long time in the industry, I am very excited now to take up the challenge and bring our Company a step further along the successful course it has set towards the future. As the development of sales in the past ﬁscal year 2017 impressively proves, we are already on a promising path and I want to do my best to drive this development forward. Therefore, it is crucial for me to fulﬁll every task in line with the essential values of our Company: sustainability, technological leader-ship, cus tomer satisfaction, team spirit and ethically correct business practices. How do you intend to achieve this goal – will there be changes to the company strategy?Dr. Taberlet: The basic principles of the strategy will not change. In my position as head of the Busi-ness Unit Semiconductor & Coating, I was already strongly involved in the development of this strategy and I fully endorse it. Pfeiffer Vacuum will con ti nue to strive to be a global player in the vacuum industry and to occupy a leading position in our ﬁve market segments Semiconductor, Industry, Coating, Ana-lytics and Research & Development. We want to maintain our position as the technological driving force in our industry and hold on to the high quality level of our products to provide our customers with world- class vacuum solutions. But to achieve this, we need to adjust our strategy to the changes that are taking place in our core markets and the industry as a whole. What are these changes and how do you plan to face them strategically?Dr. Taberlet: We see a signiﬁcant change in the semiconductor industry, which is one of the most promising growth markets. New megatrends are currently emerging that represent technological break-throughs for future business. Digitalization, Artiﬁcial Intelligence or Smart Vehicles – i.e. autonomously driving cars – are just a few examples. All the semi-conductor components used in these applications are manufactured with the aid of vacuum equipment. The technologies used in the semiconductor pro-cesses are changing and investments in new fab equipment are signiﬁcantly increasing. In 2017, spen-ding for new semi conductor manufacturing equip-ment already reached an all-time high of $ 57 billion – and a further increase to $ 63 billion is forecasted for 2018. Finally, we are also preparing ourselves for signiﬁcant market growth in China.Dr. von Hülsen: New megatrends which confront us with new challenges and demands are also currently emerging in the Analytics, Research & Development and Industry segments. Energy supply or the advan-ces in biotechnology and life science are examples of these. Our vacuum solutions and leak de tectors are used here for the production of superconductors, batteries, 3D printing systems or high-tech materials as well as for quality control, packag ing of pharma-ceu ticals, quantum computing or in accelerators for cancer therapy. These high-tech applications hold enormous sales potential and we aim to maintain a leading position in all three market segments.

18 G L O B A L A D V A N T A G E Dr. Matthias Wiemer is responsible for the global sourcing and global footprint as well as for the components business of Pfeiffer Vacuum. Close exchange and cooperation between the four Board members is crucial to reach the deﬁned goals. Therefore, weekly Board meetings take place. Dr. Wiemer: We deﬁnitely want to participate in all of these trends and gain market shares. To achieve this, we will invest in innovative technologies to adapt to these new drivers in our core markets so that we are able to provide our customers with the matching products for their applications. Moreover, we will also expand our global footprint and global sourcing to enlarge our worldwide presence. This will enable us to be even closer to our customers in sales, service and supply chains. A special focus will be on Asia, particularly China. But it will remain a core element of our company strategy to be well-balanced and to not rely too intensely on one speciﬁc market seg-ment. This is why all investments and strategic ad-justments explicitly apply to both business units at Pfeiffer Vacuum. Which investments are you planning concretely?N. Benedikt: We will invest in our production capa-cities in the short and medium term to be able to process the increasing number of orders placed by our customers. This includes expansion and moder-nization of our production facilities worldwide – for example, our location in Romania. We also plan on strengthening the innovative force of Pfeiffer Vacuum by investing in our R&D activities to speed up the development of new, innovative products. Therefore, our labs and research facilities will be equipped with new technologies. Also, selective M&A activities to further expand our product portfolio and technologi-cal expertise are part of the company strategy. And last but not least, we will implement Industry 4.0 standards in our daily operations.

Pfeiffer Vacuum Technology AG – Annual Report 2017 19 Nathalie Benedikt has been CFO of the Pfeiffer Vacuum Technology AG since November 2017. Since August 2017, Dr. Ulrich von Hülsen has been a member of the Management Board. Developing high-tech vacuum solu- tions for the demands of the future megatrends, an expanded global foot- print, local proximity to the customers as well as the digitalization of the in- ternal processes are the main focus points of the company strategy. Please explain how you plan to make use of the opportunities provided by Industry 4.0!N. Benedikt: The Management Board wants to make Pfeiffer Vacuum strong for the digitalized future by taking full advantage of Industry 4.0. Perspectively, we want to implement more automation in our world-wide manufacturing facilities. The Cobot concept – i.e. a shared workspace between a robot and human employees – is very interesting for some manual tasks. Also Augmented Reality will play a major role in our production and design departments in the future. Using artiﬁcial intelligence and big data explo- ration to help improve the operations at our custo-mers‘ will be another huge task not only for our R&D department but also for our IT infrastructure. Moreover, I consider it essential that our employees are able to globally cooperate fast in real-time. This requires new modern collaboration technologies in the Pfeiffer Vacuum facilities around the globe.What role do employees play in this strategy?N. Benedikt: Our employees are the most impor-tant part of the strategy. Without them and their enormous expertise, we would not be able to reach even one of the deﬁned goals at all. This is why we put our employees at the heart of our strategy. My Management Board colleagues and I want to estab-lish a global improvement program that aims at en-hancing worldwide cooperation of all employees by using agile project management and visual manage-ment methods. Moreover, our global learning plat-form gives employees the opportunity to take part in advanced trainings on technical topics, project management techniques or general skills. In an in-ternational company like Pfeiffer Vacuum, world wide collaboration between our employees is crucial to make use of the comprehensive know-how and the speciﬁc competence of each and every one. Only by doing so will we be able to enhance and fulﬁll our customers‘ demands.

Pfeiffer Vacuum Technology AG – Annual Report 2017 21 In our globalized world, international cooperation and a worldwide presence are prerequisites for economic growth. For this reason, Pfeiffer Vacuum carried out trailblazing acquisitions in 2017, further strengthening its position with its takeover of three companies in strategically signiﬁcant business areas. service, plant construction, and software develop- ment, were tapped into. Today, Dreebit has some 50 employees at its locations in Dresden and Groß- röhrsdorf in Germany. With its high quality of service and process, Dreebit will be a central part of Pfeiffer Vacuum’s future international service strategy. ATC Nor-Cal The U.S.-American company Nor-Cal Products Inc. is a leading manufacturer of vacuum components with a special focus on the semiconductor industry. Furthermore, the company has identiﬁed a very in- teresting growing market for medical technology in North America. Nor-Cal was established in 1962 in Yreka, California, USA, and has production sites at its headquarters in Yreka and in Ho Chi Minh City, Vietnam. Altogether, the company has 335 employ- ees worldwide. Its portfolio encompasses high- quality vacuum components, chambers, and valves for large international customers of the semicon- ductor, coating, and display sectors as well as lea- ding universities and research institutes. With this transaction, Pfeiffer Vacuum aims to signiﬁcantly strengthen its position in the very attractive market of vacuum components. The merger makes Pfeiffer Vacuum a leading supplier in the important, growing U.S. market. Our common American customers will proﬁt from a wider product portfolio, new technolo- gical solutions, and a more comprehensive sales network. At the same time, the sales and marketing of Nor-Cal through Pfeiffer Vacuum’s signiﬁcantly stronger distribution network in Asia will make sub- stantial sales increases possible. Advanced Test Concepts (ATC), headquartered in Indianapolis, Indiana, U.S., is a provider of innovative leak testing systems. The company was founded in 1987 and ﬁrst specialized in testing equipment for quality control in the automotive industry. From there, its portfolio of leak testing equipment and methods steadily developed into different areas. In 2000, ATC introduced a new leak detection technology onto the market: the Micro-Flow Sensor and Mass Extraction instruments. ATC holds numerous U.S.-American and international patents. With this acquisition of the corporation, Pfeiffer Vacuum consistently expands its existing product portfolio for leak detection and has gained groundbreaking leak detection technolo- gy with the patented Micro-Flow technology from ATC. With access to new applications and alternative technologies, Pfeiffer Vacuum will become the market leader in non-destructive testing. This business area is extremely attractive and high-margin, especially considering possible synergies in further develop- ment. ATC’s research and production sites are located at head quarters in Indianapolis. Additionally, the com- pany has sales and service branches in China, India, Mexico and Europe. Dreebit With the takeover of the vacuum service provider Dreebit, headquartered in Dresden, Germany, Pfeiffer Vacuum is putting emphasis on the growing area of service. Today, service already constitutes around 19 percent of the Company’s total sales and is an increasingly important sales argument for the cus- tomers of Pfeiffer Vacuum. Dreebit GmbH was estab- lished in 2006 in Dresden with the goal of introduc- ing its own technology for the generation of highly charged ions onto the market. This technology is reﬂected in the company’s name: Dreebit stands for Dresden EBIT (EBIT= electron beam ion trap). Steadily, further areas of business, such as vacuum

22 I N T E R N A T I O N A L G R O W T H Dr. Frank Großmann is a founding member and Managing Director of Dreebit GmbH in Dresden, Germany. He has been operating the company since 2006. »Through the merger with Pfeiffer Vacuum, Dreebit proﬁts from the global distribution network, an expansion of its service portfolio with new products, as well as the Company’s existing structures. On the other side, Pfeiffer Vacuum will be enriched by Dreebit’s innovative strength and ﬂexible approach to customer-speciﬁc requirements in the service and project busi-ness. From the very beginning, good cooperation with Pfeiffer Vacuum has been decisive for our mutual success. From the minority holding that was entered into in 2010 to the complete takeover of Dreebit in early 2017, both companies have grown closer and closer together. On an operational level, our service technicians also work closely with their collea gues at the parent companies.Dr. Frank Großmann, Managing Director, Dreebit GmbHINTERNATIONAL GROWTHNEW MEMBERS OF THE PFEIFFER VACUUM TEAM

Pfeiffer Vacuum Technology AG – Annual Report 2017 23 Interview with Thomas Deany, President and Managing Director of Nor-Cal In June 2017, Nor-Cal became a member of the Pfeiffer Vacuum Group. What beneﬁts do you expect from this merger?There are many beneﬁts. Strategically, Pfeiffer Vacuum’s large sales team, consisting of over 200 employees, will promote our high-quality products globally throughout its extensive network. This ope-ning up of new markets will have a direct positive effect on our sales and our position as a company. Nor-Cal is globally positioned, but the presence of Pfeiffer Vacuum is considerably broader, goes back more than 125 years, and commands much respect by association. This promotion of Nor-Cal compo-nents and services will be a boost to both our top line and our reputation.What is the main area of business of Nor-Cal?We serve the vacuum industry and science as a premier source for custom and standard vacuum components for containment and control in vacuum processes and applications. Containment is covered by the highly-conﬁgured custom chambers that work in a pressure regime of anything from 1 Torr to 5 x 10-11. We are known for our custom design capabilities, and for our expertise in manufacturing. Control is covered by our pressure control valves, as well as connectors, ﬂanges, ﬁttings, and all the components required for a complete vacuum system.What distinguishes the Nor-Cal team and what makes it an enrichment for Pfeiffer Vacuum?That’s easy – our employees are our greatest asset. Nor-Cal is a world-class company in the area of vacuum technology. World-class companies are not created from fancy buildings or equipment, they are created by world-class people. From our machinists and welders to our ﬁnance and logistics teams – we have world-class employees. They are self-motivated to meet and exceed the commitments that we make daily to our customers. Whether it’s a tight delivery deadline, or a manufacturing challenge, it is the people at Nor-Cal that bring it together.What experiences have you had up to now in cooperation between Pfeiffer Vacuum and Nor-Cal?From the very ﬁrst discussions in which the manage-ment of Pfeiffer Vacuum revealed their great interest in Nor-Cal Products, my experiences have been fan-tastic. As the managers stated their intention to pur-chase the building to show the employees and the corporation its long-term commitment, I was thrilled. They are as excited to be a part of our family as we are excited to be a part of theirs. As I said, the cul-ture at Pfeiffer Vacuum blends with Nor-Cal’s culture well. They, like Nor-Cal, place great importance on their people. This is an integral part of their business plan and culture. Based on my impressions, challen-ges are approached with a high level of professio-nalism, enthusiasm, collaboration, and cooperation.This is inspiring and speaks to great future oppor-tunities for growth.

24 I N T E R N A T I O N A L G R O W T H Thomas Deany is the President and Managing Director of Nor-Cal and is responsible for 335 employees worldwide. The semiconductor market is highly important for Nor-Cal. What are the most important drivers of growth in this sector?We all know that artiﬁcial intelligence will play a big role in our lives. For everything – from smart devices around the house to autonomous cars, from facial recognition to the “internet of things,” … – more semiconductor memory and chips are required than ever before for displays, storage, and new sensor- supported technology. This will drive the business short term and well into the future. The companies that utilize these technologies in manufacturing and research applications are already our customers. There is a ﬂuctuation point between hard drives and ﬂash drives now that has ﬁnally come to fruition, and we are lucky enough to be speciﬁed on these plat-forms. Being a strategic partner for these manufac-turers means that as they grow, we grow too. Please describe the prospects for future growth and entrepreneurial potential connected with the merger of business activities with Pfeiffer Vacuum in the next few years!The prospects for growth seem almost unlimited when you put two companies like Pfeiffer Vacuum and Nor-Cal together. Pfeiffer Vacuum is certainly integrated into the biggest industrial companies in the world and can introduce Nor-Cal products to them. Nor-Cal can introduce Pfeiffer Vacuum to our customer base which is stronger in America and has a more robust R&D base. The semiconductor industry is thriving. Our customers are challenged by the growing demand and the ever-expanding applications and processes in which their tools are instrumental. It is our job to support their needs by coming up with enabling technology that allows them to continue their good work and to meet their delivery schedules. We believe that we can pull Pfeiffer Vacuum products into our customers’ appli-cations. We have chambers for containment. We have valves for control. And now, with Pfeiffer Vacuum, we have the ability to pump these systems, sur-rounding the tools with our components. Vacuum is needed for everything. Like Pfeiffer Vacuum says: “Vacuum for life.”

Pfeiffer Vacuum Technology AG – Annual Report 2017 25 » Our patented, market-tested and proven leak detection methods with air optimally complement the methods that use helium as a test gas, which Pfeiffer Vacuum also offers. No other company in the leak de- tection market offers users as many different technologies as we do. In many of the main application areas of ATC – especially in the pharmaceutical and medical technology indus- tries – Pfeiffer Vacuum has not been strong up to now. This merger makes new solutions Hemi Sagi is the founder and Managing Director of ATC. The company holds several US-American and international patents in the areas of leak detection and ﬂow measure- ment technology. and potential product applications possible. ATC offers one of the most established technologies for shelf life and quality assurance of pharmaceuticals – and we are work ing to posi- tion Pfeiffer Vacuum’s products on the market. Pfeiffer Vacuum could become the largest and leading com- pany on the leak detection market. According to my personal estimation, this holds sales potential in the amount of many billion US dollars for instruments, leak detection systems, sniffer probes, and service. We expect that the sales of ATC products alone will double in the next four to ﬁve years. Hemi Sagi, Managing Director of ATC

NOR-CAL The company was founded in 1962 in Yreka, California. It took its ﬁrst steps into the vacuum sector, which was then just emerging, as a supplier of flanges, ﬁt- tings, and customer-speciﬁc components. 26 I N T E R N A T I O N A L G R O W T H Nor-Cal _ Experts from diffe- rent areas design and produce cus tomer- speciﬁc vacuum parts and components. With the acquisition of ATC, Nor-Cal, and Dreebit, the existing product portfolio of Pfeiffer Vacuum has not only been expanded – the global team has also grown signiﬁcantly. More than 400 employees strengthen the Company. Take a look behind the scenes of the new corporate members and get to know the diffe-rent products and their areas of expertise!Nor-Cal: Specialists for Parts and ComponentsVacuum components, chambers, and valves are Nor-Cal’s areas of expertise. Worldwide, around 300 em ploy ees work for the Company’s customers, mainly from research and the semiconductor indus-try. The product portfolio of Nor-Cal encompasses approximately 6,000 standard products for all possi-ble vacuum applications. Added to these are a mul-titude of cus tomer-speciﬁc productions of chambers, systems, and component parts. A team of experts from different areas with broad qualiﬁcations designs these solutions in exact accordance with customer speciﬁcations – or deve lops them together with the customer. INTERNATIONAL GROWTHDAILY WORK WORLDWIDE

Pfeiffer Vacuum Technology AG – Annual Report 2017 27 ATC For more than 30 years, ATC has been a supplier of inspection and testing equipment. The company de- veloped the patented Micro-Flow technology, which conducts leak detection using air. ATC _ develops inspection and testing equipment for leak testing at the highest level of quality. The Nor-Cal team of engineers designs ﬁtting solu-tions based on customer requirements. All data and information are ﬁrst checked for feasibility and, where necessary, optimized in close cooperation with the customer before the start of the production process. Customers who are not capable of giving their own technical input are supported by the engineers, who also create the necessary data ﬁles. Energy efﬁciency and operating costs are already taken into account during design and construction.Innovative strength is at home in Nor-Cal’s research and development team. There, the experts develop new product prototypes and conduct pressure, con-ductivity, and thermal analyses. In addition, they test developed software and electronics.The technicians at Nor-Cal have well-founded know-ledge in the production of different kinds of vacuum components such as T-frames, valves, and pump ca-sings or special outlet components. Their expertise in welding, especially, allows them to create very individual, customer-speciﬁc products. Before dis-patch, the technicians conduct thorough quality tes-ting of every custom-produced product.ATC: Innovation through patented leak testing systemsIt is the company philosophy of ATC to offer the customer high-quality, innovative, and cost-efﬁcient inspection and testing equipment for leak testing. The employees are in service every day to produce the high-quality products that ATC stands for. Just like at Pfeiffer Vacuum, the aspiration for quality and proximity to the customer doesn’t just begin at pro-duction. In the conception phase, the experts give it all they have got in order to create optimal leak detec-tion solutions for the customer. The team of engi neers at ATC has well-founded knowledge in different areas such as in mechanics, electrics, software, industry, metrology, or test design. Ideal synergies are formed and customers can rely on strong expertise.

28 I N T E R N A T I O N A L G R O W T H DREEBIT Dreebit was established in 2006 with the vision of tapping into the market of sources for the production of highly charged ions. Only one year later, vacuum service was established as a further area of business. With the adoption of a new quality management system and certiﬁcation in accordance with ISO 9001 in 2008, the foundation was laid for lasting growth that continues today. All valid industry regulations, such as those on safety, quality, and environmental protection, are taken into account when designing new products.The laboratories in which ATC testing and product development take place are accredited by interna-tional inspection committees. Here, the experts at ATC perform calibration as well as various tests, for example, with dangerous or explosive gases. For cus-tomers who do not have exact knowledge of the leak- tightness requirements of their applications, the technicians at ATC conduct tests of the desired ap-plication in order to determine the appropriate test method for the individual customer.All products are fabricated in-house at ATC. The ex-perts, all from different specialist ﬁelds, work closely together and provide support for customer projects from start to ﬁnish. Furthermore, at ATC, there are special system construction teams that are specia-lized in assembly and installation as well as the tes-ting of leak detection and ﬂow systems.ATC offers aftersales service for all products at the highest level of quality. For this purpose, experien-ced service teams of experts from different ﬁelds are available. They perform annual calibration and maintenance work and, for all other problems, will make sure the equipment is operating again as fast as possible.Dreebit: Growth in ServiceDreebit’s expertise is concentrated in two areas. The largest and most important is its main business area of vacuum service. Experienced service technicians and vacuum experts cover a wide range of tasks. They repair and service vacuum pumps, components, systems, and measurement technology. Moreover, they conduct decontamination according to the latest safety standards. The day-to-day work of Dreebit’s approx. 50 employees also includes monitoring of vacuum systems and the implementation of custo-mer-speciﬁc solutions according to the seminal con-cept of Service 4.0. The Dresden team is young and very interdisciplinary and can thus respond to com-plex, customer-speciﬁc inquiries with the relevant expertise in a targeted way. This is a huge advantage, especially in the area of digitalization, which is be-coming increasingly important in vacuum service.The second ﬁeld of activity at Dreebit also requires employee precision and expertise: products and spe-cial, customer-speciﬁc systems in the areas of plasma and ion beam technology. Customers proﬁt from the Dreebit team’s mix of experienced industry professio-nals and young, innovative trendsetters. They develop ion sources for the production of highly charged ions, construct special, customer-speciﬁc (ultra) high vacuum systems and possess expertise collected over years and proven in the ﬁeld.

30 W O R L D W I D E C O O P E R A T I O N Pfeiffer Vacuum products are in use all over the world. In order to provide our customers with sup- port directly on site and, over the entire product life cycle, Pfeiffer Vacuum is represented in more than 60 countries worldwide with subsidiaries, sales partners, and service centers. 2,945 employees work for Pfeiffer Vacuum. To offer our customers the same high quality when it comes to our prod- ucts and service, identical standards apply at all locations. This high level of service can only be ensured if the international subsidiaries work closely together. Common development processes, standardized, international training, a global learning platform as well as a worldwide continous improvement pro- gram in all business areas guarantee transfer of technology and knowledge. WORLDWIDE COOPERATION

Pfeiffer Vacuum Technology AG – Annual Report 2017 31 PRODUCTION Our portfolio comprises of 20,000 different products. They are manufactured in 8 production locations worldwide. The same high standards of quality, reliability, and excellence apply to our products at every location. SERVICE Our 25 service centers and 40 service part- ners worldwide work according to a global, product-speciﬁc concept. In this way, the same high quality of our services can be provided anywhere in the world. TECHNOLOGY TRANSFER Cooperation among experts from different locations on large-scale international projects, new joint product development and the targe- ted concentration and combination of interna- tionally available core competences ensure the worldwide transfer of technology. KNOW-HOW Internationalized, web-based training as well as speciﬁc continuing education programs at dif- ferent branch ofﬁces ensure the same, con sis tent employee expertise worldwide. Through daily global cooperation with international collea gues and business partners, employees of Pfeiffer Vacuum have strong intercultural competence.

32 W O R L D W I D E C O O P E R A T I O N WORLDWIDE COLLABORATION STRONG AND UNITED INTO THE FUTURE. North and South America The entire region is overseen by Pfeiffer Vacuum USA. The United States is an enormously im- portant location for the Company. The American subsidiary generated sales of 142.1 million euros in the last year. The American headquarters of Pfeiffer Vacuum is located in Nashua, New Hamp- shire. Additionally, the Company is represented in San José, California, and there is a service center in Austin, Texas. Furthermore, the headquarters of two of the three new members of the Corpo- ration, Nor-Cal and ATC, are located in the United States. Many of our South American customers are supervised directly from the American head- quarters in Nashua. Moreover, in many countries, there are sales representatives and distributors available for the customers: in Chile, Venezuela, Brazil, or Para- guay, for example. The Rest of the World Pfeiffer Vacuum is also represented by sales bran- ches and distributors in the other countries of the world. These include, for example, South Africa, Australia, Canada, or Thailand. In this way, we en- sure our customers local assistance and direct communication.

Pfeiffer Vacuum Technology AG – Annual Report 2017 33 Europe The most signiﬁcant technological driving forces of the Company are at home in Europe: its two biggest locations in Asslar and Annecy. The largest share of sales is obtained in this region – 225.5 million euros in 2017. Pfeiffer Vacuum is represen- ted in Europe with nine subsidiaries that serve customers in all European countries. Moreover, there are numerous local sales representatives and distributors. Asia After Europe, Asia is the region with the second - largest share of sales in the Company. In 2017, turnovers of 220,3 million euros were generated. The most important semiconductor customers of Pfeiffer Vacuum are based here, making the re- gion the most promising market of the Company. Pfeiffer Vacuum has six subsidiaries in Asia in addition to further sales branches and distributors.

34 S T R O N G R O O T S STRONG ROOTS LOCATIONS IN GERMANY AND FRANCE With a lathe and 300 Goldmark, Arthur Pfeiffer, then a 23-year-old precision mechanic, founded his own workshop in the year 1890. It was located in the attic of a house in the Central Hessian town of Wetzlar. There, the young company founder discovered light- ing technology as a ﬁeld for his own specialization. The invention of the electric light bulb marked the birth of vacuum technology for Pfeiffer Vacuum: Arthur Pfeiffer recognized the importance of the evacuation of light bulbs and developed special vacuum pumps that revolutionized the production process of light bulb manufacturers. Further branches of industry also became aware of the new technology, and the international success of the Company was unstoppable. In 1900, Arthur Pfeiffer and his Company relocated to a larger buil- ding in the city center of Wetzlar. A few years later, a new construction with larger manufacturing halls was necessary. In 1926, the company already had numerous general agencies worldwide, particularly in Europe and the United States. Their number and relevance grew from year to year. In 1965, the move to larger business premises in the neighboring town of Asslar began, now under leadership of the founder’s son. The main head- quarters of Pfeiffer Vacuum Technology AG is still located there today. Despite its ever-increasing international activity, Pfeiffer Vacuum has always remained true to its home in Central Hesse. The Company is tightly connected to the region and fosters close friendships with partner companies, clubs and associations in the neighborhood. Arthur Pfeiffer founded the Company in Wetzlar. Through lighting technology, he quickly found his way into vacuum technology. With the invention of the turbopump in 1958, Pfeiffer Vacuum revolutionized the industry. It is still one of the most important achievements of vacuum technology today.

Pfeiffer Vacuum Technology AG – Annual Report 2017 37 Pfeiffer Vacuum’s high-perfor- mance helium leak detectors, among others, are produced in Annecy. The ﬁrst helium leak detector was manufactured in 1966. In 2017, 1,946 leak detectors were produced in Annecy. Parallel to the ever-growing success of Pfeiffer Vacuum, a second company established itself in the ﬁeld of vacuum technology in France: the Société Alsacienne de Constructions Mécaniques, founded in Graffenstaden, Alsace, in 1872. In its early years, the Company was a producer of arma- ments. In 1951, it chose Annecy in the region of Auvergne-Rhône-Alpes as manufacturing base for its submarine torpedos. When the French navy decided to relocate its entire torpedo production, other ﬁelds of activity needed to be found. The factory used the existing technical potential of its workers in precision mechanics and high-quality electronics for the development of vacuum pumps for the nuclear industry. Soon, vacuum pumps manu- factured in Annecy were employed in all high-tech sectors. Strengthened by these ﬁrst successes in France, a subsidiary was then opened in Germany. In 1969, the purchase of the then-leading French supplier of low vacuum pumps followed. In the subsequent decades, the Company grew steadily by means of numerous acquisitions and ex- panded its worldwide presence further and further. It established itself especially strongly in the semi- conductor industry in Asia as well as in several other industrial branches with its expertise in helium leak detection. In 2010, Pfeiffer Vacuum took over the company “adixen,” the vacuum technology business unit of Alcatel-Lucent at the time. This merger created valuable synergies for both sides. The entire Corporate Group is operated from the locations in Asslar and Annecy. Close cooperation among all of the departments creates important im- pulses for technology and international growth. Both locations form the central roots of the Company. Pfeiffer Vacuum is closely linked with the regions around its two largest company locations. The Annecy location is the headquarters of the Semicon- ductor & Coating Business Unit of Pfeiffer Vacuum.

Pfeiffer Vacuum Technology AG – Annual Report 2017 3939 SCIENTIFIC FUNDINGFor a high-technology company like Pfeiffer Vacuum, the advancement of the next scientiﬁc generation is indispensable. For this reason, the Company, together with partners from science and industry, awards annual prizes for signiﬁcant research achievements in physics. These include, for example, the FAIR - GSI Doctorate Award or the Röntgen Prize of the Justus Liebig University Gießen.SOCIAL RESPONSIBILITYPfeiffer Vacuum takes its social responsibility, also outside of the Company, very seriously, supporting the work of disabled persons’ and children’s aid or-ganizations, local associations, clubs, and schools.

40 S T R O N G R O O T S STRONG ROOTS CORPORATE GAMES IN ANNECY Every July, the Corporate Games – an international company sporting event in which teams from many diverse companies compete in different events – take place in Annecy. Many Pfeiffer Vacuum employees travel from Germany to France every year to partici-pate in the athletic competitions in mixed teams with their colleagues from Annecy. At the Corporate Games, team spirit comes ﬁrst and foremost. While competing together during the sporting events, while cheering on the different teams or at the concluding Corporate Games celebration, the French and German colleagues are brought closer together. The Corporate Games in Annecy promote team spirit and cooperation between the locations in Germany and France.

More than 50 % of all company employees work at the Asslar and Annecy locations. 38,420 ––– TURBO PUMPS WERE MANUFACTURED AT THE PRODUCTION SITE IN ASSLAR IN 2017. Pfeiffer Vacuum Technology AG – Annual Report 2017 Pfeiffer Vacuum Technology AG – Annual Report 2017 43 60 % ––– The eco-friendly industrial cleaning plant at our Annecy location uses 60% less water in comparison to other cle- aning systems. It is part of the Green Lab Fab concept for the improvement of efﬁciency and saving of resources within the production cycle at Pfeiffer Vacuum in France. ISO The quality and environmental management systems of Pfeiffer Vacuum’s two largest locations have been ISO-certiﬁed for many years. Additionally, the energy management of the Asslar loca- tion is ISO-certiﬁed.

44 V A C U U M S O L U T I O N S A VACUUM SOLUTION IS CREATED BY COMBINING OUR STRENGTHS What is the perfect vacuum solution? Our customers’ needs are as diverse as our product portfolio. The complex demands on vacuum signiﬁcantly differ from case to case. For some clients, it is important to continuously maintain a certain pressure. For others, it is important to evacuate a vacuum chamber particularly quickly Up to 5,000 backing pumps and 1,000 turbo pumps are required to manufacture some 100,000 wafers per month in a modern semiconductor factory. In contrast, a research laboratory may be sufﬁciently equipped with a single backing pump. Other appli- cations involve quality assurance in manufacturing processes, where the purpose is often to test the tightness of vessels and components or to analyze the composition of process gases. With every vacuum solution we design, our objective is to focus on delivering products of the highest quality which meet our customers’ speciﬁc require- ments. From the development stage right through to commissioning, our solutions for evacuating, measuring, and analyzing vacuum stand for tech- nological excellence matched with the highest standards of quality. Consultation and service are not forgotten. Our qualiﬁed employees are always on hand to provide reliable support for our customers with science-based expertise and many years of experience. Key factors for compiling a vacuum solution: ¡ Number and types of gases in one container ¡ Pressure and ﬂow velocity ¡ Intended ﬁnal pressure and base pressure ¡ Pumping speed and throughput Application examples for vacuum solutions: ¡ Analysis technology ¡ Chemical industry ¡ Coating of glasses, architectural glass, tools, ﬂat screens, Blu-ray discs ¡ Drying processes ¡ Food and beverage industry ¡ Leak detection for the automotive industry ¡ Manufacturing solar cells ¡ Paper manufacturing ¡ Pharmaceutical industry ¡ Semiconductor production ¡ Solar thermal plants ¡ Space simulation ¡ Steel degassing

Pfeiffer Vacuum Technology AG – Annual Report 2017 45 VACUUM CHAMBERS Depending on process conditions Low, medium, and high vacuum chambers in individual shapes and sizes BACKING PUMPS Low and medium vacuum Rotary vane, diaphragm, Roots, side channel, screw and piston pumps in addition to pumping stations MEASUREMENT AND ANALYSIS EQUIPMENT For all pressure ranges Leak detectors, gas analyzers, gauges, and mass spectrometers TURBO PUMPS High and ultra-high vacuum Magnetic and hybrid bearing turbo pumps and turbo pumping stations ELEMENTS OF VACUUM - SOLUTIONS COMPONENTS Valves and components Gaskets, ﬁlters, valves, ﬂanges, electrical feedthroughs, manipulators, bellows components, and other accessories SYSTEMS SERVICE Individual technologies Multi-stage vacuum systems, special pumping stations, calibration and decontamination systems Flexible service module Technical training and seminars, on-site service, comprehensive service contracts, regional service centers, replacement products, and original replacement parts CONSULTATION Absolute customer orientation Needs assessment, design, and calculation of vacuum systems as well as product consultation

46 P R O D U C T P O R T F O L I O PRODUCT PORTFOLIO Manufacturing many high-tech products and items for daily life is only possible in special vacuum chambers under pressure conditions comparable to those in outer space. We cover the full spectrum with our product range and are therefore able to offer the perfect vacuum solution from one source for each customer and for each application. The Pfeiffer Vacuum product port- folio is divided into the areas of vacuum generation, leak detection, vacuum measurement and analysis, installation elements, vacuum chambers, and vacuum systems. It includes a complete range of hybrid and magnetically levitated turbopumps, oil-lubricated and dry- compressing low and medium vacuum pumps, leak detectors, mass spectrometers, and gauge heads. We manufacture vacuum chambers in cubical, cylindrical, and bell-shaped designs. Our chamber program covers low, medium, and high vacuum applications. In order to connect the different vacuum components with each other or to shut them off, we offer a wide range of installation elements such as ﬂanges, ﬁttings, seals, and valves. In addition, Pfeiffer Vacuum develops and manu- factures complete vacuum systems for customer speciﬁc processes, such as testing components for the automotive and electronics industries, testing pressure vessels or packaging in the food industry. This range includes systems for leak detection and contamination management as well as multi-stage vacuum systems and systems for testing pharma- ceutical blister packs.

