paragon AG once again grows faster than the market in 2016 and targets further acceleration

paragon AG once again grows faster than the market in 2016 and targets further acceleration

- Consolidated revenue breaks EUR 100 million mark at EUR 103 million

- Electromobility revenue doubles to nearly EUR 14 million

- EBITDA leaps to EUR 16 million; EBIT margin rises to 9 percent

- Equity ratio at 30 percent due to capital increase (prior year: 21 percent)

- Forecast for 2017: Revenue of EUR 120 to 125 million - with an EBIT margin of 9.0 to 9.5 percent and EUR 27 million in investments

Delbrück, Germany, March 27, 2017 - Today, paragon AG published its results for fiscal year 2016 and its forecast for the current fiscal year. These highlight the highest operating result in the company's history. The Management Board's forecast was fully achieved.

In fiscal year 2016, the company generated consolidated revenue of EUR 103 million (prior year: EUR 95 million). Business performance in the Electronics operating segment was mainly characterized by an increase in the take-rate for air quality sensors, an increase in the output volume of the latest generation of hands-free microphones and several production starts for modern display instruments. The significant growth in the Electromobility operating segment was particularly down to the dynamic development of demand in the intralogistics market. The Mechanics operating segment was characterized by several parallel series developments of adaptively extendable spoilers.

"With the reorganization into the three operating segments, we will be able to steer our R&D activities more efficiently in the future," says Klaus Dieter Frers, founder and CEO of paragon AG. "The Electronics operating segment is comprised of the three business units Sensors, Cockpit and Acoustics while the Mechanics operating segment is home to the Body Kinematics unit and production. This is not only directly related to our decision to convert Voltabox Deutschland GmbH into a stock corporation, which was made to expedite the expansion of business activities in the Electromobility operating segment," says Klaus Dieter Frers. "It also allows us to focus more closely on the enormous market opportunities created by connectivity, autonomous driving and improvements in the aerodynamics of vehicles."

Project-related development costs for product innovations and the production costs for test equipment used in serial production rose 20% to EUR 15 million (prior year: EUR 13 million). The cost of materials developed more slowly primarily due to a modified product mix stemming from the business expansion and various cost-cutting measures. Gross profit rose as a result to EUR 61 million (prior year: EUR 57 million).

"The cross-site optimization of process control with agile development methods enables us to be even better adapted to the shortening innovation cycles of automotive manufacturers," says Dr. Stefan Schwehr, Chief Technology Officer (Electronics). "All processes, from sample phase management to the transfer to production are affected by this, as is our innovation management. This is particularly important for our latest innovations in air quality and autonomous driving."

Personnel costs increased significantly mainly as a result of recent hires in connection with operational growth in the new Electromobility and Mechanics operating segments as well as in central Group functions, while other operating expenses remained notably below the prior year's level. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13% to EUR 16 million (prior year: EUR 14 million), which corresponds to an EBITDA margin of 16% (prior year: 15%).

After a slight increase in depreciation and amortization, earnings before interest and taxes (EBIT) increased 14% to EUR 9 million (prior year: EUR 8 million) thanks largely to the drop in other operating expenses. As a result, the EBIT margin rose to 9% (prior year: 8%).

Taking into account a lower financial result and higher income taxes, the paragon Group generated a consolidated net income of approximately EUR 4 million (prior year: EUR 3 million) in the year under review. Against the backdrop of the 10% increase in the subscribed capital on October 5, 2016, this corresponds to earnings per share of EUR 0.84 (prior year: EUR 0.83).

The assets of paragon AG increased significantly to EUR 116 million (December 31, 2015: EUR 93 million) as of the end of the year mainly as a result of the capitalization of development costs, the cash capital increase from authorized capital, the expansion of the Artegastrasse building and the expansion of the production facilities at the Delbrück site as well as higher inventories as a result of the expansion of business activities.

paragon AG's equity increased accordingly by 79% to EUR 35 million (December 31, 2015: EUR 19 million). Given the sharp rise in total assets, the equity ratio increased, as expected, to 30% (December 31, 2015: 21%).

Cash flow from operating activities increased to EUR 17 million (prior year: EUR 13 million) and the cash flow from investing activities dropped to EUR 23 million (prior year: EUR 32 million) due to notably lower investments in property, plant and equipment. Cash and cash equivalents increased to EUR 14 million as a result of the cash capital increase at the beginning of the fourth quarter.

The Management Board continues to expect paragon to grow more quickly than the global automotive industry in fiscal year 2017. Group sales are expected to increase to between EUR 120 million and EUR 125 million in the current fiscal year. An EBIT margin of around 9.0% to 9.5% is expected.

The Electromobility operating segment is expected to contribute about half of the revenue growth, while the remaining revenue growth is predominantly generated by the Electronics operating segment. As of fiscal year 2018, the Electronics operating segment and, to a lesser extent, the Mechanics operating segment are also expected to increasingly contribute to the Group's growth.

The Management Board expects to see an investment volume of around EUR 27 million in the current year. Capitalized development costs are planned to amount to around 45% of the investment total for the current year.

The further significant expansion planned in the Electromobility operating segment is intended to make paragon more independent of macroeconomic factors in the automotive industry and broaden the customer structure.

The annual report and consolidated financial statements from December 31, 2016, are available for download at http://www.paragon.ag/investoren.html.

Company Profile

paragon AG (ISIN DE0005558696), which is listed in the regulated market (Prime Standard) of the Frankfurt Stock Exchange, develops, produces and distributes forward-looking solutions in the field of automotive electronics, e-mobility and body kinematics. As a direct supplier of the automotive industry, the company's portfolio includes the Electronics operating segment's innovative air-quality sensors, high-end acoustic systems and state-of-the-art display instruments. With the Voltabox subsidiaries, the Group is also active in the rapidly growing Electromobility operating segment with its own lithium-ion battery systems developed in-house. In the Mechanics operating segment, paragon develops and produces adjustable body components such as adaptively extendable spoilers. In addition to the company headquarters in Delbrück (North Rhine-Westphalia, Germany), paragon AG and its subsidiaries operate sites in Suhl (Thuringia, Germany), Nuremberg (Bavaria, Germany), St. Georgen (Baden-Württemberg, Germany) and Bexbach (Saarland, Germany) as well as in Kunshan (China) and Austin, Texas (USA).

Financial Press Contact & Investor Relations

paragon AG

Dr. Kai Holtmann
Artegastrasse 1
33129 Delbrück, Germany
Phone: +49 (0) 52 50 - 97 62-140
Fax: +49 (0) 52 50 - 97 62-63
E-mail: kai.holtmann@paragon.ag