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

2015-12-03 / 08:32
The issuer is solely responsible for the content of this announcement.


paragon forecasts further revenue and EBIT growth for 2016 

  - Consolidated Group revenue to grow by around 8% and cross the EUR 100
    million mark

  - EBIT margin of approx. 9% expected

  - Electromobility as key growth driver

  - Internationalization: battery systems in the US and air quality in

  - Highpoint of investment phase now passed

  - Further jump in revenue signaled for 2017

Delbrück, December 3, 2015 - The Managing Board of the publicly listed
automotive supplier paragon AG has specified its forecast for the coming
year. Consolidated Group revenue is set to grow by a further total of
around 8% compared with 2015 and cross the EUR 100 million mark. Earnings
are also expected to rise, with an EBIT margin of around 9% of revenue.
Alongside the ongoing strong business performance with sensors, microphones
and cockpit systems, the key growth drivers will be the Body Kinematics
business division and above all Electromobility. This business division -
with its Voltabox subsidiaries in Germany and the US - should contribute
revenue of more than EUR 15 million and thus account for an increasingly
significant share of total Group revenue.

Comments Klaus Dieter Frers, CEO of paragon AG: "We will grow significantly
faster than the automobile market in the coming year as well. This growth
will be driven by our highly competitive products and by the extensive
investments made in recent years - especially in expanding and developing
our production plants in Germany, the US, and most recently in China in
2015. We will reap the benefits of these investments on all levels in the
years ahead. The lively investment activity in the years behind us is now
no longer needed in this form."

Decoupling from developments in the automotive industry
The 2016 forecast includes initial revenues from the major order placed in
the course of the year for li-ion starter batteries serial production at
paragon's Voltabox Deutschland subsidiary is due to start in mid-2016.
Voltabox then expects substantial revenue growth in this product segment
from 2017. Strategically, this will also enable it to decouple from
developments in the overall automotive industry. Furthermore, production
ramp-ups at the plants newly opened in the US and China will also
contribute to this dynamic performance. Alongside battery systems in Texas,
in China paragon will initially be focusing above all on its leading air
quality management solutions that ensure clean air in the vehicle interior
and are in particularly great demand in the Asia region.

Given paragon's growth momentum with new products, the supply of superior
quality systems, new international customers and new markets such as
electromobility, the events surrounding VW are not expected to have any
significant impact on paragon in future either. Since the various problems
became known in September 2015, call-up behavior to date has given no
reason to expect any downturn in revenue. The Managing Board has
nevertheless taken a more conservative approach in its planning for 2016
and has thus already anticipated potential future influences. Adds Klaus
Dieter Frers: "Given the rise in equipping rates - also at the VW Group -
we rather expect to see increased quantities. We see further upside
potential in various orders received in the Electromobility business
division. For these, it is not yet absolutely clear what share will lead to
revenue in 2016 already. For 2017, we expect a renewed jump in revenue by a
further 15% to 20%. This will largely be driven by new products."

Substantial growth in orders on hand 
The positive outlook is backed up by significant growth in orders on hand.
The current volume of orders received is 7.8% ahead of the equivalent prior
year's figure. In a lifetime consideration, the Group currently has orders
on hand of more than approx. EUR 1 billion.

The earnings performance is also expected to gain significant momentum in
2016. The company expects a margin of around 9% - implying significantly
disproportionate EBIT growth compared with revenue. One reason for this
also relates to future investment activities at paragon AG. With
investments of EUR 14.0 million budgeted for 2016, paragon is - as planned
- scaling down its capital expenditure to less than half the 2015
investment volume, which was inflated by various one-off factors. paragon
will thus return to a pre-2014 level of investment. The highpoint of the
investment phase initiated by the corporate bond issue in 2013 has
therefore passed. Based on current budgeting, a slightly positive free cash
flow is possible. The Managing Board also expects the equity ratio to
return to around 24% by the end of 2016, accompanied by a reduction in the
debt/equity ratio.

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
divisions: Sensors, Acoustics, Cockpit, Electromobility, and Body
Kinematics. Headquartered in Delbrück (North Rhine-Westphalia), paragon AG
has branches in Suhl (Thuringia), Nuremberg (Bavaria), St. Georgen
(Baden-Württemberg), and Bexbach (Saarland), as well as subsidiaries in
Bexbach (SphereDesign), Kunshan (China), and Austin (Texas, USA).

paragon AG
Schwalbenweg 29
33129 Delbrück
Tel.: +49 (0) 52 50 - 97 62-0
Fax: +49 (0) 52 50 - 97 62-60
Internet: www.paragon.ag
E-mail: info@paragon.ag

Financial press and investor relations contact 
Instinctif Deutschland GmbH
Michael Müller.: Tel.: +49 (0) 221/42075-0, E-mail:


2015-12-03 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:      Regulated Market in Frankfurt (Prime Standard); Regulated  
                Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich,  
     End of News    DGAP News Service