Pfeiffer Vacuum Technology AG – Annual Report 2017 47 VACUUM GENERATION – TURBO PUMPS VACUUM GENERATION – BACKING PUMPS LEAK DETECTION, VACUUM MEASURE- MENT AND ANALYSIS Hybrid bearing turbo pumps Magnetically levi- tated turbo pumps Rotary vane pumps Multi-stage Roots pumps Leak detectors Mass spectrometers Turbo pumping stations SplitFlow turbo pumps Dry process pumps Roots pumping stations Gauge heads Gas analysis equipment INSTALLATION ELEMENTS VACUUM CHAMBERS VACUUM SYSTEMS Feedthroughs Valves Cylindrical, horizontal, and vertical Integrity testing Components Manipulators Cubical Modular Contamination management solutions Multi-stage vacuum systems

48 S H A R E P E R F O R M A N C E SHARE PERFORMANCE The Pfeiffer Vacuum shares were listed on the New York Stock Exchange in 1996, initially in the form of an ADR program, and have been traded on the German Stock Exchange in Frankfurt since April 15, 1998. The ADR program was discontinued in 2007 in order to concentrate the focus on the German listing. Pfeiffer Vacuum satisﬁes the high transparency requirements of the Prime Standard and since its introduction has been included without interruption in the TecDAX – the index of the 30 most prominent technology companies measured by free-ﬂoat market capitalization and liquidity – traded on the stock ex- change in Frankfurt. All trading prices indicated in this Annual Report are Xetra trading prices. of the euro against the US dollar to a two-year high had only a short-term impact on the markets. Similar- ly, the ﬁrst prime rate hike in the UK in more than ten years and the risk of a hard Brexit only impacted share prices temporarily. Overall, European stock markets notched up only below-average performance due to the strong euro. Overall, the DAX rose by 12.5 % and closed 1,436.58 points above the 2016 year-end level. In October, the German leading share index rose above the 13,000 mark for the ﬁrst time since its inception and set new records in the months that followed. The MDAX recorded an increase of 18.1 %, while the TecDAX rose by 39.6 % and closed at 2,529.04 index points on December 30, 2017. Pfeiffer Vacuum share performance in 2017 Over the year, the Pfeiffer Vacuum share price devel- oped far more favorably than the DAX and TecDAX with an increase of 75.5 %. Including the annual dividend distribution, the Pfeiffer Vacuum share recorded an appreciation in value of 80.95 %. Over the same period, the TecDAX increased by 39.59 % and the DAX by 12.5 %. The Pfeiffer Vacuum share recorded an annual low of € 87.80 on January 9, 2018. The annual high of € 174.50 was reached on Novem- ber 24, 2017. At year end, the share closed during trading at a price of € 156.15. In 2017, the trading volume was an average of 31,713 shares per day (2016: 29,891 shares per day). BASIC INFORMATION ABOUT PFEIFFER VACUUM SHARES Stock exchange segment Prime Standard Index TecDAX Deutsche Börse Symbol PFV ISIN Bloomberg Symbol Reuters Symbol Further indices DE0006916604 PFV.GY PV.DE HDAX, Mid Cap Market, CDAX, Prime Industrial, Prime All Share, Technology All Share The stock market in 2017 2017 was a particularly strong year in terms of stock market performance. The positive development of the U.S. economy, underpinned by a comprehensive tax reform in the second half-year, was reﬂected in the strong quarterly performance of the U.S. tech- nology sector. Fervent Bitcoin phantasies and M&A activity supported this, as did the ECB’s decision to continue its bond purchases in 2018. The appreciation

Pfeiffer Vacuum Technology AG – Annual Report 2017 49 RELATIVE SHARE PRICE DEVELOPMENT OF PFEIFFER VACUUM, TECDAX AND DAX IN 2017 in % 200 190 180 170 160 150 140 130 120 110 100 90 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Dec. 30, 2016 (=100) Closing Price: € 88.82 Dec. 29, 2017 Closing Price: € 156.51 Pfeiffer Vacuum TecDAX DAX RELATIVE SHARE PRICE DEVELOPMENT OF PFEIFFER VACUUM, TECDAX AND DAX BETWEEN 2003 AND 2017 in % 1.000 900 800 700 600 500 400 300 200 100 Mar. 2003 Jan. 2004 Jan. 2005 Jan. 2006 Jan. 2007 Jan. 2008 Jan. 2009 Jan. 2010 Jan. 2011 Jan. 2012 Jan. 2013 Jan. 2014 Jan. 2015 Jan. 2016 Jan. 2017 Mar. 24, 2003 (= 100) Closing Price: € 17.00 Dec. 29, 2016 Closing Price: € 156.51 Pfeiffer Vacuum TecDAX DAX

50 S H A R E P E R F O R M A N C E Shareholder structure Earnings per share As in the previous year, Pfeiffer Vacuum Technolo- gy AG recorded ﬁve investors with a shareholding of three percent or more in the 2017 ﬁscal year. According to its own statement, Pangea GmbH held an equity share of 38.96 % as of December 30, 2017. Allianz Global Investors GmbH, as the second largest shareholder, ended the year with a shareholding of 4.99 %. The Japanese industrial company Hakuto GmbH, whom Pfeiffer Vacuum has worked with at an operational level for decades, holds 3.48 % of the share capital. The state of Nor- way held an equity share in Pfeiffer Vacuum of 3.36 %. Universal Investment GmbH recorded a shareholding of 2.93 % at year end. Based on voting rights notiﬁcations, talks with investors and share- holder analyses, Pfeiffer Vacuum shareholders are distributed geographically in Germany (55 %), Europe without Germany (25 %), America (15 %) and Asia (5 %). The structure of investors is widely diversiﬁed. Shares in Pfeiffer Vacuum are held by investment funds, sovereign wealth funds, pension funds, banks, insurance companies, investment companies, wealth managers, family ofﬁces and private shareholders. ESTIMATED REGIONAL DISTRIBUTION OF THE PFEIFFER VACUUM SHAREHOLDER STRUCTURE in % Pfeiffer Vacuum’s annual earnings of € 53.8 million represented an increase of 14.5 % over the previous year’s ﬁgure of € 47.0 million. The earnings per share amounted to € 5.46. Based on the year-end closing price of € 156.15, this results in a price/earnings ratio of 28.6 % (December 30, 2016: 18.6 %). EARNINGS PER SHARE Net income Number of shares (weighted average) Earnings per share Dividend 2017 in K € 53,848 in units in € 9,867,659 5.46 The Management and Supervisory Boards will pro- pose to the Annual General Meeting on May 23, 2018 that a dividend be distributed for ﬁscal 2017 in the amount of € 2.00 per share of no-par stock entitled to receive dividends. This represents a dividend ratio of around 37.0 % and a total payout amount of € 19.7 million. Subject to the consent of the Annual General Meeting, and on the basis of the year-end closing price of € 156.15 on December 30, 2017, this represents a dividend yield of 1.3 % (previous year: 4.1 %). 25 Europe without Germany DIVIDEND DEVELOPMENT PER SHARE FOR THE LAST 10 FINANCIAL YEARS in € 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1 Subject to approval at the Annual General Meeting 3.35 2.45 2.90 3.15 3.45 2.65 2.65 3.20 3.60 2.00 1 55 Germany 5 Asia 15 USA OVERVIEW OF HOLDINGS ACCORDING TO VOTING RIGHTS NOTIFICATION in % Dec. 31, 2017 Pangea GmbH, Maulburg Allianz Global Investors, Frankfurt Hakuto, Tokyo The state of Norway 38.96 4.99 3.48 3.36

Pfeiffer Vacuum Technology AG – Annual Report 2017 51 Investor Relations Consistently competent, professional, and reliable communication on all ﬁnancial and corporate matters has always been of utmost importance to us in our dealings with our investors, private investors, and analysts. This is a contributing factor for ensuring that Pfeiffer Vacuum continues to be regarded as an attractive investment. With this, we would like to strengthen the conﬁdence in our share and obtain a realistic and fair assessment. At several roadshows in all major ﬁnancial centers in both Europe and the United States, the members of the Management Board presented our business model, explained our Company’s strategy, and answered questions. Moreover, we showcased our Company at many investor conferences. We also frequently conducted these conferences with two people in parallel one-on-one meetings to meet the high interest in personal interaction. Further activities included tradeshow visits and regular interaction with private shareholders. Numerous institutional inves- tors and analysts from around the world paid frequent visits to our corporate headquarters. A press and analyst conference on our ﬁnancial ﬁgures, four con- ference calls relating to announcements of our ﬁnancial results, as well as ongoing exchanges with analysts, institutional investors, and private share- holders have characterized the work of investor relations. More than 13 analysts regularly follow our Company. At year´s end, there were ﬁve “Buy” recommendations, six “Hold” recommendations and three “Sell” recommendations at year-end 2017. Last year’s Annual General Meeting was attended by around 650 shareholders and guests. Shareholder presence was 67.40 % compared with 61.33 % the year before. Motions to approve and discharge the Management Board and Supervisory Board were put to the vote individually. One member of the Super- visory Board was not discharged, while all other items on the agenda were approved by a majority. Ahead of the AGM, the shareholders were able to download all relevant documents, as well as the ballot sheet, from the broad information offerings on the Internet at group.pfeiffer-vacuum.com/agm PFEIFFER VACUUM SHARE DATA Share capital in € millions 2017 25.3 2016 25.3 2015 25.3 2014 25.3 2013 25.3 Number of shares issued in units 9,867,659 9,867,659 9,867,659 9,867,659 9,867,659 Highest trading price Lowest trading price Trading price at year-end Market capitalization at year-end Dividend per share Dividend yield Earnings per share Price/earnings ratio Free ﬂoat in € in € in € 174.50 87.80 156.15 in € millions 1,540.84 in € in % in € in % 2.001 1.31 5.46 28.6 61.04 103.45 75.28 88.82 876 3.60 4.1 4.77 18.6 115.60 65.69 93.55 923 3.20 3.4 4.25 22.0 102.05 56.21 68.60 677 2.65 3.9 3.29 20.9 99.55 76.50 98.93 976 2.65 2.7 3.53 28.1 72.81 72.81 100.0 100.0 1 Subject to consent of the Annual General Meeting

52 F I N A N C I A L R E P O R T I N G 2 0 1 7 | M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Detailed Index | 2017 Course of Business FINANCIAL REPORTING 2017 53 MANAGEMENT’S DISCUSSION AND ANALYSIS 90 CONSOLIDATED FINANCIAL STATEMENTS 53 2017 Course of Business 90 Consolidated Statements of Income 91 Consolidated Statements of Comprehensive Income 92 Consolidated Balance Sheets 93 Consolidated Statements of Shareholders’ Equity 94 Consolidated Statements of Cash Flows 95 Notes to the Consolidated Financial Statements 55 Economic Conditions 2017 56 The Pfeiffer Vacuum Group 61 Proﬁtability, Financial Position, and Liquidity 71 Non-ﬁnancial Performance Indicators 74 Corporate Governance Report and Declaration on the Corporate Governance 80 Risk and Opportunities Report 87 Subsequent Events 87 Outlook

Pfeiffer Vacuum Technology AG – Annual Report 2017 53 MANAGEMENT’S DISCUSSION AND ANALYSIS 2017 Course of Business Proﬁtability ¡ Net sales rose very noticeably by € 112.8 million or 23.8 % to € 587.0 million ¡ Organic growth and acquisitions as key revenue drivers ¡ Operating proﬁt reached a record level with € 71.4 million, but special and one-time effects burdened the margin development ¡ Net income and earnings per share at the highest level in the Company´s history: € 53.8 million, resulting in earnings per share at € 5.46 ¡ Sales forecast therefore exceeded, earnings fore- cast fulﬁlled, margin forecast only partially achieved The development of sales in the past ﬁscal year 2017 was signiﬁcantly inﬂuenced by two factors. The continued high level of momentum, particularly in the semiconductor market, led to strong organic growth. Further positive impulses came from the coating industry. In addition, the Group’s net sales also grew due to acquisitions. At the beginning of the year, another 75.1 % of the shares in Dreebit GmbH, Dresden, Germany (Dreebit) and all shares in Ad- vanced Test Concepts LLC., Indianapolis, USA (ATC), were acquired. In addition, in June 2017, Pfeiffer Vacuum acquired Nor-Cal Products Holdings, Inc., Yreka, USA, and its subsidiaries (together Nor-Cal). After € 474.2 million in the previous year, sales in the past ﬁscal year thus amounted to € 587.0 million. This corresponds to an increase of €112.8 million or 23.8 %. As a result, the noticeable increase in sales, formulated as a goal in last year’s outlook with- out taking into account the acquisition of Nor-Cal, was also achieved even without the inclusion of the con- tributions concerning this matter. The substantiation of this forecast at the last Annual General Meeting after the Nor-Cal acquisition with an expected sales volume of € 520 – 540 million and also the updated forecast of overall sales of € 550 – 570 million was, in fact, slightly exceeded due to the constant demand dynamics in the semiconductor industry. The gross proﬁt and operating proﬁt were also inﬂu- enced by the organic growth and the acquisitions and were well above the previous year’s ﬁgures. Thus, the gross proﬁt increased by € 29.5 million from € 180.5 million to € 210.0 million and the operating proﬁt at € 71.4 million is € 3.4 million above the pre- vious year’s ﬁgure (€ 68.0 million). Therefore, the forecast noticeable improvement in the operating proﬁt was achieved in 2017. In contrast, the gross margin and the operating proﬁt margin showed a year-on-year decline compared to the previous year: 35.8 % and 12.2 % after 38.1 % and 14.3 % in 2016. The decline in the margin development was partly due to the change in the customer mix, i.e., the in- crease in revenue with customers in low-margin markets. However, it must also be considered that the proﬁtability was inﬂuenced by the effects of the subsequent valuation of the purchase price alloca- tion. The purchase price allocation (in short: PPA) is the process whereby the assets and liabilities ac- quired as part of an acquisition are recorded at fair value as of the acquisition date. International Finan- cial Reporting Standards (IFRS) require that this PPA is completed no later than in the ﬁrst twelve months following the acquisition. Following the preliminary preparation of the interim reporting in 2017 using the carrying amounts of the net assets acquired, the fair values of the acquired net assets were determined retroactively as part of the PPA at the relevant effec- tive dates of the acquisitions and were recorded at these effective dates in the adjusted opening balance sheet. Signiﬁcant parts of the PPA adjustments as of the acquisition date related to intangible assets. Here, the previous ly unaccounted-for technology and cus- tomer base are of particular note. But this also re- sulted in valuation adjustments in the area of ﬁxed assets and inventories. At the same time, the good- will from acquisitions initially provisionally deter- mined during the year declined. Since the newly re- corded assets or added values are generally limited in their temporal use, a scheduled depreciation/amor- tization of these assets must be made. These addi- tional effects on the income statement resulting from the PPA are hereinafter referred to as PPA effects and negatively affected the Group’s operating proﬁt in 2017 with a total of € 6.2 million. In the develop- ment of proﬁtability, speciﬁcally in terms of the de-

54 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S 2017 Course of Business | Economic Conditions 2017 of the Consolidated Balance Sheet, the ﬁnancial liabilities taken out in connection with the Nor-Cal acquisition, which as of December 31, 2017 still totaled € 60.3 million (previous year: € 0.2 million), had a particular impact. As in previous years, equity also rose again in 2017. After € 315.6 million as of December 31, 2016, this amounted to € 320.9 mil- lion at the end of ﬁscal 2017. That is an increase of € 5.3 million. As a result of the sharp increase in the balance sheet total, the equity ratio fell from 68.7 % to 58.0 % as of December 31, 2017. One key parameter for the development of cash and cash equivalents was the increase in operating cash ﬂow to € 71.4 million. In the context of capital ex- penditure, cash outﬂows, in particular, from acqui- sitions (€ 74.6 million) and other replacement and expansion investments (€ 27.7 million) were recorded, while in the ﬁnancing activities area the dividend payment of € 35.5 million, the borrowing of ﬁnancial liabilities to ﬁnance the Nor-Cal acquisition (€ 70.0 mil- lion) and the repayment of ﬁnancial liabilities of € 15.2 million were of particular signiﬁcance. Despite cash outﬂows for acquisitions, capital expenditures of € 27.7 million were practically at the level forecast in last year’s outlook (€ 28.0 million). As of Decem- ber 31, 2017, cash holdings amount to € 97.4 million and ﬁnancial liabili ties amount to a total of € 60.3 mil- lion. On a net basis, the Group thus remains debt- free. We consider the very sound ﬁnancial position of the Group as an essential basis for further sus- tainable proﬁtable growth and, therefore, we are able look ahead to the future with great conﬁdence. Management and Supervisory Boards propose to pay out a dividend of € 2.00 per share for the ﬁscal year 2017 (previous year: € 3.60 per share). This would mean that € 19.7 million or 36.6 % of the Group’s net income are distributed to the shareholders. velopment of administrative and general expenses, it must also be taken into account that one-time expenses for, amongst others, advisory services in connection with two takeover offers and the acqui- sitions were incurred. The ﬁgures adjusted to reﬂect these special effects would be at the same level as in 2016. However, the projected signiﬁcant improve- ment in the margin situation was not able to be achieved in view of the already mentioned effects from the customer mix. Despite the ﬁnancial liabilities taken out in connection with the Nor-Cal acquisition, the ﬁnancial income was practically stable with – € 0.4 million. In view of the operating proﬁt, earnings before taxes accordingly reached € 71.0 million. Last year’s forecast of a par- allel development of operating proﬁt and earnings before taxes and thus the forecast of a signiﬁcant increase in earnings before taxes was also achieved with this increase of € 3.4 million or 5.1 %. Taking into account a reduced tax ratio (24.2 % after 30.4 % in the previous year) and tax expenses of € 17.2 million (previous year: € 20.6 million), net income rose even more sharply by € 6.8 million or 14.5 % to € 53.8 mil- lion (previous year: € 47.0 million). After reaching a record high in the Company’s history in the previous year, this ﬁgure was again signiﬁcantly increased in 2017 and, as a result of an unchanged number of outstanding shares, it also resulted in hitherto un- precedented earnings per share of € 5.46 (previous year: € 4.77). Financial position and liquidity The renewed growth in business volume and the ac- quisitions also had an impact on the development of the ﬁnancial position. Overall, the balance sheet total as at December 31, 2017 increased by € 94.1 million to € 553.4 million (previous year: € 459.3 million). In addition to the increase totaling € 65.1 million in tangible and intangible assets to € 217.8 million, inventories and trade accounts receivable also in- creased to € 113.4 million (+ € 31.6 million) and € 80.1 million (+ € 10.7 million), respectively. In contrast, cash and cash equivalents declined by € 12.6 million to € 97.4 million. On the liabilities side

Pfeiffer Vacuum Technology AG – Annual Report 2017 55 Economic Conditions 2017 USA Overall economic development World economy The global economy showed a slight improvement in 2017 compared to the previous year, based on positive impetus already noted in the second half of 2016. According to the latest estimates of the Inter- national Monetary Fund (IMF), global growth should have been nominally 3.7 % (previous year: 3.1 %). In the emerging and developing countries, growth was expected to be at 4.7 % (previous year: 4.2 %). In industrialized countries, on the other hand, the gross domestic product accelerated to an average of 2.3 % (previous year: 1.6 %). Europe Along with the global economy improvement, eco- nomic growth in the eurozone developed positively in the course of 2017. Accordingly, the gross do- mestic product rose by 2.4 % (previous year: 1.6 %) and thus also inﬂuenced the development of the industrialized countries as a whole. The econo- mic recovery was quite broad and beneﬁted from the increase in private consumer spending. Despite historically low interest rates and slightly improved corporate sentiment, investments developed rather below average. The export business was also adverse- ly affected by the development of the euro/US dollar exchange rate, mainly during the second half of 2017. Parallel to the eurozone development as a whole, the two major national economies in the EU also showed gratifying growth. Although gross domestic product increased less strongly in France at 1.8%, however, there was a positive trend compared to the previous year (1.2 %). The German economy grew by 2.5 % in 2017, slightly better than the eurozone as a whole. After 1.9 % in the previous year, the development was, therefore, relatively robust. In 2017, the stron- gest stimulus again came from consumption. The unemployment rate, already at a low level, dropped from 6.1 % on average in 2016 to 5.7 % in 2017. At the same time, the number of employed persons continued to rise, reaching another record high of 44.7 million at the end of 2017. Despite rising interest rates and uncertainty sur- rounding the new U.S. president, the U.S. economy increased its economic output in 2017 by 2.3 % com- pared to the previous year (1.6 %). The unemployment rate dropped from 4.9 % in 2016 to 4.1 % and had a positive effect on consumption propensity. Over the course of the year, the U.S. Federal Reserve Bank slightly raised the base interest rate several times and held out the prospect of further measures. After the election of Donald Trump as the U.S. President at the end of 2016, economic policy remains an uncertainty factor. The effects of the U.S. tax reform cannot yet be conclusively assessed in terms of its economic signiﬁcance for the U.S. Asia Against the backdrop of a continued expansive ﬁscal policy, Japan was able to increase its economic out- put to 1.8 % (previous year: 0.5 %). In the third quar- ter, in particular, improved momentum was felt. In 2017, the recent weaker economic development in China improved slightly. According to ofﬁcial ﬁgures, the Chinese economy grew by 6.8% (previous year: 6.6 %). This was still distinctly higher than the global average, but far below earlier growth rates. India, on the other hand, recorded a slight slowdown in growth momentum, with growth falling from 7.6 % in the previous year to 6.7 %. Mechanical engineering and the vacuum industry In the ﬁrst eleven months of 2017, production in the German mechanical and plant engineering sector clearly surpassed the previous year’s level with a real gain of 3.0 %. Overall, the sentiment can be described as conﬁdent, as the real change in incoming orders also showed a signiﬁcant increase of 8.0 %. At the same time, capacity utilization increased from 84.6 % to 87.9 % (as of the end of October). The full-year results for exports of machinery and plant were not yet available for 2017. In the ﬁrst ten months, they were 6.3% higher in real terms than in the previous year. Based on the entire year, this very positive development will be conﬁrmed based on assessments.

56 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Economic Conditions 2017 | The Pfeiffer Vacuum Group The number of people employed in the German mechanical and plant engineering sector in October 2017 amounted to about 1,028,000. This equals an increase of around 11,000 employees compared to October 2016. At the same time, the number of short-time workers fell by 56.0 %. Vacuum technology is used in many industries. Accordingly, the vacuum industry is also to be con- sidered against the backdrop of global economic development. However, there were considerable differences within the market segments that are important for the vacuum industry: the cyclical semiconductor industry, for example, displayed a sustained high willingness to invest. A similar posi- tive development could be recorded in 2017 in the areas of coating and analytics. The areas of research & development and industry stagnated at the high level of the previous year. The Pfeiffer Vacuum Group Operations Pfeiffer Vacuum is a leading supplier of vacuum solutions. The product portfolio is marketed under the Pfeiffer Vacuum and adixen product brands and includes all components and systems for vacuum generation, measurement, analysis and leak de- tection. The products of both brands complement each other perfectly so that we can offer clients customized vacuum solutions that are tailored to their individual requirements. The name Pfeiffer Vacuum stands globally for innovative and customized vacuum solutions as well as superior engineering, expert consultancy, and reliable service. With our technologically advanced turbo pumps and backing pumps, we set the standards in our indus- try. This claim to leadership will continue to be our driving force in the future. Our products cover a wide range of pumps including vacuum generation pumps, vacuum chambers, vacuum measurement and analysis equipment, installation components as well as complete vacuum systems. With the help of our products, vacuum pressure conditions similar to those in outer space are created which are essential for research, various industrial processes, and for manufacturing many everyday objects. We are a machine engineering company that designs high-tech products of the highest quality and manu- factures them predominantly for export markets. Besides the two main design and production sites in Asslar, Germany, and in Annecy, France, the Pfeiffer Vacuum Group has an extensive network of its own sales and service companies. The Company’s primary markets are in Europe, Asia and the USA. Corporate Group structure and organization As of December 31, 2017, 32 companies belonged to the Pfeiffer Vacuum Group compared to 21 in the pre- vious year. The changes are a result of the ac quisition of Nor-Cal Products Holdings Inc., Yreka, California, U.S. and its subsidiaries as well as Advanced Test Concepts LLC., Indianapolis, Indiana, U.S. and Dreebit GmbH, Dresden, Germany that occurred during this ﬁscal year. Additionally, in connection with property acquisitions in the U.S., a total of three real estate companies were established. Furthermore, Pfeiffer Vacuum Malaysia SDN. BHD. was founded in Kulim, Malaysia. adixen Vacuum Technology (Shang- hai) Co., Ltd., China, was liquidated. Pfeiffer Vacuum GmbH, Asslar, Germany, and Pfeiffer Vacuum SAS, Annecy, France, play a central role in the Corporate Group. Pfeiffer Vacuum GmbH organizes the development and manufacture of all Pfeiffer Vacuum products, is the distributor for Germany and also manages central equity investments for the Corporate Group. As at December 31, 2017, the Company employed a total of 728 employees. Pfeiffer Vacuum SAS is, in a sense, the French equivalent of Pfeiffer Vacuum GmbH. The Company employed 667 employees at year’s end, is the main develop- ment and production facility for adixen products, and is responsible for sales in France. A total of 1,395 employees work in these two companies. This represents nearly half of all workers employed in the entire Corporate Group (2,945 at the end of 2017). What is more, Pfeiffer Vacuum Components & Solutions GmbH, Pfeiffer Vacuum Semi Korea Ltd., and Pfeiffer Vacuum Romania S.r.l. are tasked with the manufacturing and assembly of own products. As a result of the acquisitions that took place during this ﬁscal year, the number of corporate subsidiaries with their own production sites has increased. To be mentioned in particular are Nor-Cal Products, Inc. and Advanced Test Concepts, LLC., as well as Nor-Cal Products Viet Nam Co., Ltd.

Pfeiffer Vacuum Technology AG – Annual Report 2017 57 The overall corporate structure as at December 31, 2017, was as follows: THE PFEIFFER VACUUM CORPORATE GROUP AS OF DECEMBER 31, 2017 Headquarters Share (in %) Pfeiffer Vacuum Technology AG Pfeiffer Vacuum GmbH Pfeiffer Vacuum Austria GmbH Pfeiffer Vacuum (Schweiz) AG Pfeiffer Vacuum (Shanghai) Co., Ltd. Pfeiffer Vacuum (India) Private Ltd. Pfeiffer Vacuum Ltd. Pfeiffer Vacuum Scandinavia AB Pfeiffer Vacuum Singapore Pte. Ltd. Pfeiffer Vacuum Taiwan Corporation Ltd. Pfeiffer Vacuum Benelux B. V. Pfeiffer Vacuum (Xi’an) Co., Ltd. Pfeiffer Vacuum Malaysia SDN. BHD. Pfeiffer Vacuum Inc. Advanced Test Concepts, LLC. Nor-Cal Products Holdings, Inc. Nor-Cal Products, Inc. Nor-Cal Products Viet Nam Co., Ltd. Nor-Cal Products Europe Ltd. Nor-Cal Products Korea Co., Ltd. Nor-Cal Products Asia Paciﬁc Pte. Ltd. Pfeiffer Vacuum California Realty Holdings, LLC. Pfeiffer Vacuum Indiana Realty Holdings, LLC. Pfeiffer Vacuum New Hampshire Realty Holdings, LLC. Pfeiffer Vacuum Holding B. V. Pfeiffer Vacuum Italia S. p. A. Pfeiffer Vacuum (India) Private Ltd. Pfeiffer Vacuum Korea Ltd. Pfeiffer Vacuum Components & Solutions GmbH Pfeiffer Vacuum SAS Pfeiffer Vacuum Romania S. r. l. Pfeiffer Vacuum Semi Korea, Ltd. Pfeiffer Vacuum Korea Ltd. Dreebit GmbH 1 Group shareholding in total 100.0 % Germany Germany Austria Switzerland China India Great Britain Sweden Singapore Taiwan The Netherlands China Malaysia USA USA USA USA Vietnam Great Britain Republic of Korea Singapore USA USA USA The Netherlands Italy India Republic of Korea Germany France Romania Republic of Korea Republic of Korea Germany 100.0 100.0 99.4 100.0 27.0 1 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 73.0 1 75.5 1 100.0 100.0 100.0 100.0 24.5 1 100.0 The remaining Corporate Group companies are le- gally independent corporations that are active in sales and service tasks. Essentially all companies are legally organized in a form that can be compared to a German limited liability company (GmbH). Information pursuant to § 315a Sub-Para. 1 HGB The subscribed capital of Pfeiffer Vacuum Technology AG as at December 31, 2017 was unchanged at K € 25,261 and consists of a total of 9,867,659 no-par value shares. There are no different classes of shares currently or previously existent, so all shares have the

58 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S The Pfeiffer Vacuum Group same rights, in particular the same voting and divi- dend entitlement rights. Accordingly, the calculated share of the subscribed capital amounts to € 2.56. As of December 31, 2017, Dr. Karl Busch, Ms. Ayhan Busch, Ms. Ayla Busch, Mr. Sami Busch and Mr. Kaya Busch, all of Germany, according to their own state- ments, had a total of 38.96 % of the shares of the Company (previous year: 27.19 %). Further informa- tion is not available at the time. The shares are held indirectly through Pangea GmbH, Maulburg, Germany, and further independent legal entities belonging to the family-run Busch Group and are deemed to be held by the persons named. To our knowledge, there were no further shareholders with a holding of more than 10.0 % as at December 31, 2017 and also as at December 31, 2016. At the Annual General Meeting on May 21, 2015, the shareholders authorized Pfeiffer Vacuum to buy back treasury shares in accordance with § 71 Sub-Para. 1, No. 8, German Stock Corporation Act (“AktG“). This authorization covers the buyback of a proportionate amount of the Company’s share capital of up to € 2,526,120.70 (986,766 shares, representing 10 % of the share capital at the time the resolution was adopted), requires the consent of the Supervisory Board for execution and is valid through May 20, 2020. The Corporate Group does not own treasury shares as at December 31, 2017 and 2016. For information relating to the employment contracts with the members of the Management Board, please refer to the corresponding paragraphs in the com- pensation report. Amendments to the Articles of Association can be decided at the Annual General Meeting by a simple majority of voters present at the meeting unless the law mandates a larger majority. To our knowledge, there are no restrictions with regard to voting rights or with regard to the transfer of shares. Management Board members, according to the Articles of Asso- ciation and §§ 84, 85 German Stock Corporation Act (“AktG“), are appointed by the Supervisory Board for a maximum term of ﬁve years. Reappointments or extensions to the tenure period are permitted for a maximum of ﬁve years in each case. Through a resolution of the Annual General Meeting on May 24, 2016, the Management Board was autho- rized to increase the subscribed capital once or repeat- edly by € 12,630,602.24 or 4,933,829 shares, in ex- change for cash or contributions in kind (authorized capital). This authorization is valid until May 23, 2021 and requires the consent of the Supervisory Board. According to the resolution of the Annual General Meeting on May 22, 2014, the Management Board is authorized to issue fractional bonds with option or conversion rights or conversion obligations, proﬁt participation rights or participating bonds (or combi- nations of these instruments) with an aggregate nominal value of up to € 200,000,000.00 and to grant the holders conversion rights for up to 2,466,914 no- par bearer shares of the Company having a pro-rata amount of up to € 6,315,299.84 of the share capital. This authorization is valid until May 21, 2019, and requires the consent of the Supervisory Board. There are no further aspects that would require dis- cussion within the context of § 315a Sub-Para. 1 HGB. Markets and market position Sales by markets Products from Pfeiffer Vacuum are employed in numerous industry markets. Over 14,000 customers trust in the reliability of our products. Pfeiffer Vacuum divides these customers into the following markets: semiconductor, industry, coating, analytics, and re- search & development (R&D). As far as the position- ing of these markets is concerned, only a limited amount of data is available regarding the size of the entire market and individual market segments. Based on surveys conducted by the German Engineering Federation (VDMA) as well as our own estimates, we expect to take the leading market position in the market segments of industry, coating, analytics, and research & development. In the semiconductor market segment, we should rank second. Without vacuum technology, a number of innovative processes would be inconceivable, such as in nano- technology, in producing LEDs or in scientiﬁc research. Many of these new technologies create innovative products and production processes. Strong advances in people’s personal and professional communication patterns, for example, are bringing forth ever more new technologies in the semiconductor industry. The rising demand for energy coupled with the need to conserve resources is leading to a steadily in- creasing amount of new developments in the ﬁeld of energy supply. These, and further social and indus- trial trends, are typically producing additional market-

Pfeiffer Vacuum Technology AG – Annual Report 2017 59 APPLICATION EXAMPLES Semiconductor Industry Analytics R & D Coating Lithography General applications Mass spectrometers Renewable energies Solar cell technology Metrology Electron beam welding Electron microscopy Nanostructures Display coating (LED, OLED) Data storage CVD (chemical Vapor Deposition) PVD (physical Vapor Deposition) Freeze drying Surface analysis Particle accelerator technology Vacuum drying Gas analysis Space simulation Glas s coating Etching Steel degassing Biotechnology Plasma technology Surface protection Ion implanter Leak detection Life science Particle physics Tool coating ing opportunities for Pfeiffer Vacuum. Our strengths include the ability to serve all markets, which makes us largely independent of developments in individual market segments. Semiconductor Our vacuum pumps are needed in the semiconduc- tor industry for the production of microprocessors and handling systems. Customers in this industry predominantly require a large number of medium- sized and large backing pumps, but also turbopumps, as well as measurement equipment. Chip manu- facturers can signiﬁcantly increase their yield with our decontamination systems. The semiconductor industry itself particularly beneﬁts from the changes in communication technology. New ﬁelds of applica- tion for vacuum arise, for example, in nanotechnolo- gy. Our customers are increasingly located in Asia, and also in the United States, as well as – to a lesser extent – in Europe. Industry In this segment, we combine a heterogeneous category of industrial customers who require our vacuum solutions for speciﬁc production steps. Industrial trends such as quality improvement, energy supply and conservation, mobility or environmental protection are currently leading to new ﬁelds of application. Examples include metallurgy, tube pro- duction, as well as air conditioning and refrigeration technology. A further ﬁeld of application is solar thermal energy. The absorber tubes needed for this technology are evacuated by using our pumping stations as well as continuously being tested for leaks with our leak detectors. Our customers in the industrial segment primarily come from Europe, as well as from the United States, and increasingly from Asia. Analytics Our largest customers in this market are so-called OEM (Original Equipment Manufacturer) customers, i.e. manufacturers of industrial systems or analytical instruments. Complex analytical devices such as scanning electron microscopes are primarily em- ployed for industrial quality control. This industry is characterized in particular by megatrends such as Life Science, Biotechnology, and Security. Ever smaller and lighter portable analyzers are required in environmental technology, in security technology or for doping analyses. The analytical industry there- fore typically requires small and medium-sized turbo- pumps along with backing pumps and measurement equipment. Our major customers in this market are located in the United States, Japan, the United Kingdom, and Germany. Research & Development Collaboration with research facilities enjoys a long tradition at Pfeiffer Vacuum. Whether in physics or chemistry laboratories at universities, prominent research institutions like the Fraunhofer and Max Planck Institutes or in large multinational research facilities – all of them rely upon the quality and dependability of our mass spectrometers, leak detectors, or vacuum solutions. Working in close cooperation with research facilities in Europe, the United States, and Asia, new applications arise continuously in the ﬁelds of energy supply or health care technology. Coating Without vacuum, many things that are used in daily life could not be produced in the desired quality. The antireﬂective coatings on eyeglass lenses, the coatings within ﬂat screen manufacturing, the coat-

60 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S The Pfeiffer Vacuum Group | Proﬁtability, Financial Position, and Liquidity ings on Blu-ray discs or on high-quality bathroom faucets and ﬁttings as well as the coatings on solar cells or architectural glazing are produced in vacuum chambers, for example. High-quality tools are coated and hardened under vacuum to make them even more durable. One signiﬁcant megatrend in this segment is the orientation towards regenerative energies, such as solar energy. What is predominantly required in the coating industry are medium-size and large backing pumps and turbo pumps as well as measurement equipment and complete vacuum systems. Our customers are located in all industrial nations. All subsidiaries in the Group therefore have self- directed managements and essentially make their own decisions within central guidelines on how to attain the targets that have been deﬁned by Corpo- rate Headquarters and the business unit (sales, EBIT margin and earnings before taxes). The supervisory bodies of the subsidiaries, whose composition also includes members of the Management Board of Pfeiffer Vacuum Technology AG, the heads of the business units or Headquarters in Asslar, Germany, must be involved in the case of major decisions. Steering instruments All subsidiaries are steered by Corporate Headquar- ters in Asslar through the stipulation of annual sales and proﬁtability targets (“Management by Objec- tives”), and thus primary steering lies with the legal entities in the regions. The achievement of these targets is monitored by means of detailed target/actual comparisons and variance analyses within the framework of monthly reporting, which was expanded to market information, to additionally take account of the requirements of the business unit structure. This ensures that undesirable trends will be identiﬁed and corrected early on. Monthly conference calls with the management of the sub- sidiaries additionally ensure that all business devel- opment questions are discussed. In addition, face-to- face meetings with staff at the local site are held by Group and business unit management. For countries in which Pfeiffer Vacuum is not represented directly through a subsidiary, the sales targets are agreed with the local distribution partner. Here, too, the achievement of sales targets is measured by means of target/actual comparisons. A further steering instrument consists of the variable remuneration of the local management of the non-German sub- sidiaries and of the sales staff. This sensitizes em- ployees to cost structures, and so to the Com pany’s long-term success, even if they do not work in areas of the Company which have a direct inﬂuence on sales. Strategy and control Strategy Pfeiffer Vacuum develops, produces and distributes vacuum solutions that are highly challenging in terms of technology, quality, reliability, service life, and performance; all are attributes that our customers associate with products from Pfeiffer Vacuum. The Company’s long-term strategic objectives include selling its products on the basis of quality, not price. The sales strategy also includes stressing the long- term total cost of ownership advantages over the life of a Pfeiffer Vacuum product (“Total Cost of Owner- ship”). These stem, among other things, from lower maintenance and repair costs, longer service lives and lower energy consumption in comparison with rival products. A further strategic objective is to always be close to the customer. We live up to this objective through our worldwide presence, and we assure that everything we do always focuses squarely on our customers. Corporate Management The Management Board of Pfeiffer Vacuum Technology AG assumes responsibility for the strategic leader- ship of the Corporate Group. The Group companies were allocated to the business units “Semiconductor & Coating” or “Analytics & Industry” according to the focus of their operations and the market potential. They are directly subordi- nated to this business unit, and their comprehensive regional responsibility for all market segments con- tinues to apply unchanged.

