DGAP-News: paragon AG / Key word(s): Quarter Results

19.11.2014 / 09:58


paragon remains on growth trajectory

  - Consolidated revenue for paragon AG up by 7.2 percent after nine months

  - Operating earnings substantially higher year on year

  - Capital investment up to EUR4.5 million, three times the level of Q3

  - Electromobility: sustained heavy demand for large batteries

Delbrück, November 19, 2014: The revenue and earnings reported by paragon
AG for the first nine months of 2014 are still on track on the back of the
continuously satisfactory performance of its current business. Consolidated
revenue for the first three quarters of the year grew by 7.2 percent to
EUR56.0 million (Q1-Q3 2013: EUR52.2 million), consolidated revenue for the
third quarter at EUR18.2 million exceeded the previous year's figure of
EUR16.2 million by 10.0 percent. Although earnings before interest and tax
(EBIT) declined from EUR3.6 million to EUR2.0 million owing to the
substantial additional year-on-year expenditure of EUR2.6 million incurred
by the expansion of the Company's new business segments, adjusted EBIT
jumped by 25.9 percent to EUR4.6 million. For the year as a whole the
Managing Board still expects the Company to achieve its forecast revenue
growth of 8 percent and an adjusted EBIT margin of around 10 percent.

Klaus Dieter Frers, CEO of paragon AG: "We have issued our corporate bond
to facilitate significant growth investments and it has always been clear
that these will have a temporary impact on our earnings situation. We
deliberately accept this development, especially as it becomes increasingly
clear that customer demand particularly in the Electromobility business
segment over the medium to long term will far outstrip our previous
expectations. Due to delays caused by our end customer large amounts of
revenue from our battery packs will be recognized only in the financial
year 2015; however, we will still meet our forecasts for the current
financial year."

Significant investment for the future
The Company's operating performance in the first nine months of 2014 was
strongly influenced by the encouraging level of existing business involving
products for premium manufacturers. Revenue in the Acoustics business
segment alone jumped by 24 percent. In the Sensors business segment the air
quality improver is becoming a growing success story, and paragon's
Managing Board expects it to achieve further impressive unit sales. The
fledgling Body Works Kinematics and Electromobility business segments saw
continued success, notching up a number of new orders. paragon incurred
additional year-on-year expenditure of EUR2.6 million to establish and
expand its new business segments as part of its growth strategy. As
expected, the cost of materials and personnel expenses rose as well,
largely owing to the hiring of new staff and to one-off third-party
services around development and production in the Acoustics, Body Works
Kinematics, and Electromobility business segments. This preliminary capital
expenditure caused EBIT to fall from EUR3.6 million in the prior-year
period to EUR2.0 million. The EBIT margin narrowed accordingly from 6.9
percent to 3.6 percent. Adjusted to exclude the aforementioned additional
expenditure, operating EBIT jumped by 25.9 percent to EUR4.6 million. The
adjusted EBIT margin was 8.2 percent. Capital investment at paragon from
January 1 to September 30, 2014 totaled approximately EUR8.8 million (Q1-Q3
2013: EUR3.8 million). Capital expenditure in the third quarter of 2014
alone came to EUR4.5 million, which was more than three times the amount
spent in the corresponding period of 2013 (Q3 2013: EUR1.4 million).

paragon AG's consolidated net income in accordance with IFRS for the first
nine months of 2014 amounted to EUR0.2 million (Q1-Q3 2013: EUR1.8
million). Its earnings per share came to EUR0.04 (Q1-Q3 2013: EUR0.43).

Forging ahead with internationalization
After founding Voltabox of Texas, Inc., in September 2014 as part of its
internationalization strategy, paragon began to build a new plant in Cedar
Park near Austin (Texas). It plans to use a fully automated assembly line
to ramp up production at this site from April 2015, having already started
manufacturing in leased premises in September of this year. In addition,
Voltabox of Texas has been certified under the Buy American Act, thus
qualifying as an approved supplier for public contracts and unlocking
further revenue-generating potential in the United States.

Furthermore, paragon has successfully concluded discussions concerning a
joint venture in China and has signed a framework agreement to this effect
with its Chinese partner Jiangsu Riying Electronics Co. Ltd. (R&Y), which
is a leading supplier to the automotive and motorcycle industries.
Production is expected to start here as early as the summer of 2015, and
paragon is already about to sign a number of substantial contracts for this
joint venture.

For 2014 as a whole, the Managing Board still reckons that the Company will
achieve revenue growth of 8 percent and an adjusted EBIT margin of around
10 percent. The additional expenditure incurred by the establishment and
expansion of innovative new business segments is expected to total roughly
EUR4.0 million more for the year as a whole than in the previous year. For
2015, paragon anticipates double-digit growth rates in both revenue and
earnings. The Managing Board will announce detailed forecasts after the
Supervisory Board has approved its planning in December.

Company profile
Listed in the regulated market (Prime Standard) of Deutsche Börse AG in
Frankfurt am Main, paragon AG develops, produces, and sells advanced
automotive electronics solutions. The portfolio of this direct supplier to
the automotive industry includes products in the following business
segments: Sensors, Acoustics, Cockpit, Electromobility, and Body Works
Kinematics. Headquartered in Delbrück (North Rhine-Westphalia), paragon AG
has branches in Suhl (Thuringia), Nuremberg (Bavaria), and St. Georgen
(Baden-Württemberg) as well as a sales office in Shanghai (China) and a
subsidiary in Austin (Texas, United States).


paragon AG
Schwalbenweg 29
33129 Delbrück
Tel.: +49 (0)5250 97620
Fax: +49 (0)5250 976 260
Website: www.paragon.ag
Email: info@paragon.ag

Financial press & investor relations contact
Instinctif Deutschland GmbH
Michael Müller
Tel.:  +49 (0)221 420 750
Email: michael.mueller@instinctif.com


19.11.2014 Dissemination of a Corporate News, transmitted by DGAP - a
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Language:    English                                               
Company:     paragon AG                                            
             Schwalbenweg 29                                       
             33129 Delbrück                                        
Phone:       +49 (0)5250 97 62 - 0                                 
Fax:         +49 (0)5250 97 62 - 60                                
E-mail:      investor@paragon.ag                                   
Internet:    www.paragon.ag                                        
ISIN:        DE0005558696, DE000A1TND93                            
WKN:         555869, A1TND9                                        
Listed:      Regulierter Markt in Frankfurt (Prime Standard);      
             Freiverkehr in Berlin, Düsseldorf, Hamburg, München,  
End of News    DGAP News-Service  
297875 19.11.2014