Pfeiffer Vacuum Technology AG – Annual Report 2017 61 Proﬁtability, Financial Position, and Liquidity customers outside Germany are signiﬁcantly higher than German sales by regions. Sales in the Americas region and the USA segment, on the other hand, are nearly identical because virtually all sales in this region are handled by our American subsidiaries. Development of sales in 2017 Sales by Segment After a very satisfactory ﬁscal 2016 in terms of rev- enue development, the year 2017 showed a further, this time very noticeable improvement in revenues to a record level of € 587.0 million. This corresponds to an increase of € 112.8 million or 23.8%, which is attributable both to organic growth, mainly in the semiconductor industry, as well as to growth as a result of corporate acquisitions. Presented below are net sales by segment, region, product and market for 2017. It should be noted with respect to net sales by segment that the sales shown in this presentation are allocated on the basis of the registered ofﬁce of the Company that invoiced the sales. Therefore, the segment-based presentation shows net sales by subsidiary. On the other hand, net sales by region include all sales in a speciﬁc region, regardless of which subsidiary within the Pfeiffer Vacuum Group invoiced the sales. Net sales by seg- ment and net sales by region will differ from each other to a greater or lesser extent. In the Asia seg- ment, for example, net sales differ signiﬁcantly from those recorded for the Asia region, since the Asia segment includes only the direct sales of our Asian subsidiaries. In contrast, the Asia region additionally contains sales that the manufacturing companies generate directly with Asian customers – for example, with customers in Japan or India. In the case of net sales by segment, the sales generated by the German Company through direct deliveries to agents and/or SALES BY SEGMENT in %, (previous year) 24.2 (23.0) USA 7.8 (8.8) France 11.5 (12.3) Asia (without Republic of Korea) 23.0 (23.0) Germany 17.3 (14.0) Republic of Korea 16,2 (18,9) Europe (without Germany and France) USA Particularly due to the acquisition of Nor-Cal and ATC in ﬁscal 2017, but also as a result of the organic growth of our existing American sales subsidiary, the USA segment recorded a disproportionately favorable sales development. In particular, the organic growth and the development of Nor-Cal Products, Inc. were due to the dynamic development of the semiconduc- tor industry, while the analytics segment stagnated at a high level. The development of the U.S. dollar exchange rate in 2017 had a slightly negative impact on sales development in the USA. SALES BY SEGMENT USA Germany Republic of Korea Europe (without Germany and France) Asia (without Republic of Korea) France Total 2017 2016 Change in € millions in € millions in € millions 142.1 134.8 101.3 95.1 68.2 45.5 587.0 108.9 109.3 66.5 89.4 58.3 41.8 474.2 33.2 25.5 34.8 5.7 9.9 3.7 112.8 in % 30.5 23.3 52.2 6.3 16.9 9.1 23.8

62 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Proﬁtability, Financial Position, and Liquidity As a result of the disproportionately high growth, the share of sales in the past ﬁscal year 2017 amounted to 24.2 % (previous year: 23.0 %). This puts the USA segment ahead of Germany (23.0 % share of sales). Germany Following a pleasing increase of around € 4.9 million in the previous year, sales in the Germany segment again improved signiﬁcantly in 2017 and recorded double-digit growth rates both in € million and in percent. Signiﬁcant impulses came from Pfeiffer Vacuum GmbH and Pfeiffer Vacuum Components & Solutions GmbH. In addition, the acquisition of Dree- bit GmbH in the year under review contributed to this outstanding development. Republic of Korea In general, the sales subsidiaries in the Republic of Korea segment showed a strong focus on the semi- conductor market. Based on the high momentum in this market, sales revenues here developed partic- ularly well and this segment showed the strongest growth in both absolute and relative terms. In addi- tion, this development was slightly positively inﬂu- enced by the exchange rate of the Korean won, while the corporate acquisitions had only a very insigniﬁ- cant impact here. Europe (without Germany and France) Although sales revenues in Europe were inﬂuenced by the acquisition of Nor-Cal, by far the largest share of growth was recorded by the established sales sub- sidiaries. Of particular note is the growth achieved by the sales subsidiaries in the Netherlands and England. This must be seen against the weakness of the British pound, which had a negative impact on sales performance. Beyond the consequences of an unfavorable exchange rate development, we do not as yet detect any adverse effects on sales revenue resulting from Britain’s exit from the European Union. SALES BY REGION Europe Asia The Americas Rest of World Total Asia (without the Republic of Korea) The development in the Asia segment (without the Republic of Korea) was mainly due to the growth in sales recorded by the local business unit in China, which experienced a marked increase in demand from the semiconductor and coating segments. The acquisition of Nor-Cal (in this case the business unit in Singapore) also inﬂuenced the development posi- tively. France With an increase of € 3.7 million, sales in France dis- played an encouraging trend. It should be noted that, unlike in part in previous years, this development was caused by demand in France itself and is based exclusively on organic growth. Sales by Region SALES BY REGION in %, (previous year) 37.9 (39.8) Europe 0.1 (0.1) Rest of World 24.5 (23.3) The Americas 37.5 (36.8) Asia Europe Sales development in Europe was very satisfactory. Particularly noteworthy is the development in Ger- many. However, we were also able to achieve pleasing sales increases with our customers in the Nether- lands and in England. Moreover, it should be borne in mind that in addition to organic growth in this region, 2017 2016 Change in € millions in € millions in € millions in % 222.5 220.3 143.8 0.4 587.0 188.9 174.6 110.5 0.2 474.2 33.6 45.7 33.3 0.2 112.8 17.8 26.2 30.1 100.0 23.8

Pfeiffer Vacuum Technology AG – Annual Report 2017 63 the initial consolidation of Dreebit also had a positive inﬂuence on the development of sales. Sales by Product Asia As in the previous year, the considerable improve- ment in demand from the semiconductor industry particularly impacted the development of sales in the Asia region. This region has thus been on a stable path of growth since 2014, and this was particularly inﬂuenced in 2017 by our customers in South Korea and China. In addition, the development of sales was further enhanced by the already strong position of Nor-Cal in Asia, while demand in Japan declined slightly. The overall increase in sales of € 45.7 million also meant that the Asia region has virtually caught up with Europe in terms of its share of total sales. The Americas With an increase of € 33.3 million or 30.1 %, this region developed very positively under the inﬂuence of a variety of factors. Due to the strong focus placed on this region by Nor-Cal and ATC, which were ac- quired in the year under review, large portions of the increase can be attributed to external growth. At the same time, however, sales with our existing semiconductor customers in the United States also developed extremely well, while a downward trend was recorded in the Industry and Research & Devel- opment market segments. The development of sales in the Americas continued to be affected essentially by the development in the USA. Since there is still virtually no direct business by the German or French units in this region, this development largely con- formed to the previously explained course of sales according to segments. In line with the development of sales in North and South America, the share of total revenue also rose slightly from 23.3 % in the previous year to 24.5 % in the year 2017. SALES BY PRODUCT in %, (previous year) 29.5 (30.5) Turbo pumps 2.1 (2.0) Systems 18.4 (21.0) Service 27.4 (22.3) Instruments and components 22.6 (24.2) Backing pumps Turbo pumps On the basis of an already high level of sales in 2016, sales in this product group again signiﬁcantly in- creased by 20.0 %. The analytics market segment continued to account for the largest share of sales, but in 2017, it recorded somewhat more restrained momentum than the coating market or the semi- conductor industry. With a share of total sales of 29.5 % (previous year: 30.5 %), the turbopumps remained the strongest product group in 2017 as well. Instruments and components With an increase of € 55.1 million or 52.2 %, the Instruments and Components product group showed the largest increase in both absolute and relative terms in the past ﬁscal year. This development was due principally to the acquisitions of Nor-Cal as well as to ATC. At the same time, however, we also recorded very pleasing organic growth, especially concerning the products of Pfeiffer Vacuum Com- ponents & Solutions GmbH and leak detectors. SALES BY PRODUCT Turbo pumps Instruments and components Backing pumps Service Systems Total 2017 2016 Change in € millions in € millions in € millions 173.4 160.6 132.8 107.8 12.4 587.0 144.5 105.5 115.0 99.7 9.5 474.2 28.9 55.1 17.8 8.1 2.9 112.8 in % 20.0 52.2 15.5 8.1 29.8 23.8

64 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Proﬁtability, Financial Position, and Liquidity With a considerably increased share of 27.4 % of to- tal sales (previous year: 22.3 %), this product group developed into an important mainstay of Pfeiffer Vacuum and now contributes even more to a very balanced distribution of sales revenue according to product groups. Systems Sales in this project-driven sector rose slightly from € 9.5 million in the previous year to € 12.4 million in the past ﬁscal year. A share of the sales develop- ment is also attributable to the purchase of Dreebit and its system division. Backing pumps As in the previous year, so-called process pumps for the semiconductor industry, together with dry pumps for coating applications, made the largest contribution to the very good sales development in 2017. Accordingly, in regional terms, the increase resulted particularly from the Asian economic area, but also to a lesser extent from Germany. Due to the disproportionately low increase in comparison with the overall sales development, the share of total sales revenue also declined slightly from 24.2 % to 22.6 %. Service The installed basis of products from the Pfeiffer Vacuum Group creates a sound foundation for our service activities. The partly aggressive and corrosive process conditions under which the pumps are used, particularly in the semiconductor industry, make regular maintenance an absolute necessity. Similarly to the previous years, the 8.1 % increase in 2017 also resulted primarily from increased sales to our semiconductor customers. This also included the customers of Dreebit, which was acquired in the year under review. As always in years with a good business development in the area of product sales, the increase in service revenues in 2017 was also less than proportional to the development of total revenues. Accordingly, the share of total sales also fell slightly from 21.0 % to 18.4 %. SALES BY MARKET Semiconductor Industry Analytics Coating Research & Development Total Sales by Market SALES BY MARKET in %, (previous year) 38.4 (32.6) Semiconductor 9.9 (11.8) Research & Development 12.6 (11.7) Coating 22.1 (24.5) Industry 17.0 (19.4) Analytics Semiconductor The semiconductor industry continued to develop dynamically. In addition, the acquisition of Nor-Cal had a positive inﬂuence on the development of Pfeiffer Vacuum sales revenues in this market. The Group’s main impetus in the semiconductor market came once again from Asia and the USA in 2017, but growth was also achieved in Europe. Overall, we recorded a very sharp increase in sales revenues of € 70.7 million, or 45.6 %. Industry Our most heterogeneous market segment includes a broad spectrum of customers ranging from the 2017 2016 Change in € millions in € millions in € millions 225.4 129.1 100.1 74.2 58.2 587.0 154.7 115.9 92.1 55.4 56.1 474.2 70.7 13.2 8.0 18.8 2.1 112.8 in % 45.6 11.4 8.7 33.9 3.7 23.8

Pfeiffer Vacuum Technology AG – Annual Report 2017 65 automotive and metalworking industries to the food industry. This market segment performed a sideways movement with a modest upward trend in ﬁscal 2017. In view of the heterogeneous nature of this market segment, positive and negative trends are balanced out extremely well, both in individual sec- tors and regionally. Nevertheless, the fact that we were able to record an increase in sales revenues of € 13.2 million is principally due to the acquisitions of Nor-Cal and ATC. Analytics Starting from an already high level of sales of € 92.1 million in the previous year, a further increase to € 100.1 million was achieved in the year under review. In regional terms, this was mainly due to the developments in Germany and Europe, while initial consolidation effects were not recorded. Our customers in this sector use the whole spectrum of products, even if the focus is on turbopumps. The ongoing high level of turbopump sales is substantially impacted by this market segment. Coating The solar industry remained of great importance for the coating market in general. Pleasing growth was attained here again in 2017, albeit less pronounced due to the solar industry than in previous years. In regional terms, Germany in particular stands out in this development. Research & Development At € 58.2 million, sales in the research & develop- ment market segment – our most stable market segment – lay slightly over the previous year’s level (€ 56.1 million). Due to the high number of state- owned and partly state-owned research institutes, this segment developed largely independently of economic trends. Also typical is the development within the ﬁscal year with a slightly more restrained start to the year and a stronger fourth quarter, which was also observed in 2017. New orders and orders on hand After new orders of € 481.9 million in 2016, this ﬁgure increased to € 642.1 million in 2017. This corresponds to a signiﬁcant increase of € 160.2 million or 33.2 %. This pleasing development was recorded in virtually all product areas, but was also heavily inﬂuenced by the newly acquired companies. Based on an already strong fourth quarter of 2016, the year-to-date per- formance in 2017 was consistently good with even greater momentum in the fourth quarter of 2017. According to information from the ﬁrst weeks of 2018, this momentum is continuing at least at the beginning of the current ﬁscal year. The book-to-bill ratio, the ratio between new orders and sales, stood at 1.09 in 2017 compared to 1.02 in the previ- ous year. The order volume on hand as at December 31, 2017 totaled € 127.4 million and lay 76.2% over the pre- vious year’s ﬁgure of € 72.3 million. The visibility of orders on the basis of average sales in 2017 remains unchanged at about two months. DEVELOPMENT OF ORDER INTAKE in € millions 2012 2013 2014 2015 2016 2017 DEVELOPMENT OF ORDER BACKLOG in € millions 2012 2013 2014 2015 2016 2017 445.6 398.0 404.9 456.9 481.9 642.1 71.8 61.1 59.3 64.7 72.3 127.4 Earnings development Gross proﬁt and cost of sales At € 376.9 million, the cost of sales increased by a total of € 83.1 million or 28.3 % in 2017 compared to the previous year’s ﬁgure of € 293.8 million. This increase was predominantly due to the growth in sales revenues, which made it possible to realize economies of scale. However, the ﬁrst-time recording of the newly acquired companies in the consolidated ﬁnancial statements led to an increase in the cost of sales, in particular, due to the PPA effects. The PPA effects additionally recorded within the cost of sales in 2017 amounted to a total of € 4.8 million. Moreover, the change in the customer mix led to an additional increase in the cost of sales. Overall, the

66 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Proﬁtability, Financial Position, and Liquidity development of the cost of sales compared to the development of sales was disproportionately high, resulting in a slight decrease in the gross margin – the ratio of gross proﬁt to sales revenues. In absolute terms, the outstanding gross proﬁt of € 180.5 million in the previous year increased again to € 210.0 million in the past ﬁscal year. The gross proﬁt therefore increased by € 29.5 million or 16.4 %. The gross margin decreased for the reasons explain ed from 38.1 % in the previous year to currently 35.8 %. In addition to the effects referred to previously from the customer mix, economies of scale and PPA, the stronger euro during the course of the year also had a negative impact on the development of the gross proﬁt and the gross margin. Research and development expenses We are continuously committed to advancing the development of vacuum technology through our own research projects as well as by rigorously fostering teaching and science. We view research and devel- opment expenses as an indispensable investment for the future. Accordingly, a high share of sales was expended for research and development activities again in 2017. After 5.5 % in the previous year, this percentage share still amounted to 4.7 % as a result of the excellent development of sales. In absolute terms, the research and development expenses total- ing € 27.8 million in the past ﬁscal year lay € 1.5 mil- lion over the previous year’s ﬁgure of € 26.3 million. PPA effects were only of secondary importance. GROSS PROFIT in € millions 2016 2017 GROSS MARGIN in % 2016 2017 180.5 210.0 38.1 35.8 Selling and administrative expenses: The total ﬁgure for selling and administrative ex- penses of € 112.3 million in 2017 was € 21.2 million higher than the previous year’s ﬁgure (€ 91.1 million). This represents an increase of 23.3%. Despite the PPA effects recorded here, selling and marketing expenses increased less than sales (+ 14.4%), while administrative and general expenses developed dis- proportionately (+ 37.1%). The main reason for the increase in administrative and general expenses lay in, amongst others, the one-time advisory expenses in connection with the takeover offers and the com- pany acquisitions made. Yet, the share of selling and administrative expenses of total sales declined and accounted for 19.1 % in the past ﬁscal year (previous year: 19.2 %). Adjusted for funds obtained through grants for re- search and development services with an amount of € 3.1 million (previous year: € 4.4 million), the net research and development expenses totaled € 24.7 million (previous year: € 21.9 million). Other operating income and expenses As in previous years, other operating income and other operating expenses principally included the Group’s foreign exchange gains and losses. The other operating income of € 10.3 million (previous year: € 10.8 million) in addition contained subsidies for expenses of € 3.1 million (previous year: € 4.4 mil- lion) and miscellaneous income of € 1.4 million. The other operating expenses of € 8.9 million (previous year: € 6.0 million) in 2017 also contained virtually only the foreign exchange losses recorded. The net foreign exchange results in 2017 at € – 3.0 million were well below the pre vious year’s ﬁgure of € + 0.4 million. Operating proﬁt With € 71.4 million in 2017, the highest ever operating proﬁt of the long Company history was achieved. On the basis of a record turnover of € 587.0 million, the effects of the customer mix, the PPA effects and a decline in the foreign exchange results had a noticeable negative effect, however, on earnings in 2017. In contrast, positive effects on the operating proﬁt resulted from economies of scale in the area of cost of sales and, despite some one-time effects, also from the slightly disproportionately low increase in selling and administrative expenses. Compared to 2016, the operating proﬁt therefore increased signiﬁcantly overall by € 3.4 million or 5.0 % from

Pfeiffer Vacuum Technology AG – Annual Report 2017 67 Income taxes In contrast to the higher earnings before taxes, tax expenses dropped from € 20.6 million to € 17.2 mil- lion in 2017. Accordingly, the relative burden in the form of the tax ratio declined. After 30.4 % in the previous year, this ratio was 24.2 % in 2017. A key factor in this development was the tax reform in the USA, which led to a corresponding reduction in deferred tax liabilities as a result of the reduced tax rates. In addition to these one-time accounting effects, we expect the fall in the tax rates to provide positive impulses in the future for the US economy as a whole and also for our activities there. Net income After already reaching a record high of € 47.0 million in the previous year for the highest net income in the Company’s history, this ﬁgure increased signiﬁ- cantly in 2017 again. The € 53.8 million achieved in this context represents an increase of € 6.8 million or 14.5 %. However, against the background of the PPA effects and the one-time expenses in connec- tion with the takeover offers, which were recorded in net proﬁt or loss, we remain satisﬁed with this development. Nevertheless, the net return on sales, i.e., the ratio of net income to sales, fell slightly from 9.9 % in the pre vious year to 9.2 %. INCOME BEFORE TAXES in € millions 2016 2017 NET INCOME in € millions 2016 2017 67.6 71.0 47.0 53.8 € 68.0 million. This corresponds to an operating proﬁt margin, or EBIT margin, of 12.2 % (previous year: 14.3 %). Adjusted to account for the PPA effects additionally included in the operating proﬁt totaling € 6.2 million, the operating proﬁt in 2017 would have amounted to € 77.6 million and have resulted in an EBIT margin of 13.2 %. The amount of depreciation and amortization (for tangible and intangible assets) included in this ﬁgure was recorded at € 20.8 million for 2017 (previous year: € 20.4 million), which resulted in an operating proﬁt before depreciation and amortization (earnings before interest, taxes, depreciation and amortization, or EBITDA) of € 92.2 million. After € 88.4 million in 2016, this represented an increase of € 3.8 million or 4.3 %. On the other hand, the operating proﬁt per employee fell slightly. OPERATING PROFIT in € millions 2016 2017 2017 EBIT MARGIN in % 2016 2017 2017 OPERATING PROFIT PER EMPLOYEE in K € 2016 2017 2017 1 without PPA effects Financial income 68.0 71.4 77.6 1 14.3 12.2 13.2 1 29 25 28 1 As a result of persistently low interest rates, the borrowing of ﬁnancial liabilities in connection with the Nor-Cal acquisition in the middle of 2017 had only a marginal impact on the development of interest expenses. In contrast, ﬁnancial income increased slightly in 2017. This resulted in a stable net ﬁnancial income of € – 0.4 million.

68 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Proﬁtability, Financial Position, and Liquidity Earnings per share Parallel to the net income, the earnings per share also improved signiﬁcantly. Following € 4.77 in the previous year, a ﬁgure of € 5.46 was achieved in 2017 – also a new record in the history of the Company. EARNINGS PER SHARE in € 2016 2017 Financial position 4.77 5.46 The acquisitions during the reporting year were also key drivers in the development of the ﬁnancial posi- tion of the Pfeiffer Vacuum Group, with the result that the balance sheet total increased from € 459.3 mil- lion as of December 31, 2016 to € 553.4 million at the end of the 2017 ﬁscal year. The biggest absolute change was recorded in the area of intangible assets, which, among other things, showed the goodwill resulting from the company acquisitions, as well as customer relationships and the technology acquired. In addition, ﬁxed assets increased signiﬁcantly by € 21.9 million to € 106.9 million, also as a result of the company acquisitions. However, the increased capital expenditure of the Pfeiffer Vacuum Group has also had an impact. Due to the positive business development and the very good sales performance, particularly at the end of the year, but also as a result of additions to the consolidated companies, invento- ries increased by € 31.7 million and trade accounts receivable by € 10.7 million compared to the respec- tive previous year’s ﬁgure. Cash and cash equivalents declined from € 110.0 million at the end of the 2016 ﬁnancial year to € 97.4 million on Decem ber 31, 2017, particularly, as a result of the acquisitions and the as- sociated repayment of ﬁnancial liabilities. A detailed development analysis of cash and cash equivalents can be found in the section “Liquidity and cash ﬂow” below. The acquisition of Nor-Cal had an impact on the liabilities side of the balance sheet, in particular, the increase of the long-term ﬁnancial liabilities by € 60.2 million. In addition, virtually all balance sheet items were characterized both by the increase in business volume and by the acquisitions. This applies, in particular, to trade accounts payable, which in- creased by € 9.9 million to € 40.8 million. Equity increased by € 5.3 million from € 315.6 million to € 320.9 million. This change resulted primarily from the net income generated in the reported year (€ 53.8 million), the dividend payment to sharehold- ers of Pfeiffer Vacuum Technology AG (€ 35.5 mil- lion) and the net decrease of € 13.0 million of other equity components. The effects recorded here from foreign exchange conversion were signiﬁcant for the devel opment of other equity components. Due to the marked increase in the balance sheet total with a moderate increase in equity, the equity ratio fell from 68.7 % to 58.0 %. Nevertheless, Pfeiffer Vacuum continues to enjoy an exceptionally high equity base. The ﬁnancial liabilities are below average compared to the balance sheet total and do not limit the Group’s ﬁnancial ﬂexibility. Due to the organic growth and the acquisitions, the short-term working capital also rose by € 32.5 mil- lion. However, following the acquisition of Nor-Cal in the middle of 2017, the increase is slightly dispro- portionate compared to the development of sales. CHANGE IN NET WORKING CAPITAL Inventories Trade accounts receivable Trade accounts payable Net working capital Dec. 31, 2017 Dec. 31, 2016 Change in € millions in € millions in € millions 113.4 80.1 – 40.8 152.7 81.7 69.4 – 30.9 120.2 31.7 10.7 – 9.9 32.5

Pfeiffer Vacuum Technology AG – Annual Report 2017 69 Liquidity and cash flow After € 63.6 million in 2016, the operating cash ﬂow increased to € 71.4 million in 2017. This corresponds to a signiﬁcant increase of € 7.8 million or 12.2 %. In particular, higher earnings before taxes (+ € 3.4 mil- lion) had a positive effect on the operating cash ﬂow. While both income taxes paid and depreciation/ amortization on ﬁxed assets and intangible assets were at about the same level as in the previous year, the development of provisions and payables led to signiﬁcant improve ments in terms of operating cash ﬂow. This was offset by cash outﬂows from the in- crease in inventories, which had a negative impact on operating cash ﬂow of € 15.2 million (previous year: € 6.0 million). The cash ﬂow per share increased from € 6.45 in 2016 to € 7.24 in the past 2017 ﬁscal year. The further increased level of this ratio continues to represent the ability of the Pfeiffer Vacuum Group to generate disproportionately high cash inﬂows as part of its operating activities. CASH FLOW MARGIN in % 2016 2017 CASH FLOW PER SHARE in € 2016 2017 13.4 12.2 6.45 7.24 Decisive for capital expenditures for investment activities in the year 2017 were net expenditures for acquisitions. With regard to these, a total of € 74.6 million was paid out in the past ﬁscal year. Furthermore, scheduled replacement investments and partly also of expansion investments took place to an increased extent, as planned. Capital expendi- tures rose accordingly from € 18.0 million in the previous year to € 27.7 million in the reporting year. These were to be seen against proceeds from the sale of property, plant and equipment amounting to € 0.2 million (previous year: € 0.6 million), with the result that after € 17.4 million in 2016, the overall cash outﬂow totaled € 102.0 million. Further informa- tion on the composition of capital expenditure can be found in the section “Capital expenditures and ﬁnancing” that follows. The borrowing of ﬁnancial liabilities in the amount of € 70.0 million connected with the acquisition of Nor-Cal was the most signiﬁcant factor for cash ﬂow due to ﬁnancing activities. The dividend payment to the shareholders of Pfeiffer Vacuum Technology AG amounting to € 35.5 million (previous year: € 31.6 million) and the redemption of ﬁnancial liabili- ties (€ 15.2 million, previous year: € 20.5 million) were the other factors for cash ﬂow from ﬁnancing activities. Therefore, in ﬁscal 2017, a total cash inﬂow of € 19.3 million was to be recorded, after a total cash outﬂow of € 52.1 million was recorded for the previous year. The overall cash-outﬂow, with consideration of cur- rency effects, amounted to a total of € 12.6 million (pre vious year: € 5.4 million) due to increased ex- penditures for acquisitions and investments as well as the increased dividend payment with an operating cash ﬂow increase of € 7.8 million and cash inﬂow from borrowing of ﬁnancial liabilities. This lead to a decrease in cash and cash equivalents by 11.5 % to € 97.4 million (previous year: 4.6 % to € 110.0 mil- lion). Even after borrowing of ﬁnancial liabilities in the year 2017, the Company remains debt-free on a net basis. Furthermore, at the close of the ﬁscal year, Pfeiffer Vacuum had unused credit lines amounting to € 13.6 million (previous year: € 53.7 million). The free liquidity is invested in interest-bearing ﬁnan- cial instruments. A cash management system is in place in the German Group companies in Asslar in order to pool liquidity. In the year 2017, Pfeiffer Vacuum SAS in France was included in this cash manage- ment system. Conservative and largely short-term investment vehicles, such as money market or time deposits at ﬁnancial institutions, dominate where ﬁnancial investments are concerned. Speculative transactions are not conducted. Both liquidity man- agement as well as steering of the interest-rate change risk are thus primarily handled at Corporate Headquarters, taking into consideration all relevant matters within the Corporate Group. Capital expenditures and ﬁnancing Operating business, capital expenditures and divi- dend payments were ﬁnanced as in previous years solely by internal funds of the Corporate Group. The acquisitions of ATC and Dreebit were also ﬁnanced from existing Group liquidity. Financial liabilities of € 70.0 million were taken out to ﬁnance the Nor-Cal acquisition. In the course of the year, € 10.0 million

70 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Proﬁtability, Financial Position, and Liquidity | Non-ﬁnancial Performance Indicators thereof and assumed ﬁnancial liabilities of € 5.2 mil- lion were already repaid. Capital expenditures of € 27.7 million related predominantly to necessary reinvestments for machinery, plant and equipment, but also partly to expansion investments in Romania and the USA. Increased capital expenditure was geared to the strategic orientation of the Group. Despite the performed acquisitions, the forecasted investment volume of € 28.0 million for 2017 was practically achieved. With regard to the strategy supporting a three year investment plan as decided by the Management and Supervisory Boards please refer to the related remarks in the Outlook. The balance sheet total of the Pfeiffer Vacuum Group has long demonstrated a very solid equity base. Although the equity ratio fell from 68.7 % at the end of the previous year to 58.0 %, it still shows an above- average ﬁgure for the mechanical engineering indus- try. The current assets ratio, as the ratio of current assets to current liabilities, amounted to 261 % (previous year: 305 %) and continued to reﬂect the sound ﬁnancing concept and high credit rating of Pfeiffer Vacuum. The increased capital expenditures of € 27.7 million and a virtually unchanged deprecia- tion / amortization volume of € 20.8 million in 2017 resulted in a depreciation expense ratio (ratio of capital expenditure to depreciation/amortization) of 133 % compared to 88 % in the previous year. These depreciation / amortization amounts remain high as a result of purchase price allocation (PPA). CURRENT ASSETS RATIO in % 2016 2017 DEPRECIATION EXPENSE RATIO in % 2016 2017 Value Reporting The concept of value-based steering of the Company remains an integral element of the management approach that exists within the Pfeiffer Vacuum Corporate Group. All important decisions at Pfeiffer Vacuum are taken with due consideration of all material ﬁnancial aspects. The following diagram provides an overview of various ﬁnancial performance indicators which are important for us. In addition to ROCE (Return On Capital Employed; operating proﬁt relative to the total of ﬁxed assets and working capital) as a parameter for the yield on capital em- ployed, the Company’s return on sales, earnings per share, and the paid or proposed dividend are also presented here. Based on the high level of the previous year, the aforementioned performance indicators for 2017 mainly showed a slight decline. This was partly due to one-time expenses in connection with, amongst others, the takeover offers and PPA effects. How- ever, the operating results showed the expected improvements. Management and Supervisory Boards would like to let the shareholders participate in the Company’ success. Accordingly, the dividend pro- posal provides for a dividend of € 2.00 per share. This corresponds to a payout ratio of 36.6 % (pre- vious year: 75.5 %). KEY VALUE REPORTING INDICATORS ROCE (in %) 305 261 88 133 2016 2017 2016 2017 2016 2017 2016 2017 After-tax Return on Sales (in %) Earnings per Share (in €) Dividend per Share (in €) 1 Subject to approval by the Annual General Meeting 25.0 24.0 9.9 9.2 4.77 5.46 3.60 2.00 1

Pfeiffer Vacuum Technology AG – Annual Report 2017 71 Overall assessment of business performance Diversity A look at the income statement of Pfeiffer Vacuum Group reveals a highly proﬁtable company. The op- erating proﬁt once again grew signiﬁcantly and, at € 71.4 million, exceeded the previous record ﬁgure from 2012 (€ 68.5 million). Due, among other things, to one-time expenses and PPA effects, however, the operating proﬁt margin showed a declining trend at the same time, but at 12.2 % was still above average for a mechanical engineering company. The record net income and earnings per share achieved in the previous year were once again exceeded in 2017. There has been no change in the rock solid ﬁnancial position of Pfeiffer Vacuum. The Group is debt-free on a net basis and has a high equity ratio. The ex- cellent liquidity situation puts us in a position to push ahead with the necessary steps for success- ful further development of the Group and again distribute a high dividend to shareholders. We look forward to continuing this development in 2018 and beyond. Non-ﬁnancial Performance Indicators Employees Pfeiffer Vacuum employed a total of 2,945 employees at the end of ﬁscal 2017. This represents an increase of 21.9 % compared to the previous year’s ﬁgure of 2,415 employees. This development mainly originated in the USA and Asia and resulted primarily from the acquisitions made in 2017. COMPOSITION OF WORKFORCE BY REGIONS 2017 2016 in % 61 26 13 1,721 561 133 in % 71 23 6 1,793 764 388 2,945 100 2,415 100 Europe Asia The Americas Total Pfeiffer Vacuum has a global standing and so unites a multitude of people of different origin under one umbrella brand. Our employees are proud of the successful cooperation between different cultures and nationalities. For several years now, Pfeiffer Vacuum has belonged to the “Diversity Charter”, an initiative by the German Federal Government. The “Diversity Charter“ represents a fundamental com- mitment to fairness and appreciation of people in companies. Of the 2,945 employees, 505 are female and 2,440 are male. Therefore, the proportion of women constitutes 17.1 % of the entire workforce. Vacuum techno logy is a speciﬁc ﬁeld of mechanical engineering in which there are generally only very few potential young females with adequate training. Nevertheless, it is the ﬁrm intention of company policy to increase the proportion of women in this traditionally male- dominated area of work. The French subsidiary of Pfeiffer Vacuum has concluded a formal agreement with all labor unions involved with the speciﬁc pur- pose of promoting women. The Super visory Board of Pfeiffer Vacuum Technology AG has been under female chairmanship since October 26, 2017, follow- ing the judical appointment of Ms. Ayla Busch. With the appointment of Ms. Nathalie Benedikt as Chief Financial Ofﬁcer on November 27, 2017, the Manage- ment Board of Pfeiffer Vacuum has a female quota of 25 %. In its subsidiary companies, how ever, several management and key positions in the areas of Purchasing, Finance, Communications, Marketing, Human Resources as well as Sales are occupied by female managers. Training young talent The promotion of young talent is of great importance at Pfeiffer Vacuum. At various locations, we offer company training courses as industrial mechanics, in the business administration area, as well as in warehouse logistics. In ﬁscal 2017, Pfeiffer Vacuum made a total of 113 apprenticeships available world- wide (previous year: 86). In addition to the company apprenticeship, Pfeiffer Vacuum in Germany participates very successfully in the “Studium Plus“ project, a dual degree program involving the cooperation of the Technical University of Mittelhessen and the Chamber of Industry and Commerce. Furthermore, a partnership exists with the Georg-August University Göttingen in relation to the

72 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Non-ﬁnancial Performance Indicators company apprenticeships. In this way, we ensure our young talent in industrial and mechanical engineering as well as in the area of business informatics. New employees complete an introductory course in the basic principles of Vacuum Technology, while sales and service employees receive advanced training courses about products and service measures. Also, many of our subsidiaries offer temporary intern- ships for graduates and students and/or temporary positions for students who work during their vaca- tion. This enables young people to gain an insight into operational processes and to qualify themselves as potential employees. In cooperation with different schools and universities, we perform guided tours of the Company and present ourselves to the public at career fairs. In France especially, several of our skilled workers give lectures on vacuum technology and corporate governance at universities. In addition, the name recognition that Pfeiffer Vacuum enjoys among natural science graduates due to the pres- ence of its products in research laboratories is not to be underestimated. Qualiﬁcations of skilled workers and executives The success of Pfeiffer Vacuum is decisively based on the expertise, the loyalty, and the high motivation of our employees. Particularly the expert knowledge of our service and sales employees plays an import- ant role in the cooperation with our customers. They beneﬁt from the many years of experience to which our experts can resort in relation to physical and chemical reactions of the most diverse molecules and substances under vacuum conditions. Most projects are developed by our customers together with our Sales and Market teams, which in turn also consult the relevant experts from the areas of Research & Development as well as Production and Service as necessary. The skilled knowledge of our employees is also of major importance in the manufacturing and installation of our products. The ultimate goal is to offer each customer a perfect vacuum solution for his application. Good training and the readiness to adapt to changes in market forces by continuous development are thus the best prerequisites for all employees, regard- less of age, in order to secure jobs and sustain professional success. Further training plays a critical role in our Company in all locations. Practical programs exist for the qualiﬁcation of executives, and foremen and group leaders are trained in leadership and management techniques. Furthermore, the Company pays attention to spe- cialized advanced training to transfer technical inno- vations into the Company. Chinese, German, English or French language courses are offered depending on location and need. PROFESSIONAL QUALIFICATIONS OF THE WORKFORCE Development and Production, Total Graduates of universities, colleges, and universities of applied sciences Employees with professional training Employees without professional training Apprentices 2017 1,539 346 950 160 83 Administration, Service and Sales, Total 1,406 Graduates of universities, colleges, and universities of applied sciences Employees with professional training Employees without professional training Apprentices 765 523 88 30 The provision of further training options is generally linked to the local conditions and requirements. For example, the French subsidiary fulﬁlls the relevant statutory requirements with more than twice the expenditure as would be required by law. Here, the focus is on training and further training measures in the area of “quality”. The management also operates a software system for competence management of the employees to better identify and implement existing expertise and to be able to match training courses speciﬁcally.

Pfeiffer Vacuum Technology AG – Annual Report 2017 73 PROPORTIONAL DISTRIBUTION OF PROFESSIONAL QUALIFICATIONS OF ALL EMPLOYEES in % 50.0 Employees with professional training 3.9 Apprentices 8.4 Employees without professional training 37.7 Graduates of universities, colleges, and universities of applied sciences Remuneration and incentive schemes The personnel costs in ﬁscal 2017 amounted to € 191.0 million compared with € 157.6 million in ﬁscal 2016. The incentive scheme of Pfeiffer Vacuum also differs according to local conditions and customs. The sales personnel basically receive performance- related incentives via a bonus scheme oriented to sales growth and proﬁt. Added to that – depending on the location – are other bonus, incentive or em- ployee participation schemes as well as bonuses for outstanding individual achievements. AGE STRUCTURE OF THE WORKFORCE 2017 2016 Under 30 years of age 30 to 50 years of age Over 50 years of age Total 549 1,620 776 2,945 in % 19 55 26 410 1,365 640 in % 17 56 27 100 2,415 100 Pension scheme The pension scheme is similarly varied in the indi- vidual locations. Apart from a purely public scheme in France funded by the French subsidiary, the world- wide pension scheme includes additional measures and payments into pension funds, the offer of a pen- sion plan and direct insurance with the additional option of deferred compensation. For the employees in the head ofﬁce in Asslar who had no employer- ﬁnanced pension contribution up to 2008, voluntary payment into the company pension scheme has been agreed upon as part of the performance-related remuneration. Social responsibility We take our social responsibility towards our em- ployees seriously. We therefore endeavor to ensure that the relevant quota of disabled employees in the various countries is met. We also believe that a family-friendly working environment is very important. Varying from region to region, this includes models for ﬂexible working hours, provision of home ofﬁce connections, models for re-entering the working world with ﬂexible working hours and job sharing, speciﬁcally for young mothers and fathers. The illness rates in Asslar and Göttingen amounted to 5.7 % and 7.0 %, respectively, compared to the regional industry average of 5.0 %. In Annecy, the illness rate was lower with 3.0 %. The rate of staff ﬂuctuation also differed depending on the geographical location, with a ﬁgure of 5.8 % in Asslar in the past ﬁscal year and 3.8 % in Göttingen. In Annecy, the rate of staff ﬂuctuation was even lower at 1.1 %. Workplace safety Issues of workplace safety mainly relate to the production facilities of Pfeiffer Vacuum. In Asslar, there were 13 reported accidents in ﬁscal 2017 (pre- vious year: 8). This is equivalent to 18.0 accidents per 1,000 employees (previous year: 10.9). With 5 re- portable accidents in Göttingen, the ratio amounted to 31.8 accidents per 1,000 employees compared to 19.2 in the prior year. This ﬁgure is higher than the corresponding average of 18.4 for 2016 cited by the German Workers‘ Compensation Insurance Com- pany (ETEM, numbers for 2017 were not yet avail- able). The corresponding ratio for France was 16.5 with 11 reportable accidents (previous year: 51.5). Non-ﬁnancial Group report The Pfeiffer Vacuum Group is subject to EU Directive 2014/95/EU and the CSR (Corporate Social Responsibility) Directive Implementation Act of April 11, 2017 on strengthening non-ﬁnancial reporting. For the ﬁrst time in the ﬁscal year 2017, Pfeiffer Vacuum thus publishes a non-ﬁnancial group report according to §315b HGB, which will be available on group.pfeiffer-vacuum.com/non-ﬁnancial-report from April 30, 2018 onwards.

74 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Corporate Governance Report and Declaration on the Corporate Governance Corporate Governance Report and Declaration on the Corporate Governance The recommendations and suggestions contained in the German Corporate Governance Code (“DCGK”) have been a ﬁrm element of our corporate gover- nance for many years. On October 26, 2017, and amended on January 24, 2018, the Management and Supervisory Boards of Pfeiffer Vacuum Technology AG submitted the Statement of Compliance for the year 2017 re- quired pursuant to § 161 of the German Stock Cor- poration Act. It was made permanently accessible to shareholders on the Corporation’s website (group.pfeiffer-vacuum.com). Pfeiffer Vacuum Technology AG complies with all recommendations of the German Corporate Governance Code, as amended in February 2017, with the following two exceptions: The German Corporate Governance Code recom- mends that a ceiling is established for the length of time that members may serve on the Supervisory Board (Paragraph 5.4.1). The Supervisory Board does not consider that a particular length of service as a member of the Supervisory Board constitutes a criterion which disqualiﬁes a candidate from re-elec- tion to the Supervisory Board, and therefore does not take this criterion into account when selecting candidates. The German Corporate Governance Code recom- mends that variable remuneration components for members of the Management Board should in prin- ciple have a multi-year assessment basis which is essentially future-oriented (Paragraph 4.2.3). How- ever, the regulation on variable remuneration, which is applied for Manfred Bender, Dr. Ulrich von Hülsen und Dr. Matthias Wiemer, does not provide for an “essentially future-oriented” assessment basis. This deviation is based on the fact that the provision of the Code was newly created until February 2017 and the contracts were not able to be amended in the meantime. However, an adjustment by the Super- visory Board will be made in the near future. Shareholders and Annual General Meeting The Annual General Meeting is the supreme body of the corporation. At the Annual General Meeting, shareholders may exercise their voting rights them- selves, through a proxy of their choice, or a proxy nominated by the Corporation who is bound to act on their instructions. The shareholders make key decisions at the Annual General Meeting about the allocation of proﬁts, amendments to the Articles of Association, or the approval of share repurchase programs. All information and documents essential for the Annual General Meeting will be provided to the shareholders in a timely manner. The agenda and an explanation of the conditions of participation in addition to the shareholders’ rights will generally be announced one and a half months before the Annual General Meeting date. All documents and information for the Annual General Meeting are also available on our website. In addition, it is possible to electronically direct ques- tions to the employees of our Investor Relations Department. Using our ﬁnancial calendar, which is made public in the Annual Report, in the quarterly reports, and on our website, we inform shareholders and interested parties about key dates, publications, and events throughout the year. In addition, we maintain close ties with our shareholders through our active Investor Relations work. Moreover, it is also possible to contact the Company with questions at any time. Management Board Since November 27, 2017, the Management Board has consisted of Dr. Eric Taberlet (Chief Executive Ofﬁcer), Diploma in Engineering, Nathalie Benedikt (Chief Financial Ofﬁcer), Diploma in Business Admin- istration, Dr. Ulrich von Hülsen, Diploma in Physics, and Dr. Matthias Wiemer, Diploma in Engineering. On that date, the Supervisory Board appointed Dr. Taberlet as Chairman of the Management Board. He has over 30 years of experience in the vacuum industry and holds a Ph.D. in ﬂuid mechanics. Prior to his appointment to the Management Board, he was responsible for the Semiconductor & Coating business unit at Pfeiffer Vacuum. On the same date, Nathalie Benedikt was appointed as the Chief Finan- cial Ofﬁcer. She has in-depth expertise in the areas of strategy, controlling and ﬁnance, human resources as well as IT. In addition, she has served as Chief

Pfeiffer Vacuum Technology AG – Annual Report 2017 75 Financial Ofﬁcer at Pfeiffer Vacuum in 2013 and 2014. Parallel to the appointment of Dr. Taberlet and Ms. Benedikt, the former Chairman of the Management Board, Mr. Manfred Bender, was dismissed for good cause. In order to meet the increased management de- mands of organic growth and the acquisition of three companies, the Supervisory Board has, ef- fective August 1, 2017, appointed Dr. Ulrich von Hülsen as an additional member of the Manage- ment Board. Dr. von Hülsen, who holds a Ph.D. in physics, had already served as General Manager of Pfeiffer Vacuum GmbH for two years at that point and was responsible for the Analytics & Industry business unit in the Pfeiffer Vacuum Group. The members of the Management Board are re- sponsible for the further development and strate- gy of the Company. They are also involved in the day-to-day running of the Company and are even responsible for operations. The four-eyes principle applies in exercising the duties and responsibilities of the Management Board. Major decisions are always made jointly. Personal expenditures, such as travel and enter- tainment expenses, require the approval of another Management Board member. In addition to close cooperation and reciprocal information on a daily basis, board meetings are weekly as of December 2017. The Management Board works exclusively for Pfeiffer Vacuum. Moreover, the Board members are also members of supervisory organs of various sub sidiaries. Manfred Bender, who was dismissed in the reporting year, is a member of the supervisory board of Volksbank Heuchelheim eG, Heuchelheim, Germany, and chairman of the Supervisory Board of Schunk GmbH, Heuchelheim. The responsibilities of the current members of the Management Board are as follows: PFEIFFER VACUUM TECHNOLOGY AG MANAGEMENT BOARD Dr. Eric Taberlet CEO Nathalie Benedikt CFO Dr. Ulrich von Hülsen Dr. Matthias Wiemer Business Unit Semiconductor & Coating Central Functions Business Unit Analytics & Industry Global Operations & Components Sales & Marketing Production / Quality Training / Service Supply Chain Controlling & Finance Sales & Marketing Global Sourcing Corporate Communications Production / Quality Global Production Footprint IT Human Resources Training / Service Supply Chain Components Business Research & Development Investor Relations Research & Development Supervisory Board Pursuant to the statutory requirements and the Articles of Association of Pfeiffer Vacuum Technology AG, the Supervisory Board consists, in principle, of a total of six persons. Four persons represent the share- holders and two persons represent the employees of the Company. Upon resignation of former Supervisory Board mem- bers Dr. Oltmanns and Dr. Lust on October 25, 2017, a judicial appointment of two Supervisory Board members was to take place upon request of major shareholder Pangea GmbH, Maulburg, effective October 26, 2017, until the next Annual General Meeting. The court, however, only granted the request to the extent that Ayla Busch, who also strived for the position of Supervisory Board Chair, was appointed as a member of the Supervisory Board. The constituent meeting of the Supervisory Board thus took place with ﬁve Board members on October 26, 2017 and Ayla Busch was voted Chairwoman of the Supervisory Board. The vacant Board position is to be newly ﬁlled not later than at the Annual General Meeting in May 2018.

76 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Corporate Governance Report and Declaration on the Corporate Governance Management and Supervisory Board members, with the exception of the antitrust commissioning of the law ﬁrm Menold Bezler Rechtsanwälte Partnerschaft, Stuttgart, in connection with the takeover bids by Pangea GmbH, Maulburg, of which the former chair- man of the Supervisory Board Dr. Michael Oltmanns is a partner, in ﬁscal 2017. Finally, the Rules of Proce- dure for the Management Board provide that the Supervisory Board must grant its approval for signif- icant business transactions. According to the recommendations of the German Corporate Governance Code, no more than two pre- vious Management Board members hold seats on the Pfeiffer Vacuum Supervisory Board. Furthermore, the Supervisory Board reviews the independence of its members. It has established standards for assess- ing this independence, which are based on the Code, in particular. According to these principles, the majority of current Supervisory Board members is considered independent, thus assuring independent advice and monitoring of the Management Board. The establishment of an Audit Committee is a long- standing practice at Pfeiffer Vacuum. As a certiﬁed public accountant, the Chairman of the Audit Com- mittee, Götz Timmerbeil, is particularly qualiﬁed to bear responsibility for the activities of the Audit Com- mittee, in particular in connection with questions relating to ﬁnancial accounting, compliance, and the risk management system. The task of the Nominating Committee is to suggest suitable candidates to the Supervisory Board who can then recommend them for nomination to the Annual General Meeting. Additionally, a Management Committee was formed. In the past, the Manage- ment Committee has deliberated the personnel matters of the board members in detail before – in accordance with the requirements of the German Corporate Governance Code – being resolved by the full Supervisory Board. The determination of Manage- ment Board compensation is thus subject to the provisions of the German Act on the Appropriateness of Management Board Compensation. In order to increase the transparency of the entire Supervisory Board panel, the Administration Committee was dissolved, effective October 26, 2017. Membership over the course of the year 2017 was as follows: ¡ Ayla Busch (Chairwoman), from October 26, 2017 Co-CEO Busch SE, Maulburg, Germany ¡ Dr. Michael Oltmanns (Chairman), until October 25, 2017 Attorney at Law and Tax Advisor ¡ Götz Timmerbeil (Vice Chairman), Auditor and Tax Consultant ¡ Filippo Th. Beck, Attorney at Law of Swiss Law, ¡ Helmut Bernhardt (Employee Representative), Development Engineer ¡ Manfred Gath (Employee Representative), Chair of the Employee Council ¡ Dr. Wolfgang Lust, Entrepreneur, until October 25, 2017 The Supervisory Board members elected by the shareholders Götz Timmerbeil and Filippo Th. Beck were voted during the Annual General Meeting to a term of ofﬁce of ﬁve years in May 2016. The court appointment of Ayla Busch expires at the end of the next ordinary Annual General Meeting. For the election as Supervisory Board Member, the Nominating Committee submits a nomination sug- gestion to the Supervisory Board. When selecting the candidates, care is taken to ensure that mem- bers of the Supervisory Board at all times possess the requisite expertise, skills, and professional ex- perience and are sufﬁciently independent. The inter- national activities of the Group and potential conﬂicts of interest are also taken into account. The Supervisory Board has determined the following speciﬁc objectives of its composition: occupational diversity (at least in the areas of business, techno- logy, and law), internationality gained during overseas professional experience, avoidance of potential con- ﬂicts of interest by excluding close relationships with competitors, and an age limit at the beginning of the term which is the same as the statutory retirement age. These objectives have been taken into consid- eration in the past, and this is also intended for future nominations. No compensations or beneﬁts for personal service rendered, especially consultation and brokerage ser- vices, were paid or granted to the members of the Supervisory Board during the period under review. No potential conﬂicts of interest requiring immedi- ate disclosure to the Supervisory Board arose for

Pfeiffer Vacuum Technology AG – Annual Report 2017 77 The committee memberships of the Supervisory Board members can be seen in the following overview: COMPOSITION OF THE SUPERVISORY BOARD COMITTEES Nomination Committee Ayla Busch (from October 26, 2017) Chairwoman Dr. Michael Oltmanns (until October 25, 2017) Chairman Audit Committee Yes Yes Chairman Management Committee Chairwoman Chairman Yes Götz Timmerbeil Filippo Th. Beck Helmut Bernhardt Manfred Gath Dr. Wolfgang Lust (until October 25, 2017) Yes Yes (from Oct. 26, 2017) Yes Yes (from Oct. 26, 2017) — — Yes — — - — — Yes The members of the Administration Committee until its dissolution were Dr. Michael Oltmanns (Adminis- tration Committee Chairman), Götz Timmerbeil and Helmut Bernhardt. The following members exercised further mandates. These are supervisory board mandates unless other- wise indicated: ¡ Götz Timmerbeil: VfL Handball Gummersbach GmbH, Gummers- bach (Chairman of the advisory board) and Arena Gummersbach GmbH & Co. KG, Gummersbach (Vice Chairman) ¡ Filippo Th. Beck: Candoria Group, Baar (Switzerland), member of supervisory organ of Candoria Holding AG, president of the supervisory organ of Progresa Holding AG and of Candoria Luxemburg Holding SA, Luxembourg; Tenro Group, Bottmingen (Switzerland), member of supervisory organ of various group entities; Biamathea AG, Basel (Switzerland), member of supervisory organ; Polyterra Liegenschaften AG in liquidation, Küsnacht (Switzerland), member of supervisory organ and liquidator; IKFE Properties I AG, Zürich (Switzerland), president of supervisory organ; Tainn-Immobilien AG, Bern (Switzerland), member of super visory organ ¡ Dr. Michael Oltmanns, until October 25, 2017: Becker Mining Systems AG, Friedrichsthal (chair- man), HPC AG, Mannheim (chairman); and Kathrein SE, Rosenheim (chairman of the super- visory body) The Company has taken out pecuniary loss liability insurance (so-called D&O insurance) for the members of the Management and Supervisory Boards. Collaboration between the Management and Supervisory Boards Close and trustful collaboration between the Manage- ment and Supervisory Boards is an essential pre- requisite for good corporate governance and serves the good of the Company. Supervisory Board meet- ings are held at least twice a year in this context, for which the members of the Management Board re- port in detail on the course of business operations as well as on the implementation of the strategy agreed upon with the Supervisory Board. If necessary, other executives also explain the current issues in their respective areas of responsibility. If needed, addi- tional special meetings are held. The Management Board reports to the Supervisory Board on the general condition of the Company, including the risk situation, through a monthly reporting system. Compensation report In the following section, the compensation for members of the Management and Supervisory Boards is detailed. Compensation for the Management Board The ﬁxed remuneration paid and expensed in ﬁscal 2017 amounted to K € 290 for Dr. Matthias Wiemer and for Dr. Ulrich von Hülsen – for the period after his appointment to the Management Board – a total of K € 92. For the last appointed members of the Management Board, Dr. Eric Taberlet and Nathalie Benedikt, a provision amounting to K € 27 and K € 20, respectively, was created for the contractual ﬁxed remuneration. The variable component recorded in the Income Statement in ﬁscal 2017 amounted

78 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Corporate Governance Report and Declaration on the Corporate Governance to K € 29 for Dr. Eric Taberlet, K € 13 for Nathalie Benedikt, K € 125 for Dr. Ulrich von Hülsen, and K € 300 for Dr. Matthias Wiemer. In-kind income was incurred amounting to K € 3 Dr. Ulrich von Hülsen), and K € 23 (Dr. Matthias Wiemer), respec- tively. A ﬁxed sum of K € 447 was expensed and paid to Manfred Bender until his departure; income in-kind amounted to K € 17. Total compensation received by Dr. Eric Taberlet in 2017 amounted to a total of K € 56 (previous year: –), Nathalie Benedikt received K € 33 (previous year: –), Dr. Ulrich von Hülsen re- ceived K € 220 (previous year: –), Dr. Matthias Wiemer received K € 613 (previous year: K € 694), and Manfred Bender received K € 464 (previous year: K € 977). The total compensation for the aforementioned active members of the Management Board amounted to K € 1,386 after K € 1,671 in ﬁscal 2016. Short- term variable remunerations paid in 2017 for ﬁscal year 2016 totaled K € 506 for Manfred Bender and K € 337 for Dr. Matthias Wiemer. These amounts were paid out in 2017 charging a provision recorded in 2016. For the remaining Management Board members, no variable compensation components were paid out in 2017. The variable component for Dr. Ulrich von Hülsen, Dr. Matthias Wiemer and Manfred Bender, whose appointment has meanwhile been withdrawn, is a bonus which the Supervisory Board determines. The discretion of the Supervisory Board can prevent extraordinary developments from leading to undue ﬂuctuations in the variable compensation. The devel- opment of the bonus is based on the development of the Group’s success and the proﬁts before taxes. However, the bonus is subject to a condition of sus- tainability. This means that if the success of the Group during the assessment year increases in comparison to the average of the two previous years, the success during the assessment year will be proven to be sustainable only in the amount of the average of both previous years’ successes; the bonus in this respect has therefore been earned and is payable. However, the sustainability of the portion in excess of this has not yet been proven. Therefore, only a small part of the bonus, to the extent that the bonus is based upon the surplus element, will be due when the annual ﬁnancial statements of the assessment year are approved (so-called short-term incentive). The larger part (so-called long-term incentive) will not be due until two years later and only in its fullest amount if the average proﬁts of these two following years are at least as high as the average proﬁts of the previous two years. Should they be less than the average, the long-term incentive will be correspond- ingly reduced. The purpose of this sustainability pro- viso is to avoid rewarding so-called “straw ﬁres” at the expense of sustainable proﬁtability. For Dr. Taberlet, the variable component consists of a year-related bonus, which depends on the achievement of targets set in advance by the Supervisory Board, and – to a large extent – a long-term variable remuneration component, half of which is dependent on the de- velopment of the Company’s EBITDA and the other half on the achievement of a further target set in advance by the Supervisory Board (so-called key performance indicator (KPI)) or alternatively several other KPIs determined in advance by the Supervisory Board during a three-year assessment period. The amount of the year-related bonus and the long-term variable remuneration is based on the degree to which targets have been achieved. In both cases, the calculation is based on an annual target amount allocated for the long-term remuneration for the fol- lowing three-year period. Long-term variable remu- neration can be paid for the ﬁrst time after the end of the 2020 ﬁnancial year. In the contract of employ- ment with Nathalie Benedikt the same compen- sation model shall apply. For the ﬁscal 2017, the pro- rated entitlement to the variable remuneration com- ponent for Dr. Taberlet was fulﬁlled by contractually deﬁned one-off payments. The same shall apply for Nathalie Benedikt in this context. Dr. Matthias Wiemer has received pension commit- ments in the unchanged amount of 40 % of the last ﬁxed salary elements. In this connection, total net pension expenses in accordance with IFRS of K € 232 were recorded in the Consolidated Statements of Income in ﬁscal 2017 (previous year: K € 215). Manfred Bender, dismissed in 2017, has received pension commitments in the unchanged amount of 60 % of the last ﬁxed salary elements. In this regard, total net pension expenses in accordance with IFRS of K € 281 were recorded in the Consolidated Statements of Income in ﬁscal 2017 (previous year: K € 261). In addition, there are pension commitments for further former board members. The net pension expenses attributable to these individuals for the year amount to K € 46 (previous year: K € 47).

Pfeiffer Vacuum Technology AG – Annual Report 2017 79 After K € 188 in 2016, a total of K € 240 was paid to the Pfeiffer Vacuum Trust e.V. in the current year 2017. The total net pension obligations for current and former members of the Management Board there- fore amounted to K € 5,777 (previous year: K € 5,779). Current pensions in ﬁscal 2017 amounted to K € 358, remaining unchanged. In ﬁscal 2017, the contract of employment with Management Board member Dr. Matthias Wiemer was renewed. The subsequent contract, with effect from January 1, 2018, includes the limitation of a potential compensation payment in accordance with the Corporate Governance Codex, also in case of a change of control. This is also valid for the new contracts of employment with Dr. Ulrich von Hülsen and Dr. Eric Taberlet and shall be valid for the con- tract with Nathalie Benedikt. Transparency The claim to provide all target groups promptly with the same information at the same time is a high priority in our corporate communications. One of the ways that this is manifested is that all relevant information is published in German and in English. Shareholders and interested parties can directly obtain information on current developments within the Group on the Internet. All ad-hoc releases by the Pfeiffer Vacuum Technology AG shall be made available on the Company’s website. The purchase and sale of Pfeiffer Vacuum shares by members of the Management and Supervisory Boards will be published immediately pursuant to Article 19 of European Regulation No. 596/2014 (Market Abuse Regulation), in Europe and on the Company’s web- site at group.pfeiffer-vacuum.com. Compensation for the Supervisory Board Equality According to § 111, Sub-para. 5, German Stock Cor- poration Act (“AktG“), the Supervisory Board has established a women’s quota of 0 –30 % for both the Supervisory and the Management Board and al- so a time limit until June 30, 2017, for the achieve- ment of this quota. This target was achieved at the expiry of the time limit. With the appointment of Ayla Busch as a member of the Supervisory Board, the percentage of women in the Board now lies at 20 %. The percentage of women in the Management Board of Pfeiffer Vacuum Technology AG lies at 25 % after the appointment of Nathalie Benedikt as Man- agement Board member. In January 2018, the Super- visory Board has established a women´s quota of 16.67 % for the Supervisory Board and 25 % for the Management Board as well as a time limit until December 31, 2020, for the achievement of this quota. The provision contained in § 76, Sub-Para. 4, Ger- man Stock Corporation Act (“AktG”), refers only to the management level at Pfeiffer Vacuum Technolo- gy AG. Due to its function as a ﬁnance holding, this company has only very few employees and there are no further management levels below the Manage- ment Board, thus making it impossible to establish a target ﬁgure. The members of the Supervisory Board received a ﬁxed compensation determined by the Annual General Meeting. On May 24, 2016, the Annual General Meeting approved an increase in the Super- visory Board’s compensation from ﬁscal year 2016 onwards. If members of the Supervisory Board leave or are newly elected during the ﬁscal year, their remuneration will be paid on a pro rata temporis basis. In ﬁscal 2017, Dr. Michael Oltmanns therefore received compensation of K € 86 (previous year: K € 105), while Götz Timmerbeil received an unchanged amount of K € 70. Ayla Busch received, for the ﬁrst time, com- pensation of K € 19. Helmut Bernhardt and Manfred Gath each received, as in the previous year, K € 35. Filippo Th. Beck received compensation of K € 35 (previous year: K € 21), while Dr. Wolfgang Lust received K € 29 (previous year: 35 T €). In the previous year, Wilfried Glaum received K € 14. The total com- pensation paid out to the Supervisory Board in ﬁscal 2017 therefore amounted to K € 309 (previous year: K € 315). Negative statement No further beneﬁts were paid to Management or Supervisory Board members over and above the listed compensation components. In particular, no stock options were granted, no loan entitlements were established, and no liability commitments were pronounced. In addition, no special agreements were made further on in connection with the termination of the activities for the Management or Supervisory Boards.

80 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Corporate Governance Report and Declaration on the Corporate Governance | Risk and Opportunities Report Compliance Adherence to all internal rules and legal regulations applicable to Pfeiffer Vacuum Technology AG and its subsidiaries by management and employees (com- pliance) has long been a goal of the Company as well as an inherent part of our company culture. This is especially expressed in our Code of Conduct, which applies for all employees. The Management Board is fundamentally committed to these tenets in addition to the “zero tolerance” principle. Our Code of Con- duct deﬁnes, among other things, integrity and law- ful conduct as basic standards and is the basis for the daily work of all employees in our Company. The Code of Conduct is also available externally in German and English via the Company website. In it, options for employees to report possible violations of the law in the Corporate Group are described. These are also open to third parties outside of the Company. Compliance with legal and internal Company regula- tions is a comprehensive task for which each area of the Company is fundamentally responsible. Com- mitted employees educate themselves further when required and take part in training in order to recognize and address current developments in their respective areas of responsibility. Determined breaches of compliance will be sanctioned accordingly. With external support enhancement and adaptation of the Compliance Management System is currently taking place. Accounting and auditing Pursuant to statutory provisions, the Consolidated Financial Statements of Pfeiffer Vacuum and the Quarterly Financial Reports are prepared in accor- dance with the current International Financial Reporting Standards (IFRS) as applicable in the European Union. The Annual Financial Statements of Pfeiffer Vacuum Technology AG as the parent corporation are prepared in accordance with the provisions of the German Com- mercial Code (“HGB”). This Consolidated Financial Statement was audited pursuant to the resolution of the Annual General Meeting on May 23, 2017 by Ernst & Young GmbH, Wirtschaftsprüfungsgesell- schaft, Eschborn, Germany. Ernst & Young GmbH also audits the Annual Financial Statements of Pfeiffer Vacuum Technology AG as well as the report on relations with afﬁliated companies. It was agreed with the auditors that the Chairman of the Audit Committee shall be immediately informed about any reasons for exclusion or prejudice arising during the audit, unless these are eliminated imme- diately. The auditor must also immediately report all ﬁndings and events of importance to the Supervisory Board that arise during the audit. In addition, the auditor must inform the Supervisory Board and note in the audit if the auditor determines facts during the course of the audit that are not compatible with the Statement of Compliance submitted by the Manage- ment and Supervisory Boards pursuant to § 161 of the German Stock Corporation Act (“AktG”). Risk and Opportunities Report The purpose of entrepreneurialism is to speciﬁcally utilize opportunities that have been identiﬁed in order to increase the value of the Company. However, this intrinsically involves taking risks. The opportunity and risk management system that we employ serves to optimize the relationship between risks and oppor- tunities with a view to sustainable business success. To assure this, we use and evolve suitable instru- ments, such as an appropriate handbook and/or a risk inventory, to identify, analyze, assess, and control opportunities and risks. In the following, opportuni- ties and risks are presented on a gross basis.

Pfeiffer Vacuum Technology AG – Annual Report 2017 81 Risk management system The Pfeiffer Vacuum risk management system in- cludes all levels of the Corporate Group. The system is described in a risk handbook that is available to all employees and updated on an as-needed basis. Our ﬂat hierarchy and fast communication channels aid in swiftly identifying risks at every level of the Com- pany and using suitable measures to combat them. The risk coordinator monitors the proper implemen- tation of risk management and the full risk inventory. The risk inventory is performed by the department heads at the large production sites and by the managing directors at the remaining subsidiaries. Consolidating all inventories at an aggregate level produces a differentiated overall picture of the Corporate Group’s risk position. During the year, risk inventories are updated if nec- essary; what we deﬁne, in addition to a concrete description of the risks, is the potential quantitative impact on operating proﬁt, the likelihood of occur- rence and suitable countermeasures. At year end, a complete risk inventory is made, which is reviewed by both the risk coordinator as well as the Manage- ment Board. In addition, we have deﬁned the areas of risk management within the individual market segments and have put in place the necessary pro- cesses as well as early-warning and monitoring systems. The monthly Corporate Group reporting system supports the risk management process with a variety of parameters and reports that serve as an essential basis for the Management and Supervisory Boards upon which to regularly deliberate on current business. The monthly meetings of senior executives and monthly conference calls are also ﬁrmly estab- lished institutions that enable the department heads and our subsidiaries to share with the Management Board information relating to potential risks and how to handle them. In addition to monthly reporting, our internal con- trolling system (ICS) helps us to identify risks in daily processes and thus avoid potential errors. The processes reviewed in this connection are ﬁrst and foremost ones that have a major impact on Pfeiffer Vacuum’s ﬁnancial position. Regularly conducted inspections protect against human error, system errors, and breaches of internal regulations. Risk management as it relates to consolidat- ed accounting pursuant to § 315, Sub-Para. 4, German Commercial Code (“HGB”) The purpose of an internal consolidated accounting control system is to ensure adequate certainty by implementing controls that – despite identiﬁed risks – enable consolidated ﬁnancial statements to be pre- pared in accordance with applicable standards. The Management Board bears overall responsibility for the internal control and risk management system in respect to the consolidated accounting process. All companies included in the Consolidated Financial Statements are covered by a strictly deﬁned man- agement and reporting organization. The principles, the organizational and procedural structures, as well as the processes of the individual control and risk management systems relating to consolidated accounting, are stipulated throughout the entire Corporate Group in guidelines and organizational procedures that are adapted if needed to reﬂect current external and internal developments. Our internal experts also work together with external counterparts on a case-by-case basis. This enables us to ensure that our accounting is in compliance with IFRS accounting and valuation regulations. In respect to the consolidated accounting process, we consider those characteristics of the internal control and risk management system to be major in nature that can have a decisive inﬂuence on con- solidated accounting and on the overall view pre- sented in the Consolidated Financial Statements. In particular, these are the following elements: ¡ Identiﬁcation of the major ﬁelds of risk and areas of control that are relevant to the consolidated accounting process, ¡ Monitoring controls for enabling the consolidated accounting process to be supervised by the Management Board, ¡ Preventive control measures in the ﬁnance and accounting systems of the Corporate Group and the companies included in the Consolidated Financial Statements, as well as in operational corporate processes that generate key information for drawing up the Consolidated Financial State- ments, including Management’s Discussion and Analysis for the Corporate Group (including sepa- ration of functions), ¡ Measures that assure proper IT-based processing of facts and data that relate to consolidated accounting.

82 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Risk and Opportunities Report Opportunity management system Risks The Pfeiffer Vacuum opportunity management system is closely linked to the risk management system, as many risks also offer opportunities that should be utilized where appropriate. This is why the risks identiﬁed in the risk inventory are simultaneously examined with a view to potential opportunities, which produces a correlation. In extensive decision- making processes, we analyze the question of whether the potential opportunities or risks pre- dominate, which means that we only engage in risks that appear to be manageable and are compensated for by the opportunities they offer. We conduct market and competition analyses in order to be able to explicitly make optimum use of industry and overall economic opportunities. This provides us with a good overview to further broaden our market share by speciﬁcally utilizing our potential. Close contact with our customers additionally aids us in identifying trends early on, thus enabling us to actively shape changes in the marketplace. With variance analyses and development forecasts, our highly reﬁned reporting system also identiﬁes opportunities in our regional structure. Our global sales and marketing network enables us to swiftly and purposefully take advantage of these opportunities. Risk classiﬁcation The risk classiﬁcation of the risks presented below was effected according to a matrix taking into consideration the probability of occurrence and the potential impact on the operating proﬁt. RISK CLASSIFICATION high medium low e c n e r r u c c o f o y t i l i b a b o r P low medium high Impact on operating proﬁt Risk classes low medium high Overall economy (risk class: low) As a globally operating Group, we are dependent upon global economic developments. Nor can Pfeiffer Vacuum avoid the effects of a decline in world eco- nomic growth, and would have to expect to see a direct impact on our sales and proﬁtability. However, the regional and market-segment mix of sales is very balanced at Pfeiffer Vacuum, and its overall structure compensates for revenues in economically weak and economically growing markets and indus- tries. Because it is seldom that all regions and market segments are equally affected by a deteriorating economic development. Despite the overall com- pensating developments, there may be an impact on the economic sucess of individual segments. The semiconductor market represents a signiﬁcant share of sales and Pfeiffer Vacuum is therefore exposed to a greater extent to the ﬂuctuations of this market. Managing the economic risk essentially involves steering capacities and costs. Flexible working time models enable us to swiftly and easily adapt pro- duction capacities to reﬂect the development of the order situation. Market segments (risk class: medium) Sales in Pfeiffer Vacuum’s individual market segments are closely linked to global economic developments. The research & development market, for example, is dependent upon government spending and focuses in connection with research projects. The semicon- ductor market follows its own cycles, which offers enormous opportunities during boom phases and involves major risks during phases of weakness. The coating market is closely linked to developments in the photovoltaic industry and did not recover again entirely after the crisis in 2011. The heterogeneous in- dustrial market segment follows overall economic trends in its general development. The development work in the product categories goes hand in hand with the trends in the individual market segments. This means that smaller turbopumps and analysis instru- ments are more likely to be required in the analytical industry, which tends to respond on an early-cyclical basis. Large quantities of backing pumps are em- ployed in the semiconductor market, but also in other industries whose developments generally conform to those in mechanical engineering.

Pfeiffer Vacuum Technology AG – Annual Report 2017 83 In order to combat the risks stemming from depen- dence upon individual market segments and prod- ucts, Pfeiffer Vacuum places a great deal of value on its broad based alignment. At the same time, a disproportionately high share of revenue derives from the semiconductor industry, which presents both an opportunity as well as a risk due to the cyclical nature of this industry’s development. Pfeiffer Vacuum’s strategy for lowering this risk is to increasingly market products in other industries through our distribution channels, thus lowering the share of total revenues accounted for by the semiconductor industry. Current studies on the semiconductor industry show that this market will grow strongly beyond the cycles. Acquisition and integration (risk class: low) The integration of companies into the purchaser’s corporate group always poses a special challenge. In order to preclude as far as possible the risk that the expectations which are placed upon the acquisition might not fully materialize, we conduct detailed due diligence reviews in advance of a corporate acquisi- tion. Analyzed in particular in this connection are the legal situation, technical equipment, production planning, and the current and expected ﬁnancial position of the Company to be acquired. To minimize legal and ﬁnancial risks in particular, we draw upon the counsel of reputable law ﬁrms and tax advisors with substantial experience of acquisitions on this scale during the period of preparing and realizing the acquisition. Taken as a whole, these measures ensure that all aspects of a corporate acquisition are taken into consideration, and enable conclusions to be drawn regarding the potential synergies that will result from an acquisition. This signiﬁcantly reduces the risk of unanticipated developments. However, this risk can never be entirely excluded because a successful acquisition depends upon many other additional factors. This also applies for the integration which follows after acquisition. To restrict integration-related risks, proven Pfeiffer Vacuum guidelines, which ensure structured and successful business operations, are implemented within newly acquired companies. Directly after acquisition, newly acquired companies are also in- tegrated into the reporting system in the Pfeiffer Vacuum Group to allow targeted management of the individual companies. Besides extensive report- ing, this also includes monthly conference calls and regular meetings on site in the countries concerned. The standardized risk management system is also put in place in all new Group companies. The risk of intransparency is therefore eliminated in this way. This approach was taken for all acquisitions made in 2017. Technology (risk class: medium) Products and services that do not meet customer expectations lead directly to declining sales, and thus to a loss of market share and reputation. Therefore, the key risk factors for Pfeiffer Vacuum include a lack of innovative strength and the loss of quality of prod- ucts and services. We combat these risks through ongoing customer contact and the resulting market intimacy. The information thus obtained about the needs of our customers enables us to develop and offer products that are suited to their demands. This allows us to expand both our competitive position as well as our name recognition. We will continue to combat the risk of a lack of innovation through our development investments. In addition, maintaining high standards of quality is a top priority for us. We received certiﬁcation to ISO 9001:2008 for the ﬁrst time in 1995, and this has since been sus- tained without interruption. Purchasing and manufacturing (risk class: low) The risks in the sourcing market occur, in particular, in the form of supply bottlenecks and dependency upon individual vendors. Downtimes are viewed as a key risk from a production standpoint. We primarily combat the risk of supply bottlenecks and vendor dependence by continuously reviewing alternative supplier options. Anticipated market shortages of raw materials, such as steel and aluminum, and the price risks which these entail, are combated through long- term framework contracts. In general, however, it can be said that the effects of changes in the price of raw materials do not have any signiﬁcant inﬂuence on proﬁtability. Business interruption insurance is in force to cover the effects of downtimes resulting from ﬁre, storm or ﬂood damage, for example. Quali- ﬁed technicians and modern production machinery keep technically related downtimes to a low level. Regular servicing and preventive maintenance for our machinery and equipment also help to avoid downtimes.

84 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Risk and Opportunities Report Human resources (risk class: low) As a provider of vacuum solutions, i. e. a subset of mechanical engineering, we are dependent upon the high level of education, training and commitment of our employees. We use various measures to combat the risk of losing these people and/or insufﬁcient recruiting possibilities for suitable new talent. An attrition rate that continues to be low documents the acceptance of this on the part of our people. Information technology (risk class: low) Because our business processes are mapped by means of software support, Pfeiffer Vacuum’s cor- porate data is subject to a general information technology risk. This includes, ﬁrst and foremost, the risks of system outages, data losses, virus or hacker attacks that could lead to an interruption of business operations. We keep the risk of data losses to a minimum by performing daily backups of our complete enterprise data. Our enterprise database, in particular, with which manufacturing operations, materials manage- ment, order handling, ﬁnancial and cost accounting are handled, is subject to a high security standard. All ﬁles created by our employees within the server environment are also backed up on a daily basis. Our backup tapes are stored in secure, ﬁre-proof locations. The activities of our in-house support team reduce system outages to a low level. The Company also uses regularly updated virus scanners and modern ﬁrewalls to protect its hardware and soft- ware against the risk of computer viruses and hacking. Exchange rates (risk class: low) As a result of our pronounced international operations and the high percentage of export business that this involves, we are subject to a foreign exchange risk. A distinction must be made with respect to the way foreign exchange risks are controlled; the Company conducts active currency management for all intra- group sales invoiced in U.S. dollars or Korean won. In order to minimize the impact of exchange rates on future sales of this kind, we enter into forward exchange contracts and options for the aforemen- tioned currencies. Moreover, there is a valuation risk in some companies at the close of the ﬁscal year that stems from intercompany accounts receivable denominated in foreign currencies. Both gains and losses from realized options and futures contracts, as well as the valuation results stemming from ac- counts receivable denominated in foreign currencies, can be controlled to a certain extent. These are re- ﬂected in the Consolidated Statements of Income. In addition to this, the Consolidated Statements of Income also include the income and expenses of non-German subsidiaries that do not report in euros and must therefore ﬁrst be converted into euros. The line items in the Statements of Income are converted into euros at the annual average exchange rate and then adjusted for intercompany sales and services. Preliminarily leaving selling and general administra- tive costs out of consideration, the Company‘s sales are listed in the foreign currency with corresponding manufacturing costs listed predominantly in euros. Sales invoiced in U.S. dollars, for example, are sub- ject to a foreign exchange risk (currency risk) while manufacturing costs are mainly incurred in euros and are not inﬂuenced by exchange rate ﬂuctuations. The magnitude of sales and gross proﬁt are therefore inﬂuenced directly by the exchange rate and are externally stipulated and non-hedgeable. A certain degree of compensation for this effect results from the fact that the subsidiaries outside of the eurozone record their own selling and general administrative costs, which change counter to sales (natural hedge). As a function of the development of the euro relative to the respective foreign currency – there can be both positive as well as negative effects on sales and operating proﬁt. Ultimately, this situation has not changed, even with the acquisitions made in the USA in 2017. Although manufacturing costs are now incurred in U.S. dollars to a greater extent, the sales activities of these subsidiaries almost exclusively take place within the U.S. As a result, currency im- pacts on sales and manufacturing costs largely off- set each other by means of a natural hedge and thus do not present an increased currency risk overall. Liquidity position (risk class: low) The risk of a customer’s insolvency always exists, independently of the economic situation (default risk). There are general liquidity risks of being unable to satisfy required payment obligations in a timely manner. The rigorous system of accounts receivable management that has long been practiced at Pfeiffer Vacuum, along with monitoring of our customers’ payment patterns, minimizes creditworthiness risks

Pfeiffer Vacuum Technology AG – Annual Report 2017 85 documents of the offer, among other things, is that the conclusion of a proﬁt and loss transfer or domi- nation agreement between the Busch Group and Pfeiffer Vacuum is to be considered after the suc- cessful consummation of the offer. The conclusion of such a contract would result in the loss of Pfeiffer Vacuum’s independence. After completion of the takeover offer, there have been no new ﬁndings. Possible consequences resulting from the share- holdings can therefore still not be conclusively as- sessed. Opportunities Macroeconomic and sector-speciﬁc opportunities The global economic development in the past ﬁscal year was marked by moderate growth. The Chinese economy recorded growth rates at a higher than average level. Positive growth trends are anticipated in the United States, which will also improve our position here. Being well placed here gives us the opportunity to lock into this trend as well. A similar situation applies for Germany too, where an eco- nomic stabilization is currently anticipated for 2018. The cyclical nature of the semiconductor industry, which has been referred to a number of times, is both an opportunity and a risk. Technology Through its many years of experience, Pfeiffer Vacuum is highly successful in developing viable, high-quality products and bringing them to market. The founda- tion for this consists of our close collaboration with our customers in a spirit of trust, which enables us to anticipate their needs and thus gain a head start over our competitors. With innovative products and by steadily broadening our product portfolio, there are opportunities for better satisfying the demands of existing markets and generating opportunities for additional sales volumes by gaining market shares. This enables us to offer our customers a broader spectrum of products. The most recent acquisitions and thus accounts receivable losses. Moreover, our dependence upon individual customers is limited. After long-term ﬁnancial liabilities were repaid in full in 2016, the Company again took on ﬁnancial liabili- ties with the acquisition of Nor-Cal Products Holdings, Inc., Yreka, USA. Unchanged from previous years, with a drawdown of € 60.3 million (equivalent to a share of 10.9 % of the balance sheet total) and liquid assets of € 97.4 million, there exists no debt on a net basis, however. This means that there continue to be sufﬁcient reserves to assure the survival of the Company, even in difﬁcult economic times. Our operative business generates sufﬁcient liquid assets to enable the Company to continue to grow from within. Legal risks (risk class: low) As a result of Pfeiffer Vacuum’s international business operations, the Company is subject to a variety of legal risks. National and international contract law and taxation are of particular signiﬁcance in this connection. These areas can have a direct bearing on the Company’s earnings and ﬁnancial position. Standardized terms and conditions of contract and business are always employed to minimize the risk stemming from contracts entered into for products and services. In the case of special contracts, the contract instrument is ﬁrst reviewed in-house and then by external legal counsel, if necessary. The expertise required for assessing the Company’s daily business is provided by our qualiﬁed staff. We draw upon the assistance of external tax advisors in connection with complex issues that relate to national and international taxation. Product liability risks are covered by appropriate insurance. No legal disputes are currently pending whose outcome could have a material impact on the Company’s earnings or ﬁnancial position. Takeover risks (risk class: low) After completion of two voluntary public takeover offers to the shareholders of Pfeiffer Vacuum Techno- logy AG for the acquisition of all shares of Pfeiffer Vacuum Technology AG and as a result of shares acquired on the stock exchange following the second takeover offer, Pangea GmbH, Maulburg, Germany owns 38.96 % of the shares of Pfeiffer Vacuum Tech- nology AG as of December 31, 2017 according to own statements. Pangea GmbH is a legally independent entity of the family-run Busch Group. Stated in the

86 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Risk and Opportunities Report | Subsequent Events | Outlook and the administration of an internationally operating, publicly traded Corporate Group necessitate a highly qualiﬁed and motivated workforce. We therefore utilize the opportunity of assuring the long-term loyalty of the Company’s existing talent while simultaneously being an attractive employer for new people. Attractive pay concepts have been in place for years at Pfeiffer Vacuum. We therefore view ourselves as being well equipped to cover our future needs for qualiﬁed skilled labor and university graduates in the future and to assure the loyalty of our talent to the Company – both are absolute pre- requisites for the Company’s successful further development. General comments on the risk management system and the presentation of the risk and opportunities situation We are of the opinion that the risk management system is suitable for identifying, analyzing, and quantifying existing risks in order to adequately steer them. Our auditor has reviewed the risk management system that is in place in connection with the audit of the Consolidated Financial State- ments. This review did not result in any objections. Despite the number of risks disclosed being higher than the number of identiﬁed opportunities, Pfeiffer Vacuum considers the allocation of risks and oppor- tunities as balanced overall. This particularly applies as the Group’s economic success is based on a broad number of products for various industries. As those industries vary in terms of structure and economic cycles, this diversiﬁcation contributes to a risk reduction. No risks are identiﬁable that could endanger the Company’s survival, neither for the year covered by this Report nor for the following years. Rating Pfeiffer Vacuum Technology AG is not subject to any ofﬁcial rating by Moody’s, Standard & Poor’s or similar agencies. in 2017 have also expanded the product portfolio in the areas of component business, service, and leak detection systems. Sales One of the Company’s key competitive advantages has always been its lack of dependence upon indi- vidual regions, products or markets. We therefore view the expansion of our sales and marketing net- work as representing an opportunity to increase our market share. The globally active sales teams are interlinked, and uniform Pfeiffer Vacuum sales rules have been put in place. Regular training is also given on the permanently expanding spectrum of products, to enable sales staff to make use of opportunities for increasing sales to existing and prospective customers. Production and logistics Through the optimization of our production and logistics processes, we have laid the foundation in recent ﬁscal years for further improving our proﬁt- ability. We therefore see this as an opportunity for being even faster in offering high-quality solutions to our customers in future as well. We have rigorously aligned the ﬂows of materials in manufacturing to- wards our modern logistics processes. Reorganizing and fundamentally modernizing manufacturing operations led to additional productivity gains. As a solutions provider, we focus squarely on the needs of our customers. And through the reorganization of our manufacturing process, we are now being guided even more by the needs of our customers rather than by rigid planning dictates. Moreover, a cutting-edge warehouse system and a standardized system of product shipping increase efﬁciency. We are conﬁdent that the interplay between these modernization measures will help us to reduce throughput times in the future. Pfeiffer Vacuum has a total of three major production sites in Asslar, Göttingen, and Annecy. Furthermore, as part of the Nor-Cal acquisition, a larger production site in Yreka, California, U.S. has been added. Further production sites are located in Cluj, Romania, Ho Chi Minh City, Vietnam, in Indianapolis, Indiana, U.S. and in Asan, South Korea. Human resources The development of viable new products, the on- going improvement of our existing product portfolio, the high level of precision of the production pro- cesses, the sale and distribution of our products in a technologically challenging competitive environment,

Pfeiffer Vacuum Technology AG – Annual Report 2017 87 Subsequent Events With regard to the strategy supporting a three year investment plan as decided by the Management and Supervisory Boards please refer to the related remarks in the Outlook. There were no signiﬁcant changes in the sector environment since the beginning of the 2018 ﬁscal year. Outlook General economic development Based on 3.7 % in 2017, the International Monetary Fund (IMF) expects moderately higher global eco- nomic growth of 3.9 % for 2018. For the emerging and developing countries as a whole, slightly higher growth is predicted, despite the forecasted growth slowdown in China. On a global scale, hopes are pinned on India and for 2018 also on Brazil and Mexico. With growth of 1.7 %, Russia is forecasted to grow at about the same level as the previous year. For industrialized countries, a growth of 2.3 % is expected, which is in line with the growth rate of 2017. At the same time, an improved growth dynamic is assumed for the U.S., which will be compensated by a somewhat more restrained development in Europe. The IMF sees a growth rate of 2.7 %, in particular, for the U.S. (previous year: 2.3 %) and for Europe 2.2 % (previous year: 2.4 %). For 2018, the IMF also expects a slightly lower growth rate in the price-adjusted gross domestic product of 2.3 % for Germany. Mechanical engineering The German Engineering Federation (VDMA) expects another strong growth of production in mechanical engineering in 2018 at the previous year’s level of 3 %. At the beginning of 2018, capacity utilization in the domestic mechanical engineering industry was 87.9 %, well above the long-term industry average. The production curve shows a similar upward trend. Bottlenecks on machinery and systems are expected during the course of the year. The dynamism of the economy in the European mechanical engineering industry will continue with a focus on the core countries Germany and France. For the US market, which is the industry’s most important market, capital expenditures increased even further compared to 7 % in the previous year. The political developments and initial measures of the America First Policy and export tariffs limit a dis- proportionate development of exports to the United States. For the sales of machines in the Chinese market, a deceleration is expected compared to the previous year’s increase of 24.2 %, which appears acceptable due to the trading volumes. For 2018, the VDMA expects growth to continue in the single- digit range. As a whole, the industry’s assessment is at a record level in terms of the overall economic situation and business development. Since the ﬁnal quarter of 2017, the OECD leading indicator points to growth for the development of mechanical engineering in the EU. Corresponding forecasts show an identical picture for the development of production. Currently, the indicator shows a clearly positive development for the coming months at a value of 100.6. In the previous year, the comparative value was 100.4. Order intake in the vacuum technology ﬁeld in- creased by 1 % in real terms in the last quarter of 2017 compared to the previous year. This represents an increase of 3 percentage points compared to the development of the previous year. Overall, the fore- casts for the mechanical engineering industry show another positive development of the high order and sales situation. Development on the markets Pfeiffer Vacuum divides its customers into the semi- conductor, industrial, analytics, research & develop- ment and coating markets. Although the semicon- ductor market segment is generally considered to be cyclical, it has experienced a recovery since 2015, which reached a temporary high in 2017 with pronounced demand dynamics. Signals from the market and our key customers continue to suggest that this dynamics will continue beyond 2017, at least in the ﬁrst half of 2018. There are unchanged good opportunities for the future: Pfeiffer Vacuum strongly believes that the demand for products from the semiconductor industry will generally grow at an above-average rate in view of the increasing

88 M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S Outlook complexity of digital innovations in almost all areas of daily life, even if this development is typically characterized by a strong cyclical nature. In the industry market segment, order growth is mainly driven by new product developments and the general trend towards energy efﬁciency and resource conservation. Unchanged from previous years, Pfeiffer Vacuum also expects a comparatively stable growth trend here in the medium term. For the analytics market segment, Pfeiffer Vacuum expects moderate growth from the already high level of 2017. Analytical instruments are used in research and quality assurance activities in general industry and, particularly, in the semiconductor sector. The research & development market segment is dependent on political decisions concerning the funding of projects and research institutions. Here, we also estimate that sales will grow slightly in 2018. The coating market segment includes customers in the ﬁelds of displays (LED, OLED), architectural glass, solar and many other areas of surface ﬁnishing. Demand in this sector has clearly gained momentum in 2017 and, according to our estimates, will show further sales improvement in 2018. Sales development in 2018 Improved sales to customers in the semiconductor and coating industries combined with the company acquisitions made in the 2017 reporting year were the main drivers of revenue growth of 23.8 % to € 587.0 million in 2017. The sustained high demand throughout the year, in particular, from the semicon- ductor industry, was not expected at the beginning of 2017. So far, there are customer-speciﬁc and industry-speciﬁc signs of a continued strong level, at least in the ﬁrst half of 2018. The visibility of orders remains unchanged at about two months. Following the Nor-Cal acquisition in mid-2017, this acquisition in 2018 will also be fully reﬂected in the sales volume. For these reasons, and also in view of the outlined macroeconomic growth forecasts – both for the global economy and the engineering sector – Pfeiffer Vacuum expects a noticeable increase in sales for the entire year of 2018. However, this will be less pronounced than was the case in 2017 with a partly acquisition impacted increase of 23.8 %. Earnings development Continued optimization measures and the economies of scale resulting from the expected sales improve- ment as well as the disappearance of one-time ex- penses should contribute to a noticeable improve- ment in the operating results and the operating margin in 2018. However, this is offset by the PPA effects, which will also have an impact on the entire 2018 ﬁscal year. Financial expenses will increase as a result of borrowings related to the Nor-Cal acquisi- tion. Never theless, due to the low level of interest rates, we expect the development of earnings be- fore taxes to be largely in line with the development of the operating results. The Management Board and Supervisory Board have additionally decided on a new strategy, supporting a three year investment plan, providing for signiﬁcantly increased annual investments, with a total volume of € 150.0 million. A materially higher share of the proﬁts will be used to ﬁnance further growth in order to strengthen the technological leadership and competitiveness of Pfeiffer Vacuum. These include, in particular invest- ments in the expansion and modernization of pro- duction capacities, intensiﬁcation of research and development, fostering of industry 4.0 efforts as well as the expansion of the Group’s global footprint in Asia as a whole and China in particular. The invest- ments included in the total volume which are cur- rently planned for 2018 amount to some € 40.0 mil- lion for the entire Group.

Pfeiffer Vacuum Technology AG – Annual Report 2017 89 Dividend Forward-looking statements Management and Supervisory Boards propose to pay out a dividend of € 2.00 per share for the ﬁscal year 2017 (previous year: € 3.60 per share). With a distribution volume of some € 19.7 million, this would result in 36.6 % of the net proﬁt of the Group being paid out to shareholders. DIVIDEND FIGURES Payout ratio 1 Dividend per share Dividend yield in % in € in % 2017 2016 36.6 2.00 2 1.3 2 75.5 3.60 4.1 1 (Proposed) dividend distribution in relation to the net income for that year 2 Subject to approval by the Supervisory Board and the Annual General Meeting The statements, estimations and other information in this outlook are based upon assumptions about future overall economy and industry-speciﬁc devel- opments. The assumptions are based upon the latest information available at the time of publication. Due to the inherent risks and uncertainties relating to the probability of the statements and estimations made here, actual developments may differ signiﬁcantly. Pfeiffer Vacuum will also remain a highly proﬁtable Company in 2018. For the current 2018 ﬁscal year, we see a positive development in the proﬁtability, ﬁnancial position and liquidity of the Group. Overall, we are conﬁdent that we will be able to achieve this goal on the basis of the business development in 2017, the acquisitions that have been carried out and the thereby strengthened strategic focus on clearly deﬁned target markets, as well as the current dis- cussions with our customers. Our well-trained, motivated employees remain an indispensable pre- requisite for this.

90 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Consolidated Statements of Income | Consolidated Statements of Comprehensive Income CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Income Pfeiffer Vacuum Technology AG in K € Net sales Cost of sales Gross proﬁt Selling and marketing expenses General and administrative expenses Research and development expenses Other operating income Other operating expenses Operating proﬁt Financial expenses Financial income Earnings before taxes Income taxes Net income Earnings per share (in €): Basic Diluted Note 31 7, 15 7 7 7 8 8 31 9, 32 9, 13, 32 24, 31 2017 2016 586,962 – 376,945 210,017 – 63,313 – 48,976 -– 27,763 10,345 – 8,924 71,386 – 693 347 71,040 474,244 – 293,769 180,475 – 55,330 – 35,733 – 26,282 10,818 – 5,972 67,976 – 662 301 67,615 24 – 17,192 – 20,583 53,848 47,032 34 34 5.46 5.46 4.77 4.77

Pfeiffer Vacuum Technology AG – Annual Report 2017 91 Consolidated Statements of Comprehensive Income Pfeiffer Vacuum Technology AG in K € Net income Other comprehensive income Amounts to be reclassiﬁed to income statement in future periods (if applicable) Currency changes Results from cash ﬂow hedges Related deferred income tax effects Amounts not to be reclassiﬁed to income statement in future periods Valuation of deﬁned beneﬁt plans Related deferred income tax effects Other comprehensive income net of tax Total comprehensive income net of tax Note 2017 2016 53,848 47,032 21 21, 32 21 21, 25 21 – 13,252 588 – 176 – 12,840 394 – 515 – 121 – 12,961 40,887 673 – 588 176 261 – 7,023 1,857 – 5,166 – 4,905 42,127

92 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Consolidated Balance Sheets | Consolidated Statements of Shareholders’ Equity Consolidated Balance Sheets Pfeiffer Vacuum Technology AG in K € ASSETS Intangible assets Property, plant and equipment Investment properties Shares in associated companies Other ﬁnancial assets Deferred tax assets Total non-current assets Inventories Trade accounts receivable Income tax receivables Prepaid expenses Other accounts receivable Cash and cash equivalents Total current assets Total assets SHAREHOLDERS’ EQUITY AND LIABILITIES Share capital Additional paid-in capital Retained earnings Other equity components Equity of Pfeiffer Vacuum Technology AG shareholders Financial liabilities Provisions for pensions Deferred tax liabilities Total non-current liabilities Trade accounts payable Customer deposits Other accounts payable Provisions Income tax liabilities Financial liabilities Total current liabilities Total shareholders’ equity and liabilities Note Dec. 31, 2017 Dec. 31, 2016 10 11 12 13 14 24 15 16 17 18 31 19 19 20 21 23 25 24 26 27, 32 28 29 110,814 106,949 448 — 3,840 23,037 245,088 113,384 80,061 3,159 2,475 11,792 97,402 308,273 553,361 25,261 96,245 229,747 – 30,316 67,579 85,053 472 1,636 4,508 23,312 182,560 81,737 69,352 1,112 3,099 11,430 110,032 276,762 459,322 25,261 96,245 211,423 – 17,355 320,937 315,574 60,248 50,034 3,988 114,270 40,814 7,678 22,333 39,894 7,354 81 118,154 553,361 — 51,188 1,848 53,036 30,896 4,928 20,530 29,767 4,367 224 90,712 459,322

Pfeiffer Vacuum Technology AG – Annual Report 2017 93 Consolidated Statements of Shareholders’ Equity Pfeiffer Vacuum Technology AG in K € Balance as at January 1, 2016 Net income Earnings after taxes recorded directly in equity Total comprehensive income Dividend payment Balance as at December 31, 2016 Net income Earnings after taxes recorded directly in equity Total comprehensive income Dividend payment Balance as at December 31, 2017 Note Share Capital Additional Paid-in Capital Retained Earnings Other Equity Components Equity of Pfeiffer Vacuum Technology AG Shareholders 21, 32 20 21, 32 20 25,261 96,245 — — — — — — — — 25,261 96,245 — — — — — — — — 195,968 47,032 – 12,450 — 305,024 47,032 — – 4,905 – 4,905 47,032 – 31,577 211,423 53,848 – 4,905 — – 17,355 — 42,127 – 31,577 315,574 53,848 — – 12,961 – 12,961 53,848 – 35,524 – 12,961 — 40,887 – 35,524 25,261 96,245 229,747 – 30,316 320,937

94 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Consolidated Statements of Cash Flows | Remarks relating to the Company and its Accounting and Valuation Methods Consolidated Statements of Cash Flows Pfeiffer Vacuum Technology AG in K € Note 2017 2016 Cash flow from operating activities: Earnings before taxes Adjustment for ﬁnancial income/ﬁnancial expenses Financial income received Financial expenses paid Income taxes paid Depreciation/amortization Gain/loss from disposals of assets Changes in allowances for doubtful accounts Changes in inventory reserves Other non-cash income and expenses Effects of changes in assets and liabilities: Inventories Receivables and other assets Provisions, including pensions, and income tax liabilities Payables, customer deposits Net cash provided by operating activities Cash flow from investing activities: Payments for acquisitions Capital expenditures Proceeds from disposals of ﬁxed assets Net cash used in investing activities Cash flow from ﬁnancing activities: Proceeds from increase of ﬁnancial liabilities Dividend payments Redemptions of ﬁnancial liabilities Net cash provided by/used in ﬁnancing activities Effects of foreign exchange rate changes on cash and cash equivalents Net changes in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 31 10, 11, 12, 31 16 15 6 10, 11, 12, 31 20 71,040 346 350 – 1,053 – 17,441 20,824 – 31 528 2,702 116 – 15,248 – 7,005 5,983 10,285 71,397 – 74,594 – 27,678 249 -102,023 70,000 – 35,524 – 15,182 19,294 67,615 361 227 – 1,020 – 17,165 20,421 – 58 129 2,180 321 – 5,960 – 9,768 – 1,147 7,480 63,616 — – 18,018 574 – 17,444 — – 31,577 – 20,503 – 52,080 – 1,298 543 – 12,630 110,032 – 5,365 115,397 18 97,402 110,032

Pfeiffer Vacuum Technology AG – Annual Report 2017 95 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Remarks relating to the Company and its Accounting and Valuation Methods 1. General remarks relating to the Company The parent company within the Pfeiffer Vacuum Group (“the Com- pany” or “Pfeiffer Vacuum”) is Pfeiffer Vacuum Technology AG, domiciled at Berliner Strasse 43, 35614 Asslar, Germany. Pfeiffer Vacuum Technology AG is a stock corporation organized under German law and recorded in the Register of Companies at the Local Court of Wetzlar under Number HRB 44. The Company is listed in the Prime Standard of Deutsche Börse Stock Exchange in Frankfurt am Main, Germany, where it is included in the Tec- DAX index. Pfeiffer Vacuum is one of the leading full-line vacuum technology manufacturers, offering custom solutions for a wide range of needs in connection with the generation, control, and measurement of vacuum. The products developed and manufactured at the Com- pany’s production facilities in Asslar and Göttingen, Germany, as well as in Annecy, France and Asan, Republic of Korea, Indianapolis and Yreka in the United States, and Ho-Chi-Minh-City, Vietnam, include turbopumps, a range of backing pumps, such as rotary vane, Roots and dry pumps, complete pumping stations, as well as custom vacuum systems, leak detectors and components. Pfeiffer Vacuum markets and distributes its products through its own network of sales companies and independent marketing agents. Moreover, there are service support centers in all major industrial locations throughout the world. The Company’s primary markets are located in Europe, the United States, and Asia. 2. Basis for preparing Consolidated Financial Statements Statement of compliance with IFRS The Consolidated Financial Statements of Pfeiffer Vacuum Techno- logy AG for the ﬁscal year from January 1 to December 31, 2017, have been prepared in accordance with International Financial Reporting Standards (IFRS) and the interpretations of the IFRS Interpretations Committee (IFRS IC) as applicable in the European Union (EU). This includes the International Accounting Standards (IAS), which continue to retain their validity, the interpretations of the Standing Interpretations Committee (SIC) and the interpreta- tions of the International Financial Reporting Interpretations Com- mittee (IFRIC). Those standards that have been published but whose application is not yet mandatory have not been adopted at an earlier stage. The Notes to the Consolidated Financial Statements additionally include the information required by § 315e, Sub-Para. 1, of the German Commercial Code (“HGB”). Basic valuation principles The Consolidated Financial Statements are prepared essentially in accordance with the acquisition cost principle. However, this does not include derivative ﬁnancial instruments, which are carried at fair values. Pfeiffer Vacuum prepares its Consolidated Financial Statements in euros (€). Unless otherwise indicated, the presen- tation is in thousands of euros (K €). For mathematical reasons, the numbers presented in the Consolidated Financial Statements may include rounding differences. Consolidated companies and principles of consolidation All companies which Pfeiffer Vacuum directly or indirectly controls are consolidated. The Company is considered to control an entity if it is exposed to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Associated companies are accounted for using the equity method. Companies are considered to be associated if Pfeiffer Vacuum Group has signiﬁcant inﬂuence. Signiﬁcant inﬂuence is the possibility to participate in ﬁnancial or operational decisions but excluding con- trol or joint decisions.

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96 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Remarks relating to the Company and its Accounting and Valuation Methods Inclusion in the Consolidated Financial Statements is made on the basis of individual ﬁnancial statements prepared in accordance with consistent accounting and valuation principles. The balance sheet date of the individual ﬁnancial statements of the included companies is the same as the balance sheet date of the Consoli- dated Financial Statements. There were no investments in joint ventures or joint operations as at December 31, 2017, or in previous years. Nor were there any investments in unconsolidated structured entities. Consolidation of investments is effected at the acquisition date in accordance with the acquisition method. In this connection, all assets (including, if applicable, intangible assets to be recognized additionally) and liabilities are ﬁrst valued at their attributable fair values. The acquisition costs of the equity investment, i.e. the total compensation transferred, valued in accordance with attributable fair values, are then offset against the acquired, newly valued share- holders’ equity. Any resulting positive difference is recognized as goodwill and written down in future periods only in the event of an impairment (impairment-only approach). All intercompany receivables and liabilities, gains and losses, revenues and expenses are eliminated in connection with the consolidation process. Foreign currency translation The annual ﬁnancial statements of subsidiaries domiciled outside the European Currency Union have been translated into euros (€) in accordance with IAS 21, „The Effects of Changes in Foreign Exchange Rates”. Each company within the Corporate Group stipulates its own functional currency. The functional currency of the subsidiaries is the respective local currency. When translating ﬁnancial statements presented in foreign functional currencies, year-end exchange rates are applied to assets and liabilities, while average annual exchange rates are applied to income statement accounts. The resulting translation adjustments are recorded in other equity components. In the consolidated ﬁnancial statements, foreign-currency trans- action gains and losses from regular operations of consolidated companies are recorded as other operating income and expenses in the income statement. 3. Application of amended or new standards The accounting and valuation principles used are essentially the same as those used the year before. In variance thereto, in 2017 the Company has applied the following new or amended IASB announcements that have been endorsed by the European Union (EU) for the ﬁrst time, as application was mandatory. NEW ANNOUNCEMENTS Amendments to IAS 7: Disclosure Initiative Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses 1 Fiscal years beginning on or after the indicated date according to EU regulation Issued by IASB/IFRS IC Applicability 1 January 2016 January 2016 January 1, 2017 January 1, 2017 First-time application of IASB announcements did not impact the Consolidated Financial Statements. First-time application of „Amendments to IAS 7” caused additional disclosures in the Notes.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 97 The following standards were endorsed by the EU but were not yet mandatorily applicable. Pfeiffer Vacuum will apply these standards beginning in ﬁscal years, for which application is mandatory in the EU. NEW ANNOUNCEMENTS Issued by IASB/IFRS IC Applicability 1 Amendments to IAS 40: Transfers of Investment Property Amendments to IFRS 2: Classiﬁcation and Measurement of Share-based Payment Transactions December 2016 January 1, 2018 June 2016 January 1, 2018 Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts September 2016 January 1, 2018 Annual Improvements to IFRSs 2014 – 2016 Cycle IFRS 9 Financial Instruments IFRS 15 Revenue from Contracts with Customers (including amendments to IFRS 15: Effective date of IFRS 15) Clariﬁcations to IFRS 15 Revenue from Contracts with Customers IFRS 16 Leases 1 Fiscal years beginning on or after the indicated date according to EU regulation December 2016 January 1, 2018 July 2014 May 2014 April 2016 January 1, 2018 January 1, 2018 January 1, 2018 January 2016 January 1, 2019 „Amendments to IAS 40”, „Amendments to IFRS 2”, „Amendments to IFRS 4“ and the „Annual Improvements to IFRSs 2014–2016 Cycle“ are not relevant for Pfeiffer Vacuum. In July 2014 the IASB published the ﬁnal version of IFRS 9 „Financial Instruments“ which was endorsed by the EU in November 2016. The new IFRS 9 will replace the existing rules of IAS 39 „Financial Instruments: Recognition and Measurement“. Mandatory applica- tion in ﬁscal year 2018 will not have any material impact on Pfeiffer Vacuum’s Consolidated Financial Statements. In May 2014 the IASB published IFRS 15 „Revenue from Contracts with Customers“ which was endorsed by the EU in October 2016. In April 2016 the IASB published „Clariﬁcations to IFRS 15 Revenue from Contracts with Customers“ which were endorsed by the EU in November 2017. New IFRS 15 will replace IAS 11 „Construction Contracts“, IAS 18 „Revenue“ and the related interpretations. Mandatory application of IFRS 15 in ﬁscal year 2018 will have the following impacts on Pfeiffer Vacuum’s Consolidated Financial Statements: ¡ To some extend product sales including extended warranty pledges will be subject to delayed sales recognition in future periods. The ﬁrst-time application date is January 1, 2018, as Pfeiffer Vacuum decided to apply the modiﬁed retrospective method. As of this date, there are no adjustment impacts to be expected with regard to the warranty pledges because all sales revenues from the related customer contracts have either been fully recognized until January 1, 2018 or will have to be fully recognized after this date. ¡ Range and level of details of related Notes disclosures will increase following the ﬁrst-time application of IFRS 15 in ﬁscal 2018. In January 2016 the IASB published IFRS 16 „Leases“ which was endorsed by the EU in November 2017. New IFRS 16 will replace IAS 17 „Leases “and the related interpretations. These new rules for accounting of leases will be mandatorily applicable for ﬁscal years beginning on or after January 1, 2019. First time application generally has to be effected retrospectively, but with a number of simpliﬁcation rules available. An early adoption is permitted in case IFRS 15 is adopted, too. The option to voluntarily apply this stan- dard ahead of time will not be utilized. The impact of ﬁrst-time adoption of IFRS 16 in the Consolidated Financial Statements is currently being analyzed. A reliable estimate of quantitative impact cannot be made before the ﬁnalization of the ongoing project.

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98 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Remarks relating to the Company and its Accounting and Valuation Methods Based on the current conclusions Pfeiffer Vacuum expects the following qualitative changes in the Consolidated Financial State- ments: ¡ While to date payment obligations from operating leases had to be disclosed in the Notes, the resulting rights-of-use and payment obligations in future will have to be recorded as usage right-of-use assets and lease liabilities in the balance sheet (so- called right-of-use approach). ¡ Pfeiffer Vacuum expects that the ﬁrst-time application of this right-of-use approach as of the mandatory date will slightly increase the balance sheet total due to the increase in lease liabilities and a similar increase in ﬁxed assets due the capital- ized usage rights. ¡ The Consolidated Statements of Income will include amortiza- tion expenses as well as interest expenses instead of leasing expenses. The following announcements were issued by the IASB or the IFRS IC but not yet endorsed by the EU: NEW ANNOUNCEMENTS IFRS 17 Insurance Contracts IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration IFRIC Interpretation 23 Uncertainty over Income Tax Treatments Amendments to IFRS 9: Prepayment Features with Negative Compensation Amendments to IAS 19: Plan Amendment, Curtailment or Settlement Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures Annual Improvements to IFRSs 2015 – 2017 Cycle Pfeiffer Vacuum intends apply the announcements mentioned above as of the effective date of mandatory application within the EU. The impact on the Consolidated Financial Statements resulting from the application of these not yet endorsed announcements are currently being analyzed. 4. Accounting and valuation methods Income recognition Sales are recognized when the material risks and rewards relating to the ownership of the products sold passes to the purchaser, which is essentially the case when the goods are shipped. Should product sales be subject to customer acceptance, revenues are not recognized until customer acceptance has occurred. Service revenues are recognized when the underlying services are per- formed. These revenues include the invoiced working hours of the service personnel, as well as spare parts and replacement products. Rebates are recorded as a reduction of sales. Interest income is recorded when the interest originates. Rental income from investment properties is recorded on a straight-line basis over the term of the leases. Issued by IASB/IFRS IC Applicability May 2017 January 1, 2021 Dezember 2016 January 1, 2018 June 2017 January 1, 2019 October 2017 January 1, 2019 February 2018 January 1, 2019 October 2017 January 1, 2019 December 2017 January 1, 2019 Cost of Sales Cost of sales include the manufacturing costs for the products sold as well as the costs for the services rendered. This includes all directly attributable material and production costs as well as indirect costs including depreciation/amortization on production buildings and machines. In addition, freight costs, expenses for inventory valuation, and warranty expenses are included in here. Based on historical experience, warranty provisions for recognized revenues are recorded as at year-end. Research and development expenses Research and development costs are generally expensed as in- curred. Development costs are capitalized, if the capitalization prerequisites in IAS 38, “Intangible Assets,” are fully satisﬁed. In ﬁscal years 2017 and 2016 research and development costs were not capitalized.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 99 At least once a year, the Company reviews goodwill for possible impairments. For the purpose of the impairment test, goodwill acquired within the context of a corporate merger is allocated at the acquisition date to those cash generating units of the Corpo- rate Group that can be expected to be able to beneﬁt from the corporate merger. This review is always made whenever events or changes in circumstances suggest that the carrying amount may not be recoverable. In this case, the above described process for impairments under IAS 36, “Impairment of Assets,” is applied. Any resulting impairment loss is recorded in the income statement. A reversal of goodwill impairment losses in future periods is not permissible. A ﬁxed or intangible asset is derecognized either at the time of disposal or at such time as no economic beneﬁt can any longer be expected from the further utilization or sale of the asset. Gains and losses from disposals of assets are determined and recorded in the income statement on the basis of the difference between selling costs and carrying amount, less any directly attributable selling costs, where applicable. Investment properties Real estate properties are allocated to the portfolio of investment properties if they are held for the purpose of generating rental income. They are stated at cost and depreciated on a straight-line basis over their estimated useful lives (cost model). Assessment of their residual values, useful lives and depreciation methods, as well as any impairment losses, is performed analogously to the procedure described in connection with property, plant and equip- ment. Investment properties are derecognized upon disposal or when they are no longer being permanently used and they are no longer expected to produce any further future economic beneﬁt. Property, plant and equipment and intangible assets Property, plant and equipment and intangible assets are stated at cost and depreciated/amortized on a straight-line basis over the customary useful lives of the assets. At the close of each ﬁscal year, the useful lives and depreciation/amortization methods, as well as the residual values in the case of property, plant and equip- ment, are reviewed and adjusted where necessary. The following useful lives are assumed: ESTIMATED USEFUL LIFE Production halls, production and administration buildings and similar facilities Machinery and equipment (including IT equipment) Intangible Assets 1 20 – 40 years 3 – 15 years 2 – 5 years 1 With the exception of goodwill and a trademark recognized in connection with a pur- chase price allocation, there are no intangible assets with indeﬁnite useful lives. Scheduled depreciation and amortization are allocated to the expense lines in the income statement on the basis of the input involved. Repair and maintenance costs are expensed as incurred. The Company reviews long-lived assets for impairment whenever events or changes in circumstances suggest that the carrying amount of an asset may not be recoverable. Should impairment indicators exist, the Company performs the analyses required under IAS 36, “Impairment of Assets,” with the carrying amount of the asset being compared to the recoverable amount. The recoverable amount of an asset or a cash-generating unit is the greater of the fair value less its selling costs and value in use. The resulting amount must be determined for each individual asset, unless an asset generates cash ﬂows that are dependent upon those from other assets or other asset groups. Should the carry- ing amount of an asset be higher than its recoverable amount, the asset is viewed as being impaired and is written down to its re- coverable amount. To determine the value in use of an asset, the anticipated future cash ﬂows are discounted to their cash value, taking into consideration a before-tax discount rate that reﬂects current market expectations with respect to the interest rate effect and the speciﬁc risks of the asset in question. An appropriate valuation model is employed to determine the fair value less selling costs. This model is based on valuation multiples and other available indicators for the fair value. Any required reversals of impairment losses are recorded in future-period income statements up to the amount of the impairment loss reversal limit. This limit is deter- mined by the amount that would have resulted at the close of the respective ﬁscal year given scheduled depreciation of the asset.

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100 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Remarks relating to the Company and its Accounting and Valuation Methods Financial instruments A ﬁnancial instrument is any contract that gives rise to a ﬁnancial asset of one entity and a ﬁnancial liability or an equity instrument of another entity. Accounting for ﬁnancial instruments in the case of usual and customary purchase or sale is performed on the settle- ment date, i.e. the day on which the asset is delivered. According to IAS 39, “Financial Instruments: Recognition and Measurement,” ﬁnancial instruments are allocated to the following categories upon initial recognition: ¡ Financial assets at fair value through proﬁt and loss (ﬁnancial assets held for trading), ¡ Financial assets held-to-maturity, ¡ Loans and receivables, ¡ Financial assets available-for-sale, ¡ Financial liabilities at fair value through proﬁt and loss (ﬁnancial liabilities held for trading) and ¡ Financial liabilities measured at amortized cost. Accounts receivable, in particular trade accounts receivable, are categorized as “loans and receivables” and are measured at (amortized) cost. They typically do not bear interest. Costs of acqui- sition are recorded at the invoiced amount (including any value added tax). The Company continuously assesses the adequacy of the allowances for doubtful accounts receivable and makes ap- propriate adjustments on the basis of both speciﬁc probability and aging distribution. Any subsequent reversal is recorded in the in- come statement in an amount not to exceed its carrying amount (net of amortization or depreciation). Receivables are derecognized after all means of collection have been exhausted. The Company uses derivatives only to manage foreign currency exchange rate risks. Around 56 % (2016: 53 %) of total consolidated sales are invoiced in foreign currencies (non-euro, predominantly in U.S. dollars). The Company enters into forward exchange and option transactions to hedge its future sales invoiced in foreign currencies against exchange rate ﬂuctuations. Derivative ﬁnancial instruments are acquired exclusively for this purpose. Pfeiffer Vacuum does not engage in speculative hedging transactions. Derivative ﬁnancial instruments employed for hedging purposes are recorded at their fair values both at the time they are ﬁrst recorded as well as in subsequent periods. Derivative ﬁnancial instruments are recorded as assets if their fair value is positive and as liabilities if their fair value is negative. Changes in the fair value of these derivatives are recorded in equity without any impact on the income statement if the hedging is classiﬁed as a cash ﬂow hedge according to IAS 39 and is effective. The derivative is reclassiﬁed into other operating income and expenses as foreign exchange gains/losses at the time of realization of the underlying transaction that has been hedged. If derivatives were purchased for hedging purposes but do not formally qualify for hedging under IAS 39, they are recorded at fair value through proﬁt and loss. The fair values of derivatives are determined on the balance sheet date using current reference quotations and taking into account forward premiums and discounts. Please refer to Note 32 for further infor- mation relating to ﬁnancial instruments. Trade accounts payable are categorized as ﬁnancial liabilities and are measured at amortized cost. They are recorded at the higher of their notational value or their redemption amount at the close of the ﬁscal year, including any value added tax. Bank loans are also categorized as ﬁnancial liabilities and are measured at fair value upon ﬁrst recognition and in future periods at amortized costs using the effective interest method. This takes into consideration all components of the effective interest rate. Interest income and expenses resulting from the application of the effective interest rate method are shown under ﬁnancial results. Shares in associated companies An associate is an entity over which the Company has signiﬁcant inﬂuence. In distinguishing between signiﬁcant inﬂuence and control, the Company considers all factors categorized substantial according to judgement. Associated companies are valued in accordance with the equity method, with the book value of the company being adjusted annually by the percentage of results, dividend distributions, and other changes to shareholders’ equity. Any goodwill in connection with an associated company is included in the book value of the shareholdings, and is subjected to neither scheduled depreciation nor any special impairment test. If there are indications of an impairment, the equity investment valuation is reduced, with the change being charged to income. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, bank balances, and all highly liquid bank investments having original maturities of three months or less. Due to the short investment period, this line item is only subject to minor value ﬂuctuations. Cash and cash equivalents are deﬁned accordingly in the consolidated cash ﬂow statements.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 101 Inventories Inventories are valued at the lower of net realizable value and acquisition or manufacturing costs. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling costs. Acquisition or manufacturing costs comprise all costs for acquisi- tion or manufacturing as well as all costs incurred for bringing the inventories to their current place and to the current status. With regard to work in process and ﬁnished products, the manufacturing costs include besides directly attributable material and production costs also production related indirect costs. Removals from inven- tory are determined on a weighted average cost basis. Interests on borrowed capital are not considered as part of acquisition or manu- facturing costs for inventories. Valuation adjustments on excess inventories are determined on the basis of internal procedures in accordance with the ratio between inventory turnover and future sales or usage. Excess inventories are stocks of individual inven- tory items that exceed anticipated sales or usage. Management utilizes its judgement in forecasting sales or usage. Other accounts receivable and other assets Other accounts receivable and other assets are recorded at amortized cost and less allowances, where applicable. Non- current receivables and assets are valued using the effective interest method. Provisions Provisions are formed when the Corporate Group presently has a legal or constructive outside obligation as a result of a past event and it is likely that settlement of the obligation will lead to an out- ﬂow of economic resources and the amount of the obligation can be reliably determined. The valuation is made on the basis of the best estimate of the extent of the obligation. Pensions Valuation of pension obligations under deﬁned beneﬁt plans is based upon the projected unit credit method in accordance with IAS 19 “Employee Beneﬁts.” Actuarial gains and losses from changes in the amount of either the deﬁned beneﬁt obligation (under pension plans), the actuarial present value of earned entitle- ments (under other plans) as well as those variances between actual returns and returns calculated with the discount rate or from changes in other actuarial assumptions are recorded directly in the other equity components. The pension provision thus shows the net beneﬁt obligation resulting from the difference of the deﬁned beneﬁt obligation and the plan assets measured at fair value. Additionally, the return on plan assets is considered with the discount rate. The accounting for obligations under deﬁned bene- ﬁt plans is based upon actuarial reports calculated as per the close of the ﬁscal year. The existing pension plans are detailed in Note 25. Expenses for deﬁned contribution plans are recorded as expense in the income statement when the premium obligation is incurred. Provisions are formed only if the payment is not made in the year the premium was incurred. Other accounts payable Other accounts payable are measured at amortized costs. Thus, they are recorded at their notational value or at their higher re- demption amount at the close of the ﬁscal year, including any value added tax. Income taxes Current income taxes are stated as a liability to the extent to which they have not yet been paid. General tax risks within the Group are additionally considered. Should the amounts already paid for income taxes exceed the amount owed, the difference is stated as an asset. Calculation of the amount is based upon the tax rates and tax legislation applicable at the close of the ﬁscal year. Under IAS 12, “Income Taxes,” deferred tax assets and liabilities are formed in the consolidated and taxation ﬁnancial statements for temporary differences between the ﬁnancial statement carry- ing amounts of existing assets and liabilities and their respective tax bases or for unused tax loss carry-forwards (liability method). In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this assessment, management considers the scheduled reversal of temporary differences, projected future taxable income, and tax planning strategies. Valuation of deferred tax assets and liabilities is per- formed using the local tax rates expected to be in effect at the time of realization of the asset or satisfaction of the liability, with the tax rates applicable at the close of the ﬁscal year being employed. The effects of changes in tax laws are recognized in the results of

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102 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Remarks relating to the Company and its Accounting and Valuation Methods | Notes to the Scope of Consolidation Use of estimates The process of preparing ﬁnancial statements requires the use of estimates and assumptions on the part of the management. These estimates are based upon management’s historical experience, are veriﬁed regularly, and adjusted if necessary. Certain of the Company’s accounting policies are considered critical, as they can have a major impact on the proﬁtability, ﬁnancial position, and liquidity of the Corporate Group and necessitate signiﬁcant or complex judgement on the part of management. These estimates and assumptions could differ from the actual results. As at Decem- ber 31, 2017, based on current estimate, no judgement uncertain- ties existed that could lead to the signiﬁcant risk of the need for a material adjustment of book values in the 2018 ﬁscal year. Material forward-looking estimates and assumptions exist, among others, in estimating the cash ﬂows in connection with the good- will impairment test, with regard to the formation of pension and warranty provisions, in forecasting the useful lives of ﬁxed assets, in determining the fair values of assets identiﬁed and liabilities assumed in connection with acquisitions, or in connection with deferred tax assets. The major assumptions are detailed in the Notes relating to the individual line items of the balance sheet or in the accounting principles. With regard to the assumptions the goodwill impairment test is based on, please refer to Note 10. The parameters underlying the pension accounting are detailed in Note 25. Information concerning the estimated useful life of tan- gible and intangible assets is included in Note 4, section “Property, plant and equipment, and intangible assets”. Further details for provisions are described in Note 28 and for deferred tax assets in Note 24. operations in the period in which the new tax rates go into effect. Deferred taxes that relate to line items recorded directly under shareholders’ equity are recorded directly under equity and not in the income statement. An adjustment is recorded for deferred tax assets if it is unlikely that future tax advantages will be realized. Deferred tax assets and liabilities are offset if the entitlements and obligations relate to one and the same tax authority. Leases In accordance with IAS 17, “Leases,” leasing contracts are classiﬁed as either ﬁnance or operating leases. Pfeiffer Vacuum is only acting as a lessee in this regard. Assets that are subject to operating leases are not capitalized. Lease payments are charged to income statement in the year they are incurred. Under a ﬁnance lease, substantially all of the risks and rewards related to the leased asset are transferred. Assets that are sub- ject to a ﬁnance lease are recorded at the present value of the minimum lease payments, with a leasing liability being recorded in the same amount. The periodic lease payments are divided into principal and interest components. While the interest component is recorded as an interest expense, the principal component reduces the outstanding leasing liability. Assets recognized are either de- preciated over the term of the leasing agreement or over the estimated useful life of the respective asset. Government grants Government grants which compensate the Group for expenses (expense subsidies) are recorded in the income statement in other operating income in the same period the underlying expenses are incurred. Determination of fair value IFRS 13 “Fair Value Measurement” includes uniform regulations for fair value measurement and rules the determination of fair value in cases where other standards allow or require measurement at fair value. Pfeiffer Vacuum Group did not apply any fair value mea- surement options.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 103 Notes to the Scope of Consolidation 5. Composition of consolidated companies In addition to Pfeiffer Vacuum Technology AG, three German and 28 foreign subsidiaries are fully consolidated in the Company’s Consoli- dated Financial Statements as at December 31, 2017 (Dec. 31, 2016: two German and 18 foreign subsidiaries). PFEIFFER VACUUM GROUP AS AT DECEMBER 31, 2017 in % Pfeiffer Vacuum Technology AG Pfeiffer Vacuum GmbH Pfeiffer Vacuum Austria GmbH Pfeiffer Vacuum (Schweiz) AG Pfeiffer Vacuum (Shanghai) Co., Ltd. Pfeiffer Vacuum (India) Private Ltd. Pfeiffer Vacuum Ltd. Pfeiffer Vacuum Scandinavia AB Pfeiffer Vacuum Singapore Pte. Ltd. Pfeiffer Vacuum Taiwan Corporation Ltd. Pfeiffer Vacuum Benelux B. V. Pfeiffer Vacuum (Xi’an) Co., Ltd. Pfeiffer Vacuum Malaysia SDN. BHD. Pfeiffer Vacuum Inc. Pfeiffer Vacuum New Hampshire Realty Holdings, LLC. Advanced Test Concepts, LLC. Pfeiffer Vacuum Indiana Realty Holdings, LLC. Nor-Cal Products Holdings, Inc. Nor-Cal Products, Inc. Nor-Cal Products Viet Nam Co., Ltd. Nor-Cal Products Europe Ltd. Nor-Cal Products Korea Co., Ltd. Nor-Cal Products Asia Paciﬁc Pte. Ltd. Pfeiffer Vacuum California Realty Holdings, LLC. Pfeiffer Vacuum Holding B. V. Pfeiffer Vacuum Italia S. p. A. Pfeiffer Vacuum (India) Private Ltd. Pfeiffer Vacuum Korea Ltd. Pfeiffer Vacuum Components & Solutions GmbH Pfeiffer Vacuum SAS Pfeiffer Vacuum Romania S.r.l. Pfeiffer Vacuum Semi Korea, Ltd. Pfeiffer Vacuum Korea Ltd. Dreebit GmbH 1 Total Group holdings: 100.0% Location Holdings Germany Germany Austria Switzerland China India Great Britain Sweden Singapore Taiwan The Netherlands China Malaysia USA USA USA USA USA USA Vietnam Great Britain Republic of Korea Singapore USA The Netherlands Italy India Republic of Korea Germany France Romania Republic of Korea Republic of Korea Germany 100.0 100.0 99.4 100.0 27.0 1 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 73.0 1 75.5 1 100.0 100.0 100.0 100.0 24.5 1 100.0

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104 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Scope of Consolidation 6. Changes in consolidated companies Acquisition of Nor-Cal Group cash equivalents acquired from Nor-Cal (K € 4,033), the anticipated net cash used in connection with this corporate acquisition totaled K € 60,335. With effect from June 22, 2017, Pfeiffer Vacuum Technology AG in- directly via a US subsidiary acquired all shares of Nor-Cal Products Holdings, Inc. (Nor-Cal Inc.), Yreka, California, USA. At the same time further economically integrated but legally independent sub- sidiaries of Nor-Cal Products Holdings Inc. having their legal sites in the United States, Great Britain, the Republic of Korea, Singapore and Vietnam, were acquired. With the acquisition of these 100% shareholdings (Nor-Cal) Pfeiffer Vacuum signiﬁcantly strengthened the position in the highly attractive market for vacuum components. The fair values of Nor-Cal’s identiﬁed assets and liabilities assumed as of June 22, 2017 (acquisition date) were comprised as follows: FAIR VALUE OF ASSETS AND LIABILITIES ASSUMED in K € Assets Intangible Assets Fixed assets Inventories Receivables Cash and cash equivalents Other assets Total assets Liabilities Deferred taxes Tarde accounts payables Provisions Income tax liabilities Financial liabilities Other liabilities Total liabilities Total net assets (fair value) Goodwill Total consideration (purchase price) June 22, 2017 24,196 7,350 18,268 5,725 4,033 1,262 60,834 – 6,237 – 3,141 – 1,627 – 500 – 4,342 – 1,451 – 17,298 43,536 20,832 64,368 The gross amount of receivables assumed totaled € 5.9 million. Presumably € 0.2 million will not be collectible and were thus recorded with correspondingly reduced values. The goodwill in the amount of € 20.8 million comprises the work- force taken over, existing contracts, implemented business pro- cesses and market position as well as the acquisition’s general business opportunities. This includes synergy effects stemming from the broader product portfolio and the opportunity of being able to market this product portfolio via the expanded and inte- grated sales and marketing network. The goodwill is not expected to be able to be applied for tax purposes. Nor-Cal’s sales and net income contribution since June 22, 2017 totaled € 28.6 million, and € 1.9 million, respectively. Had the acqui- sition been effected at the outset of ﬁscal 2017, there would have been consolidated sales revenues of € 611.3 million. The consolidat- ed net income would have been € 57.5 million taking into consider- ation the acquisition. The transaction costs incurred in ﬁscal 2017, which are to be borne by the Corporate Group, totaled K € 638. They were attributable to legal and expertise fees and are included under general and administrative expenses. Acquisition of Advanced Test Concepts Inc. With effect from February 14, 2017, Pfeiffer Vacuum Technology AG indirectly via a US subsidiary acquired all shares of Advanced Test Concepts Inc. (ATC Inc.), Indianapolis, USA. At the same time, a further economically integrated but legally independent sister com- pany of ATC Inc., having the same registered site, was acquired. With the acquisition of these 100% shareholdings Pfeiffer Vacuum consequently expanded its leak detection product portfolio. In the meantime the acquired sister company to ATC Inc. was merged into ATC Inc. and ATC Inc. legal form was changed to LLC. Major differences between the fair values and the net book values related to the recognition of intangible assets previously not re- corded, particularly customer base (€ 19.8 million), order backlog (€ 2.4 million) and developed technology (€ 1.8 million), as well as to the write-up of inventories (€ 4.1 million), tangible assets (€ 2.0 mil- lion), and the recognition of deferred tax liabilities for the fair value adjustments (€ 6.6 million). The purchase price comprises only a cash component. Taking into consideration the cash and

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The fair values of ATC’s identiﬁed assets and liabilities assumed as of February 14, 2017 (acquisition date) were comprised as follows: FAIR VALUE OF ASSETS AND LIABILITIES ASSUMED in K € Assets Intangible Assets Fixed assets Inventories Receivables Cash and cash equivalents Total assets Liabilities Trade accounts payables Other liabilities Total liabilities Total net assets (fair value) Goodwill Total consideration (purchase price) February 14, 2017 3,464 1,652 2,582 1,047 161 8,906 – 297 – 216 – 513 8,393 3,402 11,795 Major differences between the fair values and the net book values related to the recognition of intangible assets previously not re- corded, particularly customer base (€ 1.6 million), developed tech- nology (€ 1.6 million), and a brand right (€ 0.3 million), as well as to the write-up of inventories (€ 1.2 million) and a write-down in ﬁxed assets (€ – 0.4 million). The purchase price comprises only a cash component. Taking into consideration the cash and cash equivalents acquired from ATC (K € 161), the anticipated net cash used in connection with this corporate acquisition totaled K € 11,634. The gross amount of receivables assumed equaled its fair value. The goodwill in the amount of € 3.4 million comprises the work- force taken over and the acquisition’s general business opportuni- ties. This includes synergy effects stemming from the broader product portfolio and the opportunity of being able to market this product portfolio via the expanded and integrated sales and mar- keting network. The goodwill is expected to be able to be applied for tax purposes. Pfeiffer Vacuum Technology AG – Annual Report 2017 105 ATC’s sales and net income contribution since February 14, 2017 totaled € 6.2 million, and € – 0.2 million, respectively. Had the acquisition been effected at the outset of ﬁscal 2017, there would have been consolidated sales revenues of € 587.4 million. The consolidated net income would also have been € 53.8 million taking into consideration the acquisition. The transaction costs incurred in ﬁscal 2017, which are to be borne by the Corporate Group, totaled K € 89. They were attributable to legal and expertise fees and are included under general and administrative expenses. Acquisition of further 75.1 % of shares in Dreebit GmbH With effect from February 13, 2017, Pfeiffer Vacuum Technology AG acquired all remaining shares of Dreebit GmbH, Dresden, Deutsch- land, and thus increased its shareholdings from 24.9 % to 100.0 %. The acquisition has to be seen in connection with strengthening the growth area service which is a major basis for the success of Pfeiffer Vacuum. The fair values of Dreebit’s identiﬁed assets and liabilities assumed as of February 13, 2017 (acquisition date) were comprised as follows: FAIR VALUE OF ASSETS AND LIABILITIES ASSUMED in K € Assets Intangible Assets Fixed assets Inventories Receivables Cash and cash equivalents Other assets Total assets Liabilities Deferred tax liabilities Trade accounts payable Provisions Income tax liabilities Financial liabilities Other liabilities Total liabilities Total net assets (fair value) Fair value of existing 24.9 % of shares as of the acquisition date Goodwill Total consideration (purchase price) of the remaining 75.1 % of shares February 13, 2017 189 2,800 1,284 740 375 119 5,507 – 207 – 250 – 597 – 150 – 625 – 556 – 2,385 3,122 – 1,636 1,514 3,000 Major differences between the fair values and the net book values related to the write-up of ﬁxed assets (€ 0.6 million) and the rec- ognition of deferred tax liabilities for the fair value adjustments (€ 0.2 million).

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106 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Scope of Consolidation | Notes to the Consolidated Statements of Income | Notes to the Consolidated Balance Sheets The purchase price comprises only a cash component. Taking into consideration the cash and cash equivalents acquired from Dreebit (K € 375), the anticipated net cash used in connection with this corporate acquisition totals K € 2,625. Notes to the Consolidated Statements of Income The gross amount of receivables assumed equaled its fair value. The goodwill in the amount of € 1.5 million comprises the work- force taken over and the acquisition’s general business opportuni- ties. This includes synergy effects stemming from the expanded service offerings. The goodwill is not expected to be able to be applied for tax purposes. Dreebit’s sales and net income contribution since February 13, 2017 totaled € 6.6 million, and € 0.1 million, respectively. Had the acqui- sition been effected at the outset of ﬁscal 2017, there would have been consolidated sales revenues of € 587.8 million. The consoli- dated net income would have been € 53.9 million taking into consid- eration the acquisition. The transaction costs incurred in ﬁscal 2017, which are to be borne by the Corporate Group, totaled K € 108. They were attributable to legal and expertise fees and are included under general and administrative expenses. 7. Functional expenses Cost of Sales Cost of sales predominantly include the manufacturing costs for the products sold as well as the costs for the services rendered. This includes all directly attributable material and production costs as well as indirect production costs (including depreciation on pro- duction buildings and machines). In addition, freight costs, expenses for inventory valuation, and warranty expenses are included here. Selling and marketing expenses Selling and marketing expenses predominantly include wages and salaries, marketing and advertising costs, costs relating to trade shows and conventions, as well as other merchandising costs (such as catalogs, brochures, etc.). As of the acquisition date the fair value of the previously held equity portion equaled its book value. General and administrative expenses Foundations in 2017 To address the increasing importance of regional markets the sales and service company Pfeiffer Vacuum Malaysia SDN. BHD. was founded in Malaysia in 2017. This did not have any material impact on the Consolidated Financial Statements. In connection with the reconstruction and expanding of a facility in the USA, Pfeiffer Vacuum New Hampshire Realty Holdings, LLC., was founded. Formation of Pfeiffer Vacuum Indiana Realty Holdings, LLC., and Pfeiffer Vacuum California Realty Holdings, LLC., has to be seen in the context of acquiring ATC and Nor-Cal, respectively. Each of the latter three entities is a mere holding entity for the real estate acquired. Liquidations in 2017 In ﬁscal 2017 adixen Vacuum Technology (Shanghai) Co., Ltd., China, was liquidated and was thus disregarded from the scope of consol- idation. This did not have any material impact on the Consolidated Financial Statements. General and administrative expenses predominantly include wages and salaries, expenses related to allowances for doubtful accounts, audit and other general consulting fees, as well as all costs relating to the Company as a whole. Research and development expenses Research and development expenses include personnel and material expenses allocated to this functional section. Amortiza- tion expenses for developed technology recognized in connection with the purchase price allocations totaled € 2.8 million in 2017 (2016: € 2.8 million) and are also included in research and devel- opment expenses. For analysis of sales revenues please refer to the segment report- ing in Note 31. For further analysis of operating expenses, please refer to Note 15 (relating to cost of sales), to Note 24 (relating to income tax expenses), to Note 25 (relating to the development of pension expenses), and to Note 37 (relating to development of personnel expenses).

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Pfeiffer Vacuum Technology AG – Annual Report 2017 107 8. Other operating income and other operating expenses 9. Financial expenses and ﬁnancial income Other operating income and expenses are comprised as follows: Financial expenses and ﬁnancial income as recorded in 2017 and the previous year comprises as follows: COMPOSITION OF OTHER OPERATING INCOME AND EXPENSES in K € 2017 2016 COMPOSITION OF FINANCIAL INCOME AND FINANCIAL EXPENSES Foreign exchange gains Government grants Other Other operating income Foreign exchange losses Others Other operating expenses 5,781 3,117 1,447 10,345 – 8,748 – 176 – 8,924 6,169 4,351 298 10,818 – 5,740 – 232 – 5,972 in K € Interest expenses and similar Total ﬁnancial expenses Interest income Income from associated companies Total ﬁnancial income Financial result 2017 – 693 – 693 347 — 347 – 346 2016 – 662 – 662 283 18 301 – 361 Notes to the Consolidated Balance Sheets 10. Intangible assets The intangible assets item mainly includes software purchased within the consolidated Group and intangible assets recognized in con- nection with acquisitions (amongst others developed technology, customer base, trademark right) as well as goodwill. The development of intangible assets in 2017 and 2016 was as follows: DEVELOPMENT OF INTANGIBLE ASSETS IN 2017 in K € Acquisition cost Balance as at January 1, 2017 Currency changes Additions Disposals Additions from acquisitions Balance as at December 31, 2017 Amortization Balance as at January 1, 2017 Currency changes Additions Disposals Balance as at December 31, 2017 Net book value as at December 31, 2017 Software Goodwill Customer base Other intangible assets 7,130 – 14 1,104 – 3 193 8,410 4,235 – 13 974 – 3 5,193 3,217 56,800 – 3,249 — — 25,748 79,299 — — — — — 79,299 21,435 – 2,289 — — 21,349 40,495 21,435 – 807 976 — 21,604 18,891 26,920 – 633 524 – 10 6,307 33,108 19,036 – 96 4,771 – 10 23,701 9,407 Total 112,285 – 6,185 1,628 – 13 53,597 161,312 44,706 – 916 6,721 – 13 50,498 110,814

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108 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets DEVELOPMENT OF INTANGIBLE ASSETS IN 2016 in K € Acquisition cost Balance as at January 1, 2016 Currency changes Additions Disposals Balance as at December 31, 2016 Amortization Balance as at January 1, 2016 Currency changes Additions Disposals Balance as at December 31, 2016 Net book value as at December 31, 2016 Software Goodwill Customer base Other intangible assets Total 6,290 – 1 1,675 – 834 7,130 3,967 – 1 838 – 569 4,235 2,895 56,630 21,313 26,682 110,915 170 — — 122 — — 18 220 — 309 1,895 – 834 56,800 21,435 26,920 112,285 — — — — — 56,800 17,760 492 3,183 — 21,435 — 15,792 — 3,244 — 19,036 7,884 37,519 491 7,265 – 569 44,706 67,579 Impairment losses or respective reversals did not have to be re- corded for intangible assets in ﬁscal 2017 and 2016. For the purpose of testing the recoverability, goodwill and trade- mark rights with indeﬁnite useful life recognized in connection with acquisitions were allocated to cash generating units. Recoverability was tested on December 31, 2017 by means of an impairment test. The trademark right “adixen” recognized in connection with the acquisition (net book value € 3.2 million; 2016: € 3.4 million) has an indeﬁnite useful life and was allocated to the business seg- ments based on sales portions. Here, amongst others, € 0.8 mil- lion related to France, € 1.0 million to the Republic of Korea, and € 0.6 million to the USA. No impairment was determined under the impairment test conducted on December 31, 2017. The recoverable amount (value in use) for impairment testing of the goodwill was determined as at December 31, 2017. Bases were cash ﬂow forecasts for the years 2018 through 2020. These fore- casts are developed from the yearly sales and cost planning and the corresponding operating results. In doing so, the current operating results as well as the expected market, economic, and competitor developments are considered and checked against the historical results. The cash ﬂows expected after the detailed fore- cast were extrapolated using individual growth rates. Discounting of cash ﬂows is carried out using weighted average cost of capital (WACC) that also reﬂect country speciﬁc risks. The recoverable amount (value in use) for impairment testing of the goodwill recognized in connection with the adixen acquisition (€ 47.1 million; 2016: € 48.4 million) was determined as at Decem- ber 31, 2017, based on cash generating units. The adixen goodwill allocation to the cash generating units and the major assumptions used in calculating the recoverable amount are detailed in the following table.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 109 ALLOCATION OF ADIXEN GOODWILL AND MAJOR VALUATION ASSUMPTIONS December 31, 2017 December 31, 2016 Pre-tax discount rate Long-term growth rate Goodwill Pre-tax discount rate Long-term growth rate in % 9.0 11.1 11.6 8.5 9.7 9.8 10.7 in % € in millions 1.5 1.5 1.5 1.5 1.5 1.5 1.5 3.4 22.9 2.8 8.4 4.4 4.3 2.2 in % 7.8 9.3 10.3 8.9 8.4 8.7 9.4 in % 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Goodwill € in millions 3.4 22.9 2.7 7.4 4.3 4.1 2.3 Germany France Rest of Europe USA Republic of Korea China Rest of Asia The determination of the previously mentioned goodwill did not result in any impairment loss. The recoverable amount (value in use) for impairment testing of the goodwill recognized in connection with the Trinos acquisition (again € 8.2 million) was also determined as at December 31, 2017. The cash ﬂows expected for this separate cash generating unit after the detailed forecast for 2018 through 2020 were extrapolated using a growth rate of 1.5 % (unchanged). The pre-tax discount rate employed was 9.4 % (2016: 8.1 %). The determination of this value did not result in an impairment. The recoverable amounts (value in use) for impairment testing of the goodwill recognized in connection with acquisitions of Nor-Cal (€ 19.4 million), ATC (€ 3.0 million) and Dreebit (€ 1.5 million) were also determined as at December 31, 2017. The cash ﬂows expected for each of these separate cash generating units after the detailed forecast for 2018 through 2020 were extrapolated using a growth rates of 1.5 % (unchanged). The pre-tax discount rates employed were 9.7 % (Nor-Cal), 12.9 % (ATC), and 9.2 % (Dreebit), respec- tively. The determination of these values also did not result in an impairment. Basically no reasonably possible change in a key assumption would cause each unit’s carrying amount to exceed its recoverable amount. In contrast, an increase in discount rate by 0.15 %-point with all other assumptions kept constant would cause the recov- erable amount (value in use) of the goodwill allocated to the Italy region to match its net book value (2016: 0.75 %-points). The same situation would result from a 0.1 %-point to 4.95 % reduction of the sustainable EBIT margin used for the cash ﬂow extrapolation or a 0.2 % point reduction in the sustainable sales growth rate or a reduction of the sustainable free cash ﬂow by K € 15 used for the cash ﬂow extrapolation (2016: 0.75 %-points, 0.9 %-points, and K € 66, respectively). An increase in discount rate by 0.3 %-points with all other assumptions kept constant would cause the recov- erable amount (value in use) of the goodwill allocated to the China region to match its net book value (2016: 1.2 %-points). The same situation would result from a 0.3 %-point to 4.2 % reduction of the sustainable EBIT margin used for the cash ﬂow extrapolation or a 0.4 %-point reduction in the sustainable sales growth rate or a reduction of the sustainable free cash ﬂow by K € 60 used for the cash ﬂow extrapolation (2016: 1.1 %-points, 1.3 %-points, and K € 181, respectively). An increase in discount rate by 0.25 %-points with all other assumptions kept constant would cause the recov- erable amount (value in use) of the goodwill allocated for the ﬁrst time for Dreebit to match its net book value. The same situation would result from a 0.30 %-point to 4.1 % reduction of the sustain- able EBIT margin used for the cash ﬂow extrapolation or a 0.3 %- point reduction in the sustainable sales growth rate or a reduction of the sustainable free cash ﬂow by K € 20 used for the cash ﬂow extrapolation. As of December 31, 2017, the amount by which the value in use exceeded the respective unit’s net book value for the said three cash generating units in Italy and China and for Dreebit totaled € 0.1 million, € 0.8 million, and € 0.3 million, respectively.

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110 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets 11. Property, plant and equipment DEVELOPMENT OF PROPERTY, PLANT AND EQUIPMENT 2017 in K € Acquisition or manufacturing cost Balance as at January 1, 2017 Currency changes Additions Disposals Additions from acquisitions Reclassiﬁcations Balance as at December 31, 2017 Depreciation Balance as at January 1, 2017 Currency changes Additions Disposals Balance as at December 31, 2017 Net book value as at December 31, 2017 DEVELOPMENT OF PROPERTY, PLANT AND EQUIPMENT 2016 in K € Acquisition or manufacturing cost Balance as at January 1, 2016 Currency changes Additions Disposals Reclassiﬁcations Balance as at December 31, 2016 Depreciation Balance as at January 1, 2016 Currency changes Additions Disposals Balance as at December 31, 2016 Net book value as at December 31, 2016 Land and Buildings Technical Equipment and Machinery Other Equip- ment, Factory and Ofﬁce Equipment Construction in Progress 74,230 – 912 5,577 – 162 7,746 894 87,373 33,549 – 40 3,917 – 158 37,268 50,105 80,779 – 633 6,241 – 1,707 3,455 3,261 91,396 53,388 – 286 7,052 – 1,640 58,514 32,882 30,510 – 454 3,194 – 717 601 196 33,330 18,347 – 273 3,110 – 570 20,614 12,716 4,818 – 259 11,038 — — – 4,351 11,246 — — — — — 11,246 Land and Buildings Technical Equipment and Machinery Other Equip- ment, Factory and Ofﬁce Equipment Construction in Progress 71,820 – 54 1,334 – 414 1,544 74,230 30,507 – 50 3,506 – 414 33,549 40,681 74,299 87 6,624 – 1,033 802 80,779 47,487 102 6,786 – 987 53,388 27,391 27,301 5 3,006 – 950 1,148 30,510 16,260 – 8 2,840 – 745 18,347 12,163 3,145 8 5,159 — – 3,494 4,818 — — — — — 4,818 Total 190,337 – 2,258 26,050 – 2,586 11,802 — 223,345 105,284 – 599 14,079 – 2,368 116,396 106,949 Total 176,565 46 16,123 – 2,397 — 190,337 94,254 44 13,132 – 2,146 105,284 85,053 In ﬁscal 2017, no buildings and machinery were used as collateral to secure the Group’s ﬁnancial liabilities (2016: K € 3,429). Neither in 2017 nor in the previous year there were any impairment losses or related reversals for property, plant, and equipment.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 111 12. Investment properties DEVELOPMENT OF INVESTMENT PROPERTIES COMPOSITION OF EQUITY VALUE in K € 2017 2016 in K € 2017 2016 Current assets Acquisition or manufacturing cost Balance as at January 1 Additions Disposals Reclassiﬁcations Balance as at December 31 Depreciation Balance as at January 1 Additions Disposals Reclassiﬁcations Balance as at December 31 Net book value as at December 31 861 — — — 861 389 24 — — 413 448 861 — — — 861 365 24 — — 389 472 The real estate shown in this line item was rented out in ﬁscal 2017 and 2016. Rental revenues amounted to K € 55 (2016: K € 51) and direct operating expenses amounted to K € 27, unchanged to the previous year. Impairment losses or related reversals did not have to be recorded in 2017 and 2016. The fair value of investment properties remains unchanged at € 0.5 million as per December 31, 2017 and 2016. Fair values were derived on the basis of the Company’s own calculations by discounting expected net rental revenues during the estimated remaining life by an appropriate discount rate (level 3 of the fair value hierarchy according to IFRS 13). 13. Shares in associated companies As at December 31, 2016, only the shares in Dreebit were recorded in this position. Following the acquisition of all remaining shares at the beginning of 2017 this entity is now fully consolidated in the Consolidated Financial Statements (please refer to Note 6). Dis- closure under shares in associated companies thus no longer applies. Non-current assets Current liabilities Non-current liabilities Total Equity Holdings quota Equity Value Dec. 31 — — — — — — — 2,623 6,229 – 2,283 — 6,569 24.90 % 1,636 With sales of K € 6,900 Dreebit in 2016 generated a net income of K € 71. The impact of the change in the investment book value is shown in the ﬁnancial income 2016, please refer to Note 9. 14. Other ﬁnancial assets Other ﬁnancial assets include non-current ﬁnancial assets, mainly cash items K € 2,377 (2016: K € 3,150) and deposits K € 949 (2016: K € 915). 15. Inventories COMPOSITION OF INVENTORIES in K € 2017 2016 Raw materials Work in process Finished products Total inventories, net Dec. 31 31,816 28,667 52,901 113,384 26,778 23,725 31,234 81,737 Materials consumption in ﬁscal 2017 amounted to € 218.5 million (2016: € 180.6 million) and is included in cost of sales. In 2017, an amount of K € 2,702 (2016: K € 2,180) from the valuation of inventories at net realizable value was recorded as expense. This expense was shown under cost of sales.

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112 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets 16. Trade accounts receivable In connection with its normal course of business, the Company extends credit to a wide variety of business customers. The Company performs ongoing credit evaluations of its customers and establishes adequate allowances for identiﬁed credit risks. Trade accounts re- ceivable do not bear any interest and have a remaining term of less than one year. COMPOSITION OF TRADE ACCOUNTS RECEIVABLE SUMMARY OF ACTIVITY IN THE ALLOWANCE FOR DOUBTFUL ACCOUNTS in K € 2017 2016 in K € Trade accounts receivable Allowance for doubtful accounts Trade accounts receivable, net Dec. 31 80,780 – 719 80,061 69,980 – 628 69,352 Balance as at January 1 Currency changes Additions Utilization Balance as at December 31 2017 628 – 36 528 – 401 719 2016 1,196 – 9 129 – 688 628 COMPOSITION OF UNRESERVED TRADE ACCOUNTS RECEIVABLE Thereof: Unreserved and not Overdue Net Book Value Thereof: Unreserved and Overdue in the Following Periods < 30 Days 30 – 60 Days 61 – 90 Days 91 – 180 Days 181 – 360 Days > 360 Days 80,061 69,352 59,655 55,684 14,099 9,319 2,842 2,240 1,420 751 1,105 402 330 227 221 280 in K € 2017 2016 Dec. 31 As at December 31, 2017 receivables with a nominal value of K € 1,108 were subject to allowances for doubtful accounts (December 31, 2016: K € 1,077). In 2017, expenses for derecognition of unreserved receivables amounted to K € 4 (2016: K € 51). 18. Cash and cash equivalents The cash and cash equivalents item consists of cash at banks and cash on hand. Additionally, the Company records all bank deposits having an original maturity of three months or less as cash equiv- alents. The fair value of cash and cash equivalents corresponds to their net book value. 17. Other accounts receivable This line item totaled K € 11,792 as at December 31, 2017 (Decem- ber 31, 2016: K € 11,430). As in the year before, this position was characterized by expense subsidies of K € 5,313 (December 31, 2016: K € 3,047) and VAT claims of K € 3,239 (December 31, 2016: K € 1,492). Asserted indemnity claims in connection with a former acquisition that were included here in the prior year were realized in ﬁscal 2017. Realized amounts exceeding the recorded claims were shown in other operating income. 19. Share capital and additional paid-in capital Unchanged compared to the previous year end, the share capital of Pfeiffer Vacuum Technology AG (parent company) consisted of 9,867,659 issued and outstanding no-par ordinary shares. The Annual Shareholders Meeting on May 24, 2016, authorized the Management Board to increase the Company’s share capital by K € 12,631, or 4,933,829 shares, in consideration for contributions in cash and/or kind once or in partial amounts (authorized capital). This authorization is valid through May 23, 2021, and is subject to the consent of the Supervisory Board.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 113 Management and Supervisory Boards propose to let shareholders participate in the Company’s success via a dividend in the amount of € 2.00 per share. This proposal is subject to the approval of the Annual General Meeting. Because the proposal must be approved by the Annual General Meeting, the resulting payment of K € 19,735 has not been recorded as a liability in the balance sheet for the ﬁscal year ended December 31, 2017. 21. Other equity components Other equity components comprise unrealized gains/losses on hedges and actuarial gains/losses resulting from valuation of de- ﬁned beneﬁt obligations and plan assets at fair value. Furthermore this position comprises foreign currency translation adjustments. Actuarial Gains / Losses Unrealized Gains / Losses on Hedges Foreign Currency Translation Adjustments Total – 12,450 – 5,166 – 412 673 12,553 -— — 673 – 25,003 – 5,166 — — – 30,169 – 121 — — – 30,290 — — – 412 — – 412 — 412 -— — 13,226 – 17,355 -— — – 13,252 – 26 – 121 412 – 13,252 – 30,316 According to the resolution of the Annual Shareholders Meeting on May 22, 2014, the Management Board is authorized to issue fractional bonds with option or conversion rights or conversion obligations, proﬁt participation rights or participating bonds (or combinations of these instruments) with an aggregate nominal value of up to € 200,000,000.00 and to grant the holders con- version rights for up to 2,466,914 no-par bearer shares of the Company having a pro-rata amount of up to € 6,315,299.84 of the share capital. This authorization is valid until May 21, 2019, and requires the consent of the Supervisory Board. There were no changes of the additional paid-in capital in 2017 or 2016. 20. Paid and proposed dividends The Annual General Meeting on May 23, 2017, resolved to pay a dividend of € 3.60 per share (Annual Shareholders Meeting on May 24, 2016: € 3.20 per share). The dividend payment carried out thereunder amounted to K € 35,524 in 2017 (2016: K € 31,577). DEVELOPMENT OF OTHER EQUITY COMPONENTS in K € Balance as at January 1, 2016 Changes in actuarial gains / losses (net of tax) Changes in fair value of cash ﬂow hedges (net of tax) Changes in foreign currency translation Balance as at December 31, 2016 Changes in actuarial gains / losses (net of tax) Changes in fair value of cash ﬂow hedges (net of tax) Changes in foreign currency translation Balance as at December 31, 2017 Due to the fact that the terms of all cash ﬂow hedges are less than one year, the reported year-end balances as at December 31 of the respective years will be reclassiﬁed to the income statement the next year. The new year-end amounts result form changes during the respective year and thus not from prior years. TAX EFFECT ON OTHER COMPREHENSIVE INCOME 2017 2016 in K € Gross Amount Tax Effect Net Amount Gross Amount Tax Effect Net Amount Actuarial gains / losses Cash ﬂow hedges Currency changes Total other comprehensive income Dec. 31 394 588 – 13,252 – 12,270 – 515 – 176 — – 691 – 121 412 – 13,252 – 12,961 – 7,023 – 588 673 – 6,938 1,857 176 — 2,033 – 5,166 – 412 673 – 4,905

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114 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets 22. Treasury shares 24. Income taxes At the Annual Shareholders Meeting on May 21, 2015, the share- holders authorized the Management Board to acquire treasury shares pursuant to § 71, Sub-Para. 1, No. 8, German Stock Corpora- tion Act (“AktG”). This authorization allows the Company to acquire treasury shares representing up to € 2,526,120.70 of the capital stock (986,766 shares equal to 10 % of capital stock at the time of the resolution), requires the consent of the Supervisory Board for execution, and is valid through May 20, 2020. 23. Long-term ﬁnancial liabilities In connection with the acquisition of Nor-Cal Products Holdings Inc. and its subsidiaries, long-term ﬁnancial liabilities having a net cash inﬂow of € 70.0 million were taken out in the course of 2017. With it, an existing credit line was amended. These liabilities have a Euribor-based variable interest rate including an arm’s-length margin. Interest clearing is made quarterly. Again for the ﬁscal year 2017, interest expenses totaling € 0.3 million were recorded. Under the loan agreement, the Group has committed to comply with a determined ﬁnancial ratio. The Company has clearly complied with this ratio in 2017 and 2016. Pfeiffer Vacuum and its subsidiaries have various lines of credit available to them for operating purposes, totaling approximately € 13.6 million (December 31, 2016: € 53.7 million). Financial obligations as shown under short and long-term ﬁnancial liabilities may result in cash ﬂows from ﬁnancing activities in future reporting periods. Changes of these ﬁnancial liabilities in ﬁscal years 2017 and 2016 predominantly consisted of cash-based changes. Within the framework of the Nor-Cal acquisition on June 22, 2017, ﬁnance lease liabilities totaling € 0.3 million were assumed (please refer to Note 6). This was a non-cash change. Under current German corporate tax law, taxes on the income of German companies comprise corporate taxes, trade taxes, and an additional surtax. INCOME BEFORE TAX WAS TAXABLE IN THE FOLLOWING JURISDICTIONS in K € Germany Outside Germany Total 2017 2016 33,715 37,325 71,040 43,354 24,261 67,615 COMPOSITION OF INCOME TAX EXPENSE in K € 2017 2016 Current taxes Germany Outside Germany Deferred taxes Germany Outside Germany – 10,593 – 11,304 – 21,897 – 12,651 – 8,859 – 21,510 344 4,361 4,705 – 1 928 927 Income tax expense – 17,192 – 20,583 K € 22,301 of current tax expense relate to earnings in 2017 (2016: K € 20,183). This line item additionally contains tax income for prior years amounting to K € 404 (2016: tax expenses of K € 1,327). RECONCILIATION FROM EXPECTED TO ACTUAL INCOME TAX EXPENSE in K € 2017 2016 Earnings before taxes 71,040 67,615 Expected tax expense using the tax rate of the parent company (28.81 %) – 20,467 – 19,480 Non-deductible expenses Effects due to dividend payments Deferred tax changes due to changes in tax laws Non-taxable income Tax credits/debits due to tax ﬁlings in prior years Difference foreign tax rates Other Income tax expense – 1,019 – 180 1,924 1,902 404 257 – 13 – 1,100 – 182 — 1,306 – 1,327 106 94 – 17,192 – 20,583

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Pfeiffer Vacuum Technology AG – Annual Report 2017 115 As opposed to 30.4 % the year before, the tax ratio for the Pfeiffer Vacuum Group amounted to 24.2 % in 2017. DEFERRED TAXES RECORDED IN THE INCOME STATEMENT DEFERRED TAXES RELATE TO THE FOLLOWING BALANCE SHEET ITEMS in K € Deferred tax assets Pensions Inventories Personnel and other provisions Tax credits Tax loss carry forwards Property, plant and equipment Intangible assets Receivables (including allowances for doubtful accounts) Derivatives Other in K € Intangible assets Property, plant and equipment 2017 2016 Tax credits Receivables (including allowances for doubtful accounts) Inventories Personnel and other provisions Tax loss carry forwards Pensions Derivatives Tax-privileged reserves of a Swedish subsidiary Other Total deferred taxes (income) 16,887 5,184 4,106 2,152 1,270 688 591 328 3 73 18,385 5,722 3,537 - 733 246 138 172 288 43 2017 4,736 952 500 337 333 8 2016 2,092 762 — – 248 – 337 787 – 1,300 – 1,881 – 781 – 109 — 29 4,705 – 313 93 47 – 75 927 Total deferred tax assets 31,282 29,264 Deferred tax liabilities Intangible assets Property, plant and equipment Receivables (including allowances for doubtful accounts) Inventories Personnel and other provisions Total deferred tax liabilities Total deferred taxes, net Dec. 31 – 6,750 – 5,424 – 51 – 8 — – 12,233 19,049 – 2,349 – 5,003 – 285 – 26 – 137 – 7,800 21,464 AMOUNTS RECORDED IN THE BALANCE SHEET in K € Deferred tax assets Deferred tax liabilities Total deferred taxes, net Dec. 31 2017 2016 23,037 – 3,988 19,049 23,312 – 1,848 21,464 As at December 31, 2017, the total deferred tax assets include in- come taxes recorded directly in equity in the amount of K € 11,784 (December 31, 2016: K € 12,475). The total deferred tax liabilities include no income taxes recorded directly in equity. The amount recorded directly in equity in 2017 only related to actuarial gains/ losses (2016: actuarial gains/losses and derivatives/hedging). For tax losses totaling K € 2,213 (thereof K € 372 deductible until 2018, K € 205 deductible until 2019, K € 133 deductible until 2020, K € 1,055 deductible until 2021 and K € 220 deductible until 2022), no deferred tax assets have been recorded as these losses will presumably not be offset against taxable gains until the expiration. Provisions have not been established for additional taxes on the undistributed earnings of non-German subsidiaries. These earnings are considered to be permanently reinvested and could become subject to additional tax if remitted or deemed remitted as divi- dends. Under current German law, dividends from non-German and German subsidiaries are 95 % tax-exempt, i.e. 5 % of dividend income is not deductible from income for corporate tax purposes. The management estimates that the effects of this rule in Germany will be negligible.

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116 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets 25. Pensions and similar obligations Deﬁned beneﬁt pension plans COMPOSITION OF THE NET LIABILITY RECORDED IN THE BALANCE SHEET in K € 2017 2016 Present value of funded deﬁned beneﬁt obligation Present value of unfunded deﬁned beneﬁt obligation Total present value of deﬁned beneﬁt obligation Fair value of plan assets Net deﬁned beneﬁt liability Dec. 31 101,010 99,782 10,526 10,231 111,536 – 61,502 50,034 110,013 – 58,825 51,188 For Pfeiffer Vacuum Inc., USA, there is a plan in place consisting of old-age, invalidity, and surviving dependents beneﬁts with the obligations being based upon period of service and ﬁnal salary. These beneﬁts are partially funded via a trust arrangement. There are no legally binding minimum funding requirements. For Pfeiffer Vacuum SAS, France, and for Pfeiffer Vacuum Semi Korea, Ltd., Republic of Korea, there are plans in place with the obligations being based upon period of service and ﬁnal salary to be paid as a one-time installment due at the beginning of the retirement. The plan of Pfeiffer Vacuum Semi Korea, Ltd. is partially funded. There are no legally binding minimum funding require- ments in France or the Republic of Korea. A Dutch pension plan was realigned in ﬁscal 2016 and was thus no longer considered a deﬁned beneﬁt plan as of December 31, 2016. The adjustment impacts were shown as plan curtailments/settlements in the prior year. COMPOSITION OF THE NET PENSION EXPENSES REGIONAL SPLIT OF THE NET LIABILITY RECORDED IN THE BALANCE SHEET in K € For Pfeiffer Vacuum GmbH, there are plans in place consisting of old-age, invalidity, and surviving dependents beneﬁts. These obli- gations are based upon plans reﬂecting period of service and ﬁnal salary. However, these plans are closed for new employees since many years. For new employees, there is a retirement arrangement in place since December 31, 2007 which has been implemented as a direct commitment on a period of service and funded basis. Accordingly for all employees of Pfeiffer Vacuum GmbH an em- ployer funded pension scheme is in place which is partially funded via the Pfeiffer Vacuum Trust e.V. There are no legally binding mini- mum funding requirements for these plans. For re-appointed members of the Pfeiffer Vacuum Technology AG Management Board there are individually agreed plans in place, consisting of old-age, invalidity, and surviving dependents beneﬁts. These obligations are based on period of service as well as ﬁnal salary commitments and are also largely funded via the Pfeiffer Vacuum Trust e.V. Again, there are no legally binding minimum funding requirements. These beneﬁt obligations are detailed in the compensation report (an element of MD&A). Net pension expenses were allocated to the functional expenses according to the input involved. DEVELOPMENT OF THE DEFINED BENEFIT OBLIGATION in K € 2017 2016 Present value of deﬁned beneﬁt obligation as at January 1 Current service cost Interest cost on the deﬁned beneﬁt obligation Actuarial gains / losses from changes in demographic assumptions Actuarial gains / losses from changes in ﬁnancial assumptions Actuarial experience gains / losses Beneﬁts paid Curtailments / settlements Currency changes Present value of deﬁned beneﬁt obligation as at December 31 Thereof attributable to: Active employees Deferred employees Pensioners 110,013 3,654 2,099 – 341 638 115 – 3,510 — – 1,132 102,507 3,433 2,352 676 6,027 – 371 – 3,506 – 1,434 329 111,536 110,013 61,022 9,677 40,837 64,887 4,192 40,934 in K € Germany Europe (excluding Germany) Rest of world Net deﬁned beneﬁt liability Dec. 31 2017 2016 Current service cost 36,302 9,263 4,469 50,034 36,813 8,893 5,482 51,188 Net interest expense Income from plan curtailments / settlements Net pension expenses 2017 3,654 936 — 4,590 2016 3,433 953 – 267 4,119

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DEVELOPMENT OF PLAN ASSETS in K € 2017 2016 Fair value of plan assets as at January 1 Interest income Experience gains / losses Company contributions Beneﬁt payments Curtailments / settlements Currency changes Fair value of plan assets as at December 31 58,825 1,163 656 5,137 – 3,510 — – 769 59,010 1,399 – 645 3,531 – 3,506 – 1,167 203 61,502 58,825 Pfeiffer Vacuum Technology AG – Annual Report 2017 117 Accounting for 87 % the vast majority of plan assets related to the funding of the German beneﬁt plans. To invest these funded amounts ﬁducially and insolvency protected, Pfeiffer Vacuum Trust e.V. was founded. Pfeiffer Vacuum Trust e.V. issued a mutual fund with a pursued target equity allocation of up to 30 % as well as a pursued ﬁxed-income securities and cash allocation of at least 70 %. The fund is managed by an unrelated third-party asset management company with the major conditions regarding the asset allocation being given and adjusted when necessary. Funds are invested conservatively using also a value safeguarding approach. Under- lying risks in connection with the investment of plan assets, for example fair value and default risks, are minimized accordingly. The risks relating to the deﬁned beneﬁt plans within Pfeiffer Vacuum Group predominantly relate to the determination of dis- count rates. Changes to this parameter impact disproportionately the present value with the current relatively low interest rate level leading to a comparably high beneﬁt obligation. In addition, bene- ﬁt obligation is impacted by the other actuarial assumptions (for example life expectancy, wage and salary trend, pension trend). Depending on the elements of the pension plan life expectancy or pension trend are of subordinate importance. The following table shows the respective impact of an isolated adjustment of individual assumptions with all other parameters including the basic methodology kept constant compared to the original calcu- lation. SENSITIVITY ANALYSIS 2017 2017 2016 1.75 3.00 2.00 3.80 2.00 1.99 3.39 1.75 3.00 2.00 4.40 2.00 1.83 3.35 ACTUARIAL ASSUMPTIONS in % Germany Discount rate Wage and salary trend Pension trend United States Discount rate Wage and salary trend France, Republic of Korea Discount rate (weighted average) Wage and salary trend (weighted average) Dec. 31 COMPOSITION OF PLAN ASSETS Equity securities Debt securities Cash and cash equivalents Other Total Dec. 31 2017 2016 in K € in % in K € in % 20,289 36,002 2,367 2,844 33.0 58.5 3.9 4.6 13,816 40,078 3,714 1,217 23.5 68.1 6.3 2.1 61,502 100.0 58,825 100.0 Present value of deﬁned beneﬁt obligation as at December 31, 2017 Discount rate Pension trend Wage and salary trend With the exemption of plan assets in the category “Other” totaling K € 1,745 (December 31, 2016: K € 621), all plan assets are traded on an active market. Life expectancy Plan assets do not contain ﬁnancial instruments issued by the Company or other assets owned by the Company. Dec. 31 Change in actuarial assumption Impact on deﬁned beneﬁt obligation in K € in % 1.0 %-point increase 1.0 %-point decrease 0.25 %-point increase 0.25 %-point decrease 0.5 %-point increase 0.5 %-point decrease increase by 1 year decrease by 1 year 111,536 – 14,472 – 13.0 18,392 2,592 – 2,476 1,844 – 1,746 4,252 – 4,265 16.5 2.3 – 2.2 1.7 – 1.6 3.8 – 3.8

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118 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets SENSITIVITY ANALYSIS 2016 26. Trade accounts payable Change in actuarial assumption Impact on deﬁned beneﬁt obligation Trade accounts payable do not bear any interest and, as in the year before, have maturities of less than one year. in K € in % 27. Other payables Other payables (K € 22,333 as at December 31, 2017, and K € 20,530 as at December 31, 2016) mainly consist of payroll taxes and VAT, as well as payables from social security contribu- tions and legally binding participation programs. They do not bear any interest and, as in the year before, have maturities of less than one year. 28. Provisions COMPOSITION OF PROVISIONS in K € 2017 2016 Personnel provisions Warranty provisions Other provisions Total Dec. 31 19,896 15,769 4,229 39,894 13,775 13,062 2,930 29,767 Provisions for employee-related expenses primarily include provi- sions for proﬁt-sharing obligations and bonuses. Warranty provisions include the amounts expected due to claims in connection with product warranties. They are recorded as per the close of the ﬁscal year for realized revenues based on manage- ment’s estimates and experience. Present value of deﬁned beneﬁt obligation as at December 31, 2016 Discount rate Pension trend Wage and salary trend Life expectancy Dec. 31 1.0 %-point increase 1.0 %-point decrease 0.25 %-point increase 0.25 %-point decrease 0.5 %-point increase 0.5 %-point decrease increase by 1 year decrease by 1 year 110,013 – 14,638 – 13.3 18,685 2,609 – 2,492 2,096 – 1,983 4,215 – 4,227 17.0 2.4 – 2.3 1.9 – 1.8 3.8 – 3.8 EXPECTED MATURITY OF UNDISCOUNTED PENSION PAYMENTS in K € Less than 1 year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Between 4 and 5 years 2017 3,494 3,652 3,940 3,976 4,515 2016 3,800 4,014 4,021 4,497 4,644 More than 5 until 10 years 26,273 28,718 Dec. 31 The weighted average duration of the deﬁned beneﬁt obligation at December 31, 2017 amounted to 16.1 years (December 31, 2016: 16.1 years). The expected contributions for deﬁned beneﬁt plans in 2018 will be approximately € 3.5 million. Deﬁned contribution plans Employees of the Company in certain countries are covered by deﬁned contribution plans. Generally, contributions are based upon a percentage of the employee’s wages or salaries. The costs of these plans charged to operations amounted to K € 11,805 in 2017 (2016: K € 10,375).

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Pfeiffer Vacuum Technology AG – Annual Report 2017 119 Personnel Warranty Other 13,775 – 424 16,844 – 11,494 – 568 1,763 19,896 13,062 – 169 11,835 – 8,974 — 15 15,769 Total 29,767 – 703 32,421 2,930 – 110 3,742 – 2,779 – 23,247 — 446 4,229 – 568 2,224 39,894 DEVELOPMENT OF PROVISIONS in K € Balance as at January 1, 2017 Currency changes Additions Utilization Releases Additions from acquisitions Balance as at December 31, 2017 29. Short-term ﬁnancial liabilities As of December 31, 2017, short-term ﬁnancial liabilities include bank liabilities in the amount of € 0.1 million maturing within one year (December 31, 2016: € 0.2 million). 30. Commitments and other ﬁnancial obligations The Company has entered into leases and maintenance agreements which expire on various dates, some of which are renewable. The tables below present the maximum amount of the contractual commitments as at year end, classiﬁed by the periods in which the contingent liabilities or commitments will expire. CONTRACTUAL OBLIGATIONS AS AT DECEMBER 31, 2017 in K € Operating leases Purchase obligations Repair and maintenance Total CONTRACTUAL OBLIGATIONS AS AT DECEMBER 31, 2016 in K € Operating leases Purchase obligations Repair and maintenance Total Total 11,624 23,430 2,665 37,719 Total 8,914 15,033 2,289 26,236 Payments Due by Period < 1 Year 1 – 3 Years 3 – 5 Years > 5 Years 3,742 19,556 2,410 25,708 4,736 3,874 188 8,798 2,072 — 57 2,129 1,074 — 10 1,084 Payments Due by Period < 1 Year 1 – 3 Years 3 – 5 Years > 5 Years 3,512 11,984 1,993 17,489 2,989 3,049 239 6,277 2,369 — 47 2,416 44 — 10 54 Purchase obligations include long-term arrangements for future supplies of materials. Rental expenses amounted to € 5.0 million (2016: € 4.2 million) and mainly related to the local sales companies’ rented premises.

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120 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets 31. Segment reporting The Company’s business operations include the development, man- ufacture, sale and service of vacuum pumps, vacuum components and instruments, as well as vacuum systems. The subsidiaries in the individual countries are independent legal entities with their own management, which distribute products and provide services. The entire product portfolio is offered by all sales subsidiaries. Controlling of business development by corporate management is carried out on the level of the legal entities. Accordingly, the Company identiﬁes its primary operating segments by legal entity. Due to the similarity of their economic characteristics, including nature of products sold, type of customers, methods of product distribution, and economic environment, the Company basically aggregates its European and Asian subsidiaries into one reporting segment, “Europe (excluding Germany and France)” and “Asia (excluding Republic of Korea)”. In contrast, the companies in France and the Republic of Korea were presented separately each as an individual segment. This was caused by the different functions of the French entities, including research and development as well as production, and the production function of the Korean entities, respectively. Unchanged compared to previous year, all information is based upon the geographic location of the Group Company in question. Transactions between segments are based upon the arm’s length principle. The internal reporting on which the disclosures are based is IFRS. Segment sales and segment results in the primary report- ing format initially include the effects of inter-segment transactions. These effects are eliminated in connection with the consolidation process. SEGMENT REPORTING AS AT DECEMBER 31, 2017 in K € Germany France Net sales Third party Intercompany Operating proﬁt Financial results Earnings before taxes Segment assets Thereof: Assets according to IFRS 8.33 (b) 1 Segment liabilities Capital expenditures: Property, plant and equipment 2 Intangible assets Depreciation2 Amortization 253,149 134,767 118,382 34,594 — 34,594 147,573 57,948 118,644 5,039 950 – 5,144 – 766 209,902 45,546 164,356 13,871 — 13,871 113,641 58,171 70,167 8,245 631 – 5,078 – 3,316 Europe (excl. G and F) 99,696 95,092 4,604 6,908 — 6,908 46,580 6,494 8,241 1,792 — – 666 – 5 Republic of Korea Asia (excl. Korea) 103,838 101,253 2,585 13,097 — 13,097 60,196 17,542 14,201 1,771 19 – 1,262 – 5 74,758 68,159 6,599 3,651 — 3,651 49,724 13,276 7,909 1,967 11 – 959 – 7 Other / Consoli- dation – 299,796 — – 299,796 – 13 – 346 – 359 — — — — — — — Group 586,962 586,962 — 71,386 -346 71,040 553,361 222,051 232,424 26,050 1,628 – 14,103 – 6,721 USA 145,415 142,145 3,270 – 722 — – 722 135,647 68,620 13,262 7,236 17 – 994 – 2,622 1 Non-current assets other than ﬁnancial instruments, deferred tax assets and prepaid pension cost 2 Including investment properties

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Pfeiffer Vacuum Technology AG – Annual Report 2017 121 SEGMENT REPORTING AS AT DECEMBER 31, 2016 in K € Germany France Net sales Third party Intercompany Operating proﬁt Financial results Earnings before taxes Segment assets Thereof: Assets according to IFRS 8.33 (b) 1 Segment liabilities Capital expenditures: Property, plant and equipment 2 Intangible assets Depreciation2 Amortization 221,010 109,284 111,726 42,420 — 42,420 142,597 53,640 53,781 6,646 1,290 – 4,590 – 824 173,297 41,757 131,540 9,338 — 9,338 127,303 57,704 58,068 5,312 569 – 5,366 – 4,257 Europe (excl. G and F) 92,939 89,437 3,502 6,478 — 6,478 38,155 5,468 7,048 1,788 — – 543 – 174 Republic of Korea Asia (excl. Korea) 69,595 66,526 3,069 3,673 — 3,673 54,533 17,074 11,775 575 1 – 1,298 – 926 62,199 58,299 3,900 710 — 710 42,720 13,257 5,177 1,571 12 – 991 – 516 Other / Consoli- dation – 254,163 — – 254,163 – 25 – 361 – 386 — — — — — — — Group 474,244 474,244 — 67,976 – 361 67,615 459,322 157,612 143,748 16,123 1,895 – 13,156 – 7,265 USA 109,367 108,941 426 5,382 — 5,382 54,014 10,469 7,899 231 23 – 368 – 568 1 Non-current assets other than ﬁnancial instruments, deferred tax assets and prepaid pension cost 2 Including investment properties Aside from directly allocatable assets, the “Other” segment con- tains all assets that cannot be allocated on a reasonable basis (e.g. securities). Sales with one major customer (> 10 % of total sales) amounted to € 74.6 million in 2017 and were recorded in the Republic of Korea, USA and Asia (excl. Korea) segment. In 2016, these sales were less than 10 % of total sales. 32. Financial instruments Fair value The net book value of ﬁnancial instruments (e.g. cash and cash equivalents, trade accounts receivable and trade accounts payable, other accounts receivable and payable) essentially equals their fair value. SALES BY PRODUCT in K € Turbopumps Instruments and Components Backing Pumps Service Systems Group 2017 2016 Interest rate risks 173,419 160,621 132,767 107,800 12,355 586,962 144,518 105,520 114,989 99,698 9,519 474,244 The interest-bearing portion of cash and cash equivalents involves interest rate risks. All investment forms have variable interest rates and are invested on a short-term basis. There are no further investment forms that result in interest rate risks within the Pfeiffer Vacuum Group. Due to the short investment period for cash and cash equivalents, the agreed interest rate equals the market rate. Even if the market rate should change signiﬁcantly, there will be no material impact on the fair value of cash and cash equivalents because the interest rate can be adjusted after only a short period of time. As at December 31, 2017, as in the year before, there were no more interest-sensitive ﬁnancial assets. As a result of cash and cash equivalents as at December 31, 2017, an increase (decrease) in interest rate by 50 basis points would increase (decrease) earnings

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122 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets by K € 487 (December 31, 2016: increase/decrease by K € 550). As a result of ﬁnancial liabilities shown as at December 31, 2017, an increase (decrease) in interest rate by 50 basis points would decrease (increase) earnings by K € 302. With regard to ﬁnancial liabilities there were no sensitivities to be disclosed for 2016, as there were no underlying amounts. Credit risks Due to the Company’s vastly heterogeneous customer structure, there are no material credit risk concentrations within the Group. Credit risks are additionally minimized through rigorous accounts receivable management and by monitoring our customers’ payment patterns. Furthermore, deliveries to new customers are essentially made only after credit assessment, against payment in advance or credit limit. As a result, Pfeiffer Vacuum is able to keep the level of its allowance for doubtful accounts low, even in difﬁcult eco- nomic times. Liquidity risks Due to the above-average level of cash and cash equivalents, no liquidity risks can be identiﬁed. Foreign exchange rate risks Approximately 56 % (2016: 53 %) of the Company’s net sales are denominated in currencies other than the euro, primarily in U.S. dollars. The Company enters into foreign currency forward con- tracts and options to hedge the exposure of its forecasted sales against currency ﬂuctuations. All derivative ﬁnancial instruments are entered into only within this scope. The derivatives that qualify for cash ﬂow hedges under IAS 39 are recognized either as assets or liabilities at their fair values. Changes in the values of these cash ﬂow hedges are recorded in equity under other equity components, net of applicable taxes. These amounts are subsequently reclassiﬁed as earnings (foreign ex- change gains / losses) in the same period as the underlying trans- actions affect operating income. For the ﬁscal years ended Decem- ber 31, 2017, and 2016, there were no amounts that were recog- nized in earnings due to hedge ineffectiveness. For the same periods, no gains or losses had to be reclassiﬁed to earnings from other equity components as a result of the discontinuance of cash ﬂow hedges. If derivatives are kept, these derivatives are marked to market at period end using quoted forward rates. As at Decem- ber 31, 2017, there were no contracts to be classiﬁed as cash ﬂow hedges. Thus no amounts were recorded in equity for the period ended December 31, 2017. The negative fair values of the cash ﬂow hedges recorded under other accounts payable for the period ended December 31, 2016, totaled K € 588. Because the changes in fair value for cash ﬂow hedges are recorded directly in equity, other equity components decreased by K € 412, net of taxes of K € 176, as at December 31, 2016. The derivatives classiﬁed as fair value hedges totaled K € -6 as at December 31, 2017, were recorded through the income statement, and shown under other accounts payable (December 31, 2016: K € 372). The Company does not engage in speculative hedging for investment purposes. As at December 31, 2017, and at December 31, 2016, no contracts held by the Company had a maturity date greater than one year. As at December 31, 2017, the Company has entered into foreign currency forward contracts (South Korean Won) totaling € 1.6 mil- lion (December 31, 2016, U.S. dollar and South Korean Won: € 35.2 million). Pfeiffer Vacuum performs ongoing credit evaluations of the parties to these contracts and enters into contracts only with well-established ﬁnancial institutions. Currency risks as deﬁned by IFRS 7 arise as a result of ﬁnancial instruments being denomi- nated in a currency that is not the functional currency and being of a monetary nature; differences resulting from the translation of ﬁnancial statements into the Group’s presentation currency are not taken into consideration. Relevant risk variables are generally all non-functional currencies in which Pfeiffer Vacuum has entered into ﬁnancial instruments. The vast majority of non-derivative monetary ﬁnancial instruments within the Pfeiffer Vacuum Group are directly denominated in functional currency. In variance there- to, exchange rate risks arise from the securities available-for-sale, from a portion of trade accounts receivable, and from derivative ﬁnancial instruments. If derivative ﬁnancial instruments classify as cash ﬂow hedges, changes in the exchange rate do not impact the income statement but are recorded directly in equity. Exchange rate-based changes in securities available-for-sale are also recorded directly in equity. Had the euro, as at December 31, 2017, depreciated 10 %, net income would have been higher by K € 2,473. A 10 % appreciation in the euro as at that balance sheet date would have decreased net income by K € 1,992. Had the euro, as at December 31, 2016, depreciated 10 %, net income would have been higher by K € 2,442 and total equity higher by K € 645. A 10% appreciation in the euro as at December 31, 2016, would have decreased net income by K € 2,143 and total equity decreased by K € 863. In all cases, net income and equity were affected mostly by the sensitivity of the U.S. dollar which is predominantly material for the Consolidated Financial Statements.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 123 Composition of ﬁnancial instruments The following tables show the composition of ﬁnancial instruments by balance sheet line item and valuation category and fair value as well as net results by valuation category. COMPOSITION OF FINANCIAL INSTRUMENTS AS AT DECEMBER 31, 2017 in K € Assets Cash and cash equivalents Trade accounts receivable Other ﬁnancial assets Derivative ﬁnancial instruments (hedges) Liabilities Trade accounts payable Financial liabilities Derivative ﬁnancial instruments (incl. hedges) Derivative ﬁnancial instruments (excl. hedges) Totals by valuation categories: Loans and Receivables (LaR) Held-to-Maturity Investments (HtM) Financial Assets Available for Sale (AfS) Financial Assets Held for Trading (FAHfT) Financial Liabilities Measured at Amortized Cost (FLAC) Financial Liabilities Held for Trading (FLHfT) Amounts Recognized According to IAS 39 Category According to IAS 39 Net Book Value Amortized Cost Fair Value Recognized in Equity Fair Value Through Proﬁt and Loss Fair Value LaR LaR LaR n/a FLAC FLAC n/a n/a 97,402 80,061 3,840 — 40,814 60,329 — 6 97,402 80,061 3,840 — 40,814 60,329 — — 181,303 181,303 — — — — — — 101,143 — 101,143 — — — — — — — — -— — — — — — — — — — — — — — 6 — — — — — — 97,402 80,061 3,840 — 40,814 60,329 — 6 181,303 — — — 101,143 —

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124 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets COMPOSITION OF FINANCIAL INSTRUMENTS AS AT DECEMBER 31, 2016 in K € Assets Cash and cash equivalents Trade accounts receivable Other ﬁnancial assets Derivative ﬁnancial instruments (hedges) Liabilities Trade accounts payable Financial liabilities Derivative ﬁnancial instruments (incl. hedges) Derivative ﬁnancial instruments (excl. hedges) Totals by valuation categories: Loans and Receivables (LaR) Held-to-Maturity Investments (HtM) Financial Assets Available for Sale (AfS) Financial Assets Held for Trading (FAHfT) Financial Liabilities Measured at Amortized Cost (FLAC) Financial Liabilities Held for Trading (FLHfT) Amounts Recognized According to IAS 39 Category According to IAS 39 Net Book Value Amortized Cost Fair Value Recognized in Equity Fair Value Through Proﬁt and Loss Fair Value LaR LaR LaR n/a FLAC FLAC n/a n/a 110,032 69,352 4,508 — 30,896 224 588 372 110,032 69,352 4,508 — 30,896 224 — — 183,892 183,892 — — — 31,120 — — — — 31,120 — — — — — — — 588 — — — — — — — — — — — — — — 372 — — — — — — 110,032 69,352 4,508 — 30,896 224 588 372 183,892 — — — 31,120 — NET RESULTS BY VALUATION CATEGORY in K € Loans and Receivables (LaR) Held-to-Maturity-Investments (HtM) Financial Assets Available-for-Sale (AfS) Financial Assets Held for Trading (FAHfT) Financial Liabilities Measured at Amortized Cost (FLAC) Financial Liabilities Held for Trading (FLHfT) From Subsequent Valuation Net Results From Interest/ Dividends At Fair Value Currency Translation Impairment/ Reversal of Impairment From Derecognition 2017 2016 347 — — — – 684 — — — — — — — – 2,967 – 700 — — — — — — — — — — 313 — — — — — – 3,007 — — — – 684 — 542 — — — – 644 —

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Pfeiffer Vacuum Technology AG – Annual Report 2017 125 Determination of fair values of ﬁnancial instruments Determination of the fair value of derivative ﬁnancial instruments (K € – 6 as at December 31, 2017; K € – 960 as at December 31, 2016) was done according to level 2 of the fair value hierarchy as set out in IFRS 13 “Fair Value Measurement” using accepted valuation principles and directly obtainable and up-to-date market parameters. Determination of fair value of ﬁnancial liabilities with variable inter- est rates is based on the assumption that agreed interest rates equal the rates customary in the market. Accordingly, the net book values correspond to their fair values. Due to the underlying short terms fair values of trade accounts receivable and payable, other accounts receivable and payable and cash and cash equivalents equal their respective net book values. Maturity of ﬁnancial instruments The following table shows the maturity of ﬁnance liabilities accord- ing to expiry date classes based on the maturity as of the balance sheet date. This analysis only relates to ﬁnancial instruments and ﬁnance lease liabilities and includes undiscounted cash-ﬂows. Reconciliation to the amounts in the balance sheet is thus basically not possible. MATURITIES AS OF DEC. 31, 2017 in K € Financial liabilities Finance lease liabilities Trade accounts payable MATURITIES AS OF DEC. 31, 2016 in K € Financial liabilities Finance lease liabilities Trade accounts payable up to 1 year 1 year up to 5 years > 5 years 5 76 40,814 60,000 281 — — — — up to 1 year 1 year up to 5 years > 5 years 224 — 30,896 — — — — — — Total 60,005 357 40,814 Total 224 — 30,896

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126 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Notes to the Consolidated Balance Sheets | Additional Notes and Supplemental Information 33. Management of ﬁnancial risks With an equity ratio of 58.0 % as at December 31, 2017, even after the partly externally funded acquisitions, Pfeiffer Vacuum still has an equity base that is high. Additionally, cash and cash equivalents totaled € 97.4 million as at December 31, 2017. Despite the ﬁnancial liabilities taken out totaling € 60.2 million as of December 31, 2017 (December 31, 2016: –) the Group shows no indebtedness on a net basis. Again, the required liquidity range to successfully develop Pfeiffer Vacuum does exist. Liquid assets are invested on a short-term conservative basis. Due to its high equity ratio and its good liquidity, Pfeiffer Vacuum will not depend upon interest-bearing liabilities to fund its capital expenditures for replacement and expansion or the dividend pay- ment. Moreover, there are sufﬁcient liquidity reserves to respond to changes in the economic situation. 34. Earnings per share COMPUTATION OF EARNINGS PER SHARE in K € 2017 2016 Net income (in K €) 53,848 47,032 Weighted average number of shares 9,867,659 9,867,659 Number of conversion rights Adjusted weighted average number of shares -— — 9,867,659 9,867,659 Earnings per share in € (basic/diluted) 5.46 4.77 There were no transactions with ordinary shares or ordinary shares issued during the period between the balance sheet date of December 31, 2017, and the preparation of the Consolidated Financial Statements. Additional Notes and Supplemental Information 35. Related party disclosures Related party transactions predominantly consist of all transactions with those companies included in the Consolidated Financial Statements. The amounts of these transactions are detailed in the segment reporting in Note 31, which also includes intercompany sales. All transactions are carried out at conditions that are usual and customary in the market and are entirely eliminated during the consolidation process. Therefore, there is no impact on ﬁnancial position or results. Pfeiffer Vacuum does not have holdings in any jointly controlled entities. Furthermore, no control exists with re- spect to special purpose entities. Please refer to Notes 39 and 40 regarding the compensation paid to the members of the Management and Supervisory Board, as well as regarding potential transactions with members of these corporate bodies. Aside from their activities on the Supervisory Board, the members of the Supervisory Board do not provide individual services for the Group or any of its companies. In con- trast thereto, the employee representatives on the Supervisory Board receive salaries under the rules of the respective employ- ment contracts for their work at the Company. In 2017, the reimbursements from Pfeiffer Vacuum Trust e. V. amounted to € 2.4 million (2016: € 2.8 million). Contributions to Pfeiffer Vacuum Trust e. V. totaled € 3.0 million in 2017 and 2016. The law ﬁrm of Menold Bezler Partnerschaft, Stuttgart, was con- tracted on the basis of usual and customary terms and conditions, to perform consulting projects. The expenses recorded in this context totaled € 0.1 million as at December 31, 2017 (2016: € 0.3 million). The Chairman of the Supervisory Board Dr. Michael Oltmanns, who resigned on October 25, 2017, is a partner in that ﬁrm. As of December 31, 2017, Dr. Karl Busch, Ms. Ayhan Busch, Ms. Ayla Busch, Mr. Sami Busch, and Mr. Kaya Busch, all Germany, together had 38.96 % of the voting rights of the Company accord- ing to their own statements (December 31, 2016: 27.19 %). The shares are indirectly held through Pangea GmbH, Maulburg, Ger- many, and further independent legal entities belonging to the family-run Busch group. Based on unchanged arm’s length condi- tions, goods in an aggregated purchasing value of a very low single digit million Euro amount were received from an operating com- pany of the Busch group in the ﬁscal years 2017 and 2016.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 127 Members of the Management and Supervisory Boards held an aggregate total of 3,846,765 shares of the Company as at Decem- ber 31, 2017 (2016: 5,177). The change resulted from the share- holdings of Busch group which are also attributable to the new Chairwoman of the Supervisory Board Ayla Busch. 36. Events after the balance sheet date The Management Board and Supervisory Boards of Pfeiffer Vacuum have decided on a new strategy supporting three year investment plan, providing for signiﬁcantly increased annual investments, with a total volume of € 150 million. Since the beginning of the 2018 ﬁscal year, there have not been any signiﬁcant changes in the industry environment. 37. Personnel expenses PERSONNEL EXPENSES in K € 2017 2016 Wages and salaries Social security, pension and other beneﬁt cost Thereof for pensions Total – 157,709 – 127,725 – 33,261 – 16,395 – 190,970 – 29,893 – 14,494 – 157,618 38. Number of employees The number of employees was as follows as at December 31, 2017, and 2016: NUMBER OF EMPLOYEES Annual average Male Female Total Balance sheet date Male Female Total 2017 2016 2,330 479 2,809 2,440 505 2,945 1,981 404 2,385 2,016 399 2,415 The number of employees includes apprentices (December 31, 2017: 113, previous year: 86). 39. Management Board Since November 27, 2017, the Management Board has consisted of Dr. Eric Taberlet (Chief Executive Ofﬁcer), Diploma in Engineer- ing, Nathalie Benedikt (Chief Financial Ofﬁcer), Diploma in Business Administration, Dr. Ulrich von Hülsen, Diploma in Physics, and Dr. Matthias Wiemer, Diploma in Engineering. On that date, the Supervisory Board appointed Dr. Taberlet as Chairman of the Management Board. On the same date, Nathalie Benedikt was appointed as the Chief Financial Ofﬁcer. Parallel to the appointment of Dr. Taberlet and Mrs. Benedikt, the former Chairman of the Management Board, Mr. Manfred Bender, was dismissed for good cause. Already effective August 1, 2017, the Supervisory Board has appointed Dr. Ulrich von Hülsen as an additional member of the Management Board. Total short-term beneﬁts recorded in the income statement for the aforesaid members of the Management Board for ﬁscal 2017 were € 1.4 million; thereof € 0.5 million short-term variable beneﬁts (2016: € 1.7 million, and € 1.0 million, respectively). Short-term variable beneﬁts recorded in the income statement in 2016 were paid out in 2017. Total pensions expenses in 2017 were again € 0.5 million. Pursuant to § 289a, Sub-Para. 2, Sentence 2, German Commercial Code (“HGB”) or § 315a, Sub-Para. 2, Sentence 2, German Com- mercial Code (“HGB”), the compensation paid to the members of the Management Board is detailed in the compensation report (an element of MD & A). Additionally, the distribution of responsibili- ties within the Management Board is shown in MD&A. Beneﬁts to former members of the Management Board (pensions) again amounted to € 0.4 million. 40. Supervisory Board Pursuant to § 96, Sub-Para. 1, § 101, Sub-Para. 1, German Stock Corporation Act (“AktG”), § 4, German One-Third Participation Act (“DrittelbG”) of 2004, and § 9, Sub-Para. 1, Articles of Association and Bylaws, the Supervisory Board comprises four members elected by the Annual Shareholders Meeting and two members elected by the Company’s employees. Upon resignation of former Supervisory Board members Dr. Michael Oltmanns and Dr. Wolfgang Lust on October 25, 2017, a judicial appointment of two Supervisory Board members was to take place upon request of major shareholder Pangea GmbH, Maulburg, effective October 26, 2017 until the next Annual General Meeting. The court, however, only granted the request to the extent that Ayla Busch, who also sought the position of Supervisory Board Chair, was appointed as a member of the Supervisory Board. The constituent meeting of the Supervisory Board thus took place with ﬁve Board members on October 26, 2017 and Ayla Busch was voted Chairwoman of the Supervisory Board. The vacant Board position is to be newly ﬁlled not later than at the Annual General Meeting in May 2018.

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128 N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S Additional Notes and Supplemental Information During the course of 2017, the Supervisory Board comprised the following persons: ¡ Ayla Busch (Chairwoman), since October 26, 2017 Co-CEO Busch SE, Maulburg ¡ Dr. Michael Oltmanns (Chairman), until October 25, 2017 Attorney at Law and Tax Advisor ¡ Götz Timmerbeil (Vice Chairman), Certiﬁed Public Accountant and Tax Advisor ¡ Filippo Th. Beck, Attorney at Swiss Law, Dr. Michael Oltmanns (Supervisory Board Member until October 25, 2017) exercised the following supervisory board mandates in 2017: ¡ Becker Mining Systems AG, Friedrichsthal (chairman), ¡ HPC AG, Mannheim (chairman), ¡ Kathrein SE, Rosenheim (chairman of the supervisory body) Pursuant to § 289a, Sub-Para. 2, Sentence 2, German Commercial Code (“HGB”) or § 315a, Sub-Para. 2, Sentence 2, German Com- mercial Code (“HGB”), the compensation paid to the members of the Supervisory Board is detailed in the compensation report (an element of MD & A). ¡ Helmut Bernhardt (Employee Representative), German Commercial Code (“HGB”) 41. Exempting provision under § 264 Sub-Para. 3, Development Engineer ¡ Manfred Gath (Employee Representative), Chairman of the Employee Council ¡ Dr. Wolfgang Lust, until October 25, 2017 Entrepreneur The court appointment of Ms. Ayla Busch expires at the end of the next Annual General Meeting in May 2018. Götz Timmerbeil exercised the following supervisory board mandates in 2017: ¡ VfL Handball Gummersbach GmbH, Gummersbach (chairman of the advisory board) Pfeiffer Vacuum GmbH, Asslar, Germany, is included in the Con- solidated Financial Statements of Pfeiffer Vacuum Technology AG. Accordingly, this company has made use of the exempting provi- sion under § 264, Sub-Para. 3, German Commercial Code. 42. Audit fees for independent auditors The expenses for services rendered by the auditor of the Consoli- dated Financial Statements recorded in the statements of income were as follows for ﬁscal 2017 and 2016: AUDIT FEES FOR THE AUDITOR OF THE CONSOLIDATED FINANCIAL STATEMENTS ¡ Arena Gummersbach GmbH & Co. KG, Gummersbach in K € (vice chairman) Filippo Th. Beck exercised the following supervisory organ mandates in 2017: ¡ Candoria Group, Baar (Switzerland), member of supervisory organ of Candoria Holding AG, president of the supervisory organ of Progresa Holding AG and of Candoria Luxemburg Holding SA, Luxembourg ¡ Tenro Group, Bottmingen (Switzerland), member of the supervisory organ in various group companies ¡ Biamathea AG, Basel (Switzerland), member of supervisory organ ¡ Polyterra Liegenschaften AG in liquidation, Küsnacht (Switzerland), member of supervisory organ and liquidator ¡ IKFE Properties I AG, Zürich (Switzerland), president of supervisory organ ¡ Tainn-Immobilien AG, Bern (Switzerland), member of supervisory organ Fees resulting from: Audit services Other certiﬁcation and consulting services Tax advisory services Other services Total 2017 2016 – 1,121 – 27 – 6 — – 1,154 – 804 – 10 – 32 — – 846 The total amount included fees from afﬁliates of the auditor of the Consolidated Financial Statements of K € 340 (2016: K € 378).

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Pfeiffer Vacuum Technology AG – Annual Report 2017 129 43. German Corporate Governance Code/Declaration 44. Authorization for issuance of Consolidated Financial pursuant to § 161, German Stock Corporation Act (“AktG”) Statements Through a resolution by the Management Board on March 16, 2018, the Consolidated Financial Statements were authorized for issuance. Asslar, March 16, 2018 The Management Board Dr. Eric Taberlet Nathalie Benedikt Dr. Matthias Wiemer Dr. Ulrich von Hülsen The recommendations and suggestions contained in the Code have been a ﬁrm element of our corporate governance for many years. Pursuant to § 161 of the German Stock Corporation Act, the Management and Supervisory Boards issued the statement of compliance for the year 2017 on October 26, 2017, amended January 24, 2018, and made it permanently available for share- holders and interested parties at the Company’s homepage (group.pfeiffer-vacuum.com). With the following two exceptions, this statement reﬂects com- pliance with the recommendations of the German Corporate Gov- ernance Code Government Commission as amended in February 2017: ¡ The German Corporate Governance Code recommends a de- termined limit to the duration of a member’s participation in the Supervisory Board (item 5.4.1). The Supervisory Board does not regard the duration of a member’s participation as an attri- bute which speciﬁcally qualiﬁes a candidate for any position and therefore disregards this criterion when selecting the most suitable candidate. ¡ The German Corporate Governance Code recommends that variable remuneration components for members of the Manage- ment Board should in principle have a multi-year assessment basis which is essentially future-oriented (Paragraph 4.2.3). How- ever, the regulation on variable remuneration, which is applied for Manfred Bender, Dr. Ulrich von Hülsen und Dr. Matthias Wiemer, does not provide for an “essentially future-oriented” assessment basis. This deviation is based on the fact that the provision of the Code was newly created until February 2017 and the contracts were not able to be amended in the mean- time. However, an adjustment by the Supervisory Board will be made in the near future. The full text of the Code is available at the following Internet address: www.corporate-governance-code.de.

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130 C E R T I F I C A T I O N O F L E G A L R E P R E S E N T A T I V E S | I N D E P E N D E N T A U D I T O R S ’ R E P O R T CERTIFICATION OF LEGAL REPRESENTATIVES To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, liabilities, ﬁnancial position and proﬁt or loss of the Group, and the Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group. Asslar, March 16, 2018 The Management Board Dr. Eric Taberlet Nathalie Benedikt Dr. Matthias Wiemer Dr. Ulrich von Hülsen

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Pfeiffer Vacuum Technology AG – Annual Report 2017 131 INDEPENDENT AUDITORS’ REPORT To Pfeiffer Vacuum Technology AG Report on the audit of the consolidated ﬁnancial statements and of the group management report Opinions We have audited the consolidated ﬁnancial statements of Pfeiffer Vacuum Technology AG, Asslar, and its subsidiaries (the Group), which comprise the consolidated income statement and consolidated statement of comprehensive income for the ﬁscal year from 1 January to 31 December 2017, and the consolidated statement of ﬁnancial position as at 31 December 2017, consolidated statement of changes in equity and consolidated statement of cash ﬂows for the ﬁscal year from 1 January to 31 December 2017, and notes to the consolidated ﬁnancial statements, including a summary of signiﬁcant accounting policies. In addition, we have audited the group management report of Pfeiffer Vacuum Technology AG for the ﬁscal year from 1 January to 31 December 2017. In accordance with the German legal requirements, we have not audited the content of the consolidated corporate governance statement contained in the group management report or the declaration pursuant to Sec. 161 AktG [“Aktiengesetz”: German Stock Corporation Act] contained therein. In our opinion, on the basis of the knowledge obtained in the audit, ¡ the accompanying consolidated ﬁnancial statements comply, in all material respects, with the IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB [“Handelsgesetzbuch”: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and ﬁnancial position of the Group as at 31 December 2017, and of its ﬁnancial performance for the ﬁscal year from 1 January to 31 December 2017, and ¡ the accompanying group management report as a whole provides an appropriate view of the Group’s position. In all material respects, this group management report is consistent with the consolidated ﬁnancial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our opinion on the group management report does not cover the content of the consolidated corporate governance statement or the declaration pursuant to Sec. 161 AktG contained therein. Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated ﬁnancial statements and of the group management report. Basis for the opinions We conducted our audit of the consolidated ﬁnancial statements and of the group management report in accordance with Sec. 317 HGB and the EU Audit Regulation (No 537/2014, referred to subsequently as “EU Audit Regulation”) and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our responsibilities under those requirements and principles are further described in the “Auditor’s responsibilities

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132 I N D E P E N D E N T A U D I T O R S ’ R E P O R T for the audit of the consolidated ﬁnancial statements and of the group management report” section of our auditor’s report. We are independent of the group entities in accordance with the requirements of European law and German commercial and professional law, and we have fulﬁlled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinions on the consolidated ﬁnancial statements and on the group management report. Key audit matters in the audit of the consolidated ﬁnancial statements Key audit matters are those matters that, in our professional judgment, were of most signiﬁcance in our audit of the consolidated ﬁnancial statements for the ﬁscal year from 1 January to 31 December 2017. These mat- ters were addressed in the context of our audit of the consolidated ﬁnancial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters. Below, we describe what we consider to be the key audit matters: 1. Acquisition of Nor-Cal Reasons why the matter was determined to be a key audit matter Under an agreement dated 22 June 2017, 100% of the shares in Nor-Cal were acquired for a price of EUR 64.4m. From the acquisition date, Nor-Cal will be included as a subsidiary in the consolidated ﬁnancial statements for the ﬁrst time as at 31 December 2017. In connection with the purchase price allocation, goodwill of EUR 20.8m was recognized in the consolidated ﬁnancial statements. The acquisition is signiﬁcant for the consolidated ﬁnancial statements from a quantitative perspective and is subject to a complex account- ing framework. In addition, the determination of the fair values of the assets and liabilities and the purchase price allocation involve a number of signiﬁcant assumptions and judgment by the executive directors, both of which are subject to high estimation uncertainty. Consequently, the accounting for the acquisition is considered a key audit matter. The management board of Pfeiffer Vacuum engaged a valuation expert for the required valuation and purchase price allocation. Auditor’s response In our audit of the accounting for the acquisition, we assessed the purchase agreement and tested the pay- ment of the purchase price to the seller. We also engaged valuation experts to examine the valuation model used to determine the fair values of the identiﬁable assets and liabilities assumed with regard to its method- ology and arithmetical accuracy. This also includes comparing the budget used with the forecast that was the relevant basis for the decision to make the purchase. A further key area of our audit procedures was an examination of the completeness and valuation of the identiﬁed and acquired assets and liabilities assumed. Taking our knowledge of the business of Nor-Cal and the comments and plans of the executive directors into account, we obtained an understanding of the identiﬁcation of the assets and liabilities assumed based on the report compiled by the valuation expert. We interviewed the executive directors on the signiﬁcant assumptions used for determining the fair values and examined these by conducting analytical procedures using available industry and market information. Our examination of the assumptions used included in par- ticular the derivation of the cost of capital and underlying discount rate.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 133 In addition, we visited the most signiﬁcant of the acquired production sites in order to satisfy ourselves of the existence and condition of the acquired non-current assets and inventories. Our audit procedures did not lead to any reservations relating to the accounting for the acquisition of Nor-Cal. Reference to related disclosures For information on the accounting and valuation bases applied for the acquisition of Nor-Cal, see the dis- closure in the notes to the consolidated ﬁnancial statements contained in section “4. Accounting policies.” The related information on judgments by the management board and sources of estimation uncertainty is also contained in section “4. Accounting policies” of the notes to the consolidated ﬁnancial statements. See also the explanations on the basis of consolidation in section “5. Basis of consolidation” and section “6. Changes in the basis of consolidation” in the notes to the consolidated ﬁnancial statements. 2. Valuation of goodwill Reasons why the matter was determined to be a key audit matter In the consolidated ﬁnancial statements as at 31 December 2017, the Company reports goodwill of EUR 79.3m from acquisitions. Goodwill is tested for impairment as at 31 December each year. The impairment test carried out by the Company is based on assumptions, involves judgment and is subject to estimation uncertainty. Due to the materiality of the goodwill recognized and the complexity of the accounting framework to be applied, the assessment of the adequate valuation of goodwill is considered a key audit matter. Auditor’s response During our audit, we engaged valuation experts to test the method used to perform the impairment test. We examined the cash ﬂow projections underling the impairment test by assessing the underlying assump- tions in terms of the reliability of past forecasts. The assumptions pertaining to future cash ﬂows were also compared with the actual business performance (plausibility test). We also examined whether the forecasts were coherent overall and were correctly derived from the past and the current budget, and whether they are consistent with general industry-speciﬁc market expectations. Since merely marginal changes in the discount rate can have a signiﬁcant effect on the value of the relevant cash-generating units, we also assessed the parameters used to determine the discount rate and checked both the calculation method and arithmetic. We also performed sensitivity analyses in order to estimate a potential impairment risk associated with a possible change in one of the signiﬁcant assumptions used in the valuation. Our procedures did not lead to any reservations relating to the valuation of goodwill.

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134 I N D E P E N D E N T A U D I T O R S ’ R E P O R T Reference to related disclosures For information on the accounting and valuation bases applied for goodwill, see the disclosure in the notes to the consolidated ﬁnancial statements contained in section “4. Accounting policies.” The related information on judgments by the management board and sources of estimation uncertainty is also contained in section “4. Accounting policies” of the notes to the consolidated ﬁnancial statements. See also the explanations in section “10. Intangible assets” for information on goodwill. 3. Recognition and measurement of actual and deferred taxes Reasons why the matter was determined to be a key audit matter The Pfeiffer Vacuum Group is a global group with a number of legally independent subsidiaries that are sub- ject to the tax regulations of different jurisdictions. With regard to the assessment of taxes, the recognition and measurement of actual and deferred taxes are therefore particularly complex, resulting in an elevated risk of misstatement. Due in particular to the judgment required to assess tax matters and risks within the Group and to identify temporary differences as well as assess whether deferred tax assets resulting from temporary differences can be used in the future, the recognition and measurement of actual and deferred taxes is considered a key audit matter. Auditor’s response We tested the plausibility of the calculation of signiﬁcant actual tax items and checked both the method and arithmetic. We also evaluated in particular the correspondence with the taxation authorities and the results of the tax audits in order to assess the recognition and measurement of the income tax liabilities stated in the consolidated ﬁnancial statements. We examined the completeness and accuracy of the identiﬁed temporary differences taking the local tax recognition and measurement differences into account and veriﬁed the calculation of the deferred tax assets and liabilities derived therefrom. We also examined the tax rates applicable to the various jurisdictions and assessed the plausibility of the deferred tax assets and liabilities based on an analysis of the prior-year ﬁgures and group tax rate. To examine the underlying value of deferred tax assets, we critically reviewed the related assumptions by the executive directors on the future taxable result in respect of which unused tax losses or tax credits can be used based on the signiﬁcant tax fore- casts. We assessed the information on actual and deferred taxes in the notes to the consolidated ﬁnancial statements in accordance with the provisions of IAS 12. Due to the particular complexity and expertise required, we engaged experts to assess the accurate account- ing treatment and measurement of signiﬁcant tax matters and the relevant disclosures in the notes to the consolidated ﬁnancial statements for all of the Group’s major subsidiaries. The experts involved in the audit through our international network reported to us on the ﬁndings from their audit procedures. Our procedures did not lead to any reservations relating to the recognition and measurement of current and deferred taxes.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 135 Reference to related disclosures For information on the accounting and valuation bases applied for income taxes, see the disclosure in the notes to the consolidated ﬁnancial statements contained in section “4. Accounting policies.” The related information on judgments by the management board and sources of estimation uncertainty is also contained in section “4. Accounting policies” of the notes to the consolidated ﬁnancial statements. See also the explanations in section “24. Income taxes” for information on actual and deferred taxes. Other information The supervisory board is responsible for the supervisory board’s report pursuant to Sec. 171 (2) AktG. In all other respects, the executive directors are responsible for the other information. The other information com- prises the consolidated corporate governance statement pursuant to Sec. 315d HGB included as a separate section in the group management report and the declaration pursuant to Sec. 161 AktG contained therein. The other information also comprises the responsibility statement pursuant to Sec. 297 (2) Sentence 4 HGB included in the annual report, of which we obtained a version prior to issuing this auditor’s report. In addition, the other information comprises the following sections of the annual report that we expect to be provided to us after we have issued our auditor’s report: ¡ Letter from the CEO ¡ Supervisory board’s report pursuant to Sec. 171 (2) AktG ¡ Other sections of the annual report Our opinions on the consolidated ﬁnancial statements and on the group management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance con- clusion thereon. In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information ¡ is materially inconsistent with the consolidated ﬁnancial statements, with the group management report or our knowledge obtained in the audit, or ¡ otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report with regard to the other information already provided to us.

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136 I N D E P E N D E N T A U D I T O R S ’ R E P O R T Responsibilities of the executive directors and the supervisory board for the consolidated ﬁnancial statements and the group management report The executive directors are responsible for the preparation of the consolidated ﬁnancial statements that com- ply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB, and that the consolidated ﬁnancial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, ﬁnancial position, and ﬁnancial performance of the Group. In addition, the executive directors are responsible for such internal control as they have determined necessary to enable the preparation of consolidated ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated ﬁnancial statements, the executive directors are responsible for assessing the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for ﬁnancial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so. Furthermore, the executive directors are responsible for the preparation of the group management report that, as a whole, provides an appropriate view of the Group’s position and is, in all material respects, consistent with the consolidated ﬁnancial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a group management report that is in accordance with the applicable German legal requirements, and to be able to provide sufﬁcient appropriate evidence for the assertions in the group management report. The supervisory board is responsible for overseeing the Group’s ﬁnancial reporting process for the preparation of the consolidated ﬁnancial statements and of the group management report. Auditor’s responsibilities for the audit of the consolidated ﬁnancial statements and of the group management report Our objectives are to obtain reasonable assurance about whether the consolidated ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the group manage- ment report as a whole provides an appropriate view of the Group’s position and, in all material respects, is consistent with the consolidated ﬁnancial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated ﬁnancial statements and on the group management report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accor- dance with Sec. 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these consolidated ﬁnancial statements and this group management report.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 137 We exercise professional judgment and maintain professional skepticism throughout the audit. We also ¡ Identify and assess the risks of material misstatement of the consolidated ﬁnancial statements and of the group management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufﬁcient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ¡ Obtain an understanding of internal control relevant to the audit of the consolidated ﬁnancial statements and of arrangements and measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems. ¡ Evaluate the appropriateness of accounting policies used by the executive directors and the reasonable- ness of estimates made by the executive directors and related disclosures. ¡ Conclude on the appropriateness of the executive directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or con - ditions that may cast signiﬁcant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the consolidated ﬁnancial statements and in the group management report or, if such dis- closures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern. ¡ Evaluate the overall presentation, structure and content of the consolidated ﬁnancial statements, including the disclosures, and whether the consolidated ﬁnancial statements present the underlying transactions and events in a manner that the consolidated ﬁnancial statements give a true and fair view of the assets, liabilities, ﬁnancial position and ﬁnancial performance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB. ¡ Obtain sufﬁcient appropriate audit evidence regarding the ﬁnancial information of the entities or business activities within the Group to express opinions on the consolidated ﬁnancial statements and on the group management report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinions. ¡ Evaluate the consistency of the group management report with the consolidated ﬁnancial statements, its conformity with [German] law, and the view of the Group’s position it provides.

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138 I N D E P E N D E N T A U D I T O R S ’ R E P O R T ¡ Perform audit procedures on the prospective information presented by the executive directors in the group management report. On the basis of sufﬁcient appropriate audit evidence we evaluate, in particular, the signiﬁcant assumptions used by the executive directors as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signiﬁcant audit ﬁndings, including any signiﬁcant deﬁciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, the related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most signiﬁcance in the audit of the consolidated ﬁnancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.

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Pfeiffer Vacuum Technology AG – Annual Report 2017 139 Other legal and regulatory requirements Further information pursuant to Art. 10 of the EU Audit Regulation We were elected as group auditor by the annual general meeting on 23 May 2017. We were engaged by the supervisory board on 21 June 2017. We have been the group auditor of Pfeiffer Vacuum Technology AG with- out interruption since ﬁscal year 2004. We declare that the opinions expressed in this auditor’s report are consistent with the additional report to the audit committee pursuant to Art. 11 of the EU Audit Regulation (long-form audit report). German Public Auditor responsible for the engagement The German Public Auditor responsible for the engagement is Jörg Bösser. Eschborn/Frankfurt am Main, March 16, 2018 Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft Bösser Wirtschaftsprüfer (German Public Auditor) Schier Wirtschaftsprüfer (German Public Auditor)

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Pfeiffer Vacuum Technology AG – Annual Report 2017 141 Germany France Austria Republic of Korea Pfeiffer Vacuum Technology AG Pfeiffer Vacuum GmbH Berliner Straße 43 35614 Asslar T +49 64 41 802 0 F +49 64 41 802 1202 info@pfeiffer-vacuum.de Pfeiffer Vacuum GmbH Sales & Service Am Kreuzeck 10 97877 Wertheim T +49 9342 9610 0 F +49 9342 9610 30 info@pfeiffer-vacuum.de Pfeiffer Vacuum Components & Solutions GmbH Anna-Vandenhoeck-Ring 44 37081 Göttingen T +49 551 99963 0 F +49 551 99963 10 info-cs@pfeiffer-vacuum.de DREEBIT GmbH Zur Wetterwarte 50, Haus 301 01109 Dresden T +49 351 2127001 0 F +49 351 2127001 80 info@dreebit.com Benelux Pfeiffer Vacuum Benelux B. V. Newtonweg 11 4104 BK Culemborg The Netherlands T +31 345 478 400 F +31 345 531 076 ofﬁce@pfeiffer-vacuum.nl Pfeiffer Vacuum Ltd. 16 Plover Close, Interchange Park Newport Pagnell, MK16 9PS England T +44 1908 500 600 F +44 1908 500 601 sales@pfeiffer-vacuum.co.uk India Pfeiffer Vacuum (India) Private Ltd. 25/5 Nicholson Road, Tarbund Secunderabad 500 009 T +91 40 2775 0014 F +91 40 2775 7774 pvin@pfeiffer-vacuum.in Italy Pfeiffer Vacuum Italia S. p. A. Via Luigi Einaudi 21 20037 Paderno Dugnano (MI) T +39 02 939905 1 F +39 02 939905 33 contact@pfeiffer-vacuum.it China Malaysia Pfeiffer Vacuum (Shanghai) Co., Ltd. Unit B, 5th Floor, Building 3# Youyou Century Plaza 428 South Yanggao Road 200127 Shanghai T +86 21 3393 3940 F +86 21 3393 3944 info@pfeiffer-vacuum.cn Pfeiffer Vacuum Malaysia Sdn. Bhd. Lot 10, SMI Park Phase 2 Jalan Hi-Tech 4 Sambungan 09000 Kulim Malaysia Pfeiffer Vacuum SAS BP N° 2069 – 98, avenue de Brogny 74009 Annecy CEDEX T +33 4 50 65 77 77 F +33 4 50 65 77 89 info@pfeiffer-vacuum.fr Pfeiffer Vacuum Austria GmbH Diefenbachgasse 35 1150 Vienna T +43 1 8941704 F +43 1 8941707 ofﬁce@pfeiffer-vacuum.at United Kingdom Romania Pfeiffer Vacuum Korea Ltd. 7F, Hyundai Green Food, 30, Munin-ro, Suji-gu, Yongin-si, Gyeonggi-Do, 16827 T +82 31 266 0741 F +82 31 266 0747 sales@pfeiffer-vacuum.co.kr Pfeiffer Vacuum Semi Korea, Ltd. 12F, 53, Metapolis-ro, Hwasung-si, Gyeonggi-do 18454 T +82 31 8014 7200 F +82 31 8014 7227 sales@pfeiffer-vacuum.kr Taiwan Pfeiffer Vacuum Taiwan Corporation Ltd. No. 169-9, Sec. 1, Kang-Leh Road Song-Lin Village, Hsin-Feng 30444 Hsin-Chu County – Taiwan, R.O.C. T +886 3 559 9230 F +886 3 559 9232 info@pfeiffer-vacuum.tw USA Pfeiffer Vacuum Inc. 24 Trafalgar Square Nashua, NH 03063-1988 T +1 603 578 6500 F +1 603 578 6550 contact@pfeiffer-vacuum.com Nor-Cal Products, Inc. 1967 South Oregon Street Yreka, CA 96097 T +1 800 824-4166 F +1 530 842-9130 ncsales@n-c.com Advanced Test Concepts, LLC 4037 Guion Lane Indianapolis, IN 46268 T +1 317 328-8492 F +1 317 328-2686 atc@atcinc.net Pfeiffer Vacuum Romania S.r.l. str. Luncii nr. 5A 400633 Cluj-Napoca T +40 372 649 614 F +40 372 649 601 info@pfeiffer-vacuum.ro Switzerland Pfeiffer Vacuum (Schweiz) AG Förrlibuckstraße 30 8005 Zurich T +41 44 444 2255 F +41 44 444 2266 info@pfeiffer-vacuum.ch Singapore Pfeiffer Vacuum Singapore Pte. Ltd. 49 Jalan Pemimpin #01-01/04 APS Industrial Building Singapore 577203 T +65 6254 0828 F +65 6254 7018 info@pfeiffer-vacuum.sg Scandinavia Pfeiffer Vacuum Scandinavia AB Johanneslundsvägen 3 19461 Upplands Väsby Sweden T +46 8 590 748 10 F +46 8 590 748 88 sales@pfeiffer-vacuum.se

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142 C O N S O L I D A T E D S T A T E M E N T S O F I N C O M E ( 6 - Y E A R - O V E R V I E W ) CONSOLIDATED STATEMENTS OF INCOME 6-YEAR-OVERVIEW in K € Net sales Cost of sales Gross proﬁt Selling and marketing expenses General and administrative expenses Research and development expenses Other operating income Other operating expenses Operating proﬁt Financial expenses Financial income Earnings before taxes Income taxes Net income Earnings per share (in €) 2017 2016 2015 2014 2013 2012 586,962 474,244 451,521 406,642 – 376,945 – 293,769 – 276,010 – 263,259 210,017 180,475 175,511 143,383 408,727 – 259,345 149,382 461,327 – 294,182 167,145 – 63,313 – 48,976 – 27,763 10,345 – 8,924 71,386 – 693 347 71,040 – 17,192 53,848 5.46 – 55,330 – 35,733 – 26,282 10,818 – 5,972 67,976 – 662 301 67,615 – 20,583 47,032 – 59,850 – 35,838 – 25,479 13,297 – 6,882 60,759 – 691 383 60,451 – 18,535 41,916 – 52,789 – 29,853 – 23,936 10,176 – 2,237 44,744 – 978 507 44,273 – 11,854 32,419 – 51,343 – 29,407 – 22,900 8,268 – 3,477 50,523 – 1,217 644 49,950 – 15,135 34,815 – 50,431 – 30,118 – 22,317 10,515 – 6,317 68,477 – 2,245 822 67,054 – 21,230 45,824 4.77 4.25 3.29 3.53 4.64 Number of shares (weighted average) 9,867,659 9,867,659 9,867,659 9,867,659 9,867,659 9,867,659 Proﬁtability ﬁgures Gross margin Operation proﬁt margin After-tax return on sales Sales by region Europe Asia The Americas Rest of world Sales by product Turbopumps Instruments and components Backing pumps Service Systems 35.8 % 12.2 % 9.2 % 222,547 220,304 143,808 303 173,419 160,621 132,767 107,800 12,355 38.1% 14.3% 9.9% 188,860 174,604 110,542 238 144,518 105,520 114,989 99,698 9,519 38.9 % 13.5 % 9.3 % 187,003 151,511 112,412 595 144,777 98,777 102,381 96,730 8,856 35.3 % 11.0 % 8.0 % 183,181 130,323 92,636 502 124,693 96,899 89,419 84,967 10,664 36.5 % 12.4 % 8.5 % 182,070 143,863 81,447 1,347 125,351 101,151 92,075 81,653 8,497 36.2 % 14.8 % 9.9 % 190,753 171,483 98,204 887 132,992 110,863 121,023 78,217 18,232

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FINANCIAL GLOSSARY Cash and cash equivalents Indicates the cash and cash equivalents provided by the various capital ﬂows and is the result of the cash ﬂow accounting. Gross proﬁt The result of net sales less cost of sales. Calculation: Net Sales – Cost of Sales Cash flow from ﬁnancing activities Indicates the balance of cash and cash equivalents provided to or used by a company in connection with transactions involving shareholders’ equity or outside capital. Market capitalization Indicates the current market value of a company’s shareholders’ equity on the stock exchange. Calculation: Number of Shares Outstanding x Trading Price Cash flow from investment activities Indicates the balance of cash and cash equivalents that a company has invested or received in connection with the acquisition or sale of ﬁnancial and tangible assets. Operating proﬁt (EBIT) Operating proﬁt (earnings) before interest and taxes. Calculation: Net Income ± Financial Income / Expenses ± Income Taxes ± Gain / Loss from Investment Cash flow from operating activities Indicates the change in cash and cash equivalents resulting from operative business during the period under review. Corporate governance The organizational structure and content of the way companies are managed and controlled. Dividend yield Indicates the ratio between a dividend and a deﬁned share trading price – typically the year-end trading price. The dividend yield expresses the magnitude of the effective yield of the capital invested in shares. Calculation: Dividend ÷ Trading Price x 100 Equity ratio Describes the relationship between shareholders’ equity and total capital. The more shareholders’ equity that is available to a company, the better its credit rating will typically be. Calculation: Shareholders’ Equity ÷ Balance Sheet Total x 100 Free-float The free-ﬂoat includes all shares that are not held by major shareholders; i. e. shares that can be acquired and traded by the general public. Under Deutsche Börse’s deﬁnition, shares totaling over 5 percent of total equity or over 25 percent held by invest- ment funds are not considered to be part of the free-ﬂoat. Gross margin Indicates the ratio between gross proﬁt and net sales, enabling conclusions to be drawn regarding a company‘s production efﬁciency. Calculation: Gross Proﬁt ÷ Net Sales x 100 Operating proﬁt margin (EBIT margin) The ratio between operating proﬁt and net sales – the higher the ratio, the higher the proﬁtability of operating activities. Calculation: Operating Proﬁt (EBIT) ÷ Net Sales x 100 Research and development expense ratio Is an expression of the relationship between the volume of research and development expenses and the volume of net income generated. Is thus considered to be an indicator of a company’s willingness to invest in its own innovation activities. Calculation: R & D Expenses ÷ Net Income x 100 Return on capital employed (ROCE) Ratio between operating proﬁt and the total capital employed during a period. Calculation: EBIT ÷ (Net) Assets + Working Capital x 100 Return on equity Provides information about the yield on the equity provided by shareholders. Calculation: Net Income ÷ Shareholders’ Equity x 100 Working capital A liquidity parameter that indicates the surplus of a company’s assets that are capable of being liquidated short term (within one year) over its short-term liabilities. Absolute calculation: Current Assets – Short-Term Borrowed Capital; Relative calculation: Current Assets ÷ Short-Term Borrowed Capital x 100

Pfeiffer Vacuum Annual Report 2017

Key Figures

Corporate Profile

Content

Letter from the Chief Executive Officer

Report of the Supervisory Board

International. United. Strong

Global Advantage: Interview with the new Management Board

International Growth

Worldwide Collaboration

Strong Roots

Vacuum Solutions

Product Portfolio

Share Performance

Financial Reporting Detailed Index

Management’s Discussion and Analysis / 2017 Course of Business

Economic Conditions 2017

The Pfeiffer Vacuum Group

Profitability, Financial Position, and Liquidity

Non-financial Performance Indicators

Corporate Governance Report and Declaration on the Corporate Governance

Risk and Opportunities Report

Subsequent Events / Outlook

Consolidated Financial Statements / Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

Certification of Legal Representatives

Independent Auditors’ Report

Addresses Worldwide

Consolidated Statements of Income (6-Year-Overview)

Contacts / Financial Calendar 2018

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