DGAP-News: paragon AG / Key word(s): Interim Report/Quarterly / Interim Statement

10.05.2017 / 07:30
The issuer is solely responsible for the content of this announcement.

paragon AG Prepares for Next Growth Phase in First Quarter

- Group revenue up 11.7 percent to EUR 25.9 million (prior year: EUR 23.2 million)

- Electromobility continues to be greatest driver of growth with a 9.9 percent share of revenue (prior year: 7.6 percent)

- EBITDA increases 10.7 percent to EUR 3.4 million (prior year: EUR 3.0 million)

- EBIT margin drops slightly to 5.2 percent (prior year: 5.9 percent)

- Investments stable at EUR 5.1 million (prior year: EUR 5.0 million)

- Revenue and earnings forecast for the current fiscal year confirmed

Delbrück, Germany, May 10, 2017 - paragon AG [ISIN DE0005558696] published its interim report for the first quarter through March 31, 2017, today and confirmed its forecast for the current fiscal year.

In the first quarter, the company generated Group revenue of EUR 25.9 million (prior year: EUR 23.2 million). The growth was mainly driven by the very good operating performance in the Electronics and Electromobility operating segments. While third-party revenue in the Electronics operating segment increased 10.3 percent, the Electromobility segment posted the highest relative growth rate at 45.5 percent. With this, the operating segment accounted for 9.9 percent of Group sales (prior year: 7.6 percent).

Due to the planned expansion of business activities in the newest segments, the cost of materials increased considerably by 17.7 percent to EUR 15.3 million (prior year: EUR 13.0 million). The material input ratio rose accordingly to 59.1 percent (prior year: 56.1 percent). This resulted in a gross profit for the first quarter of EUR 15.7 million (prior year: EUR 14.2 million), which corresponds to a current gross profit margin of 60.6 percent (prior year: 61.2 percent).

"With the construction of the new Aumann production line for the automated mass production of battery modules, we are already massively expanding our production capacity in the Electromobility operating segment," says Klaus Dieter Frers, founder and CEO of paragon AG. "We are flanking this with the transformation of Voltabox Deutschland GmbH into a stock corporation, which will enable us to steer organizational growth in this operating segment in a more targeted manner."

In addition to the set-up and gradual start-up of the new production line at the German lead plant for e-mobility in Delbrück, the company's operational business was also marked by extended marketing measures - including prominent participation at the Battery Show Europe in Sindelfingen with a company booth. This is the first global trade fair for the modern battery industry. paragon is currently focusing a lot of its marketing efforts on agricultural applications. Furthermore, the project at Voltabox of Texas to develop an extremely powerful, reliable and safe battery system with energy density of 157 kWh for a mining vehicle continued to progress on schedule. The first prototype will go into test phase in the summer. The series production of battery modules for KUKA's automated guided vehicles has started as planned while the start of serial production for 5 Ah starter batteries, which will be used in motorcycles from a major German manufacturer, is scheduled for the current quarter. In addition, new battery systems for trolleybuses were produced and delivered, as well as battery modules for use in the field of intralogistics.

With third-party revenue of EUR 22.5 million (prior year: EUR 20.4 million), the Electronics operating segment was characterized by new developments (such as the particle sensor DUSTDETECT(R)), further developments (such as the seat-individual 3D+ sound system), sample phases for new product innovations and the transition of new products into pre-serial production - such as the new generation of instruments for a German sports car manufacturer. At the same time, the first exemplars of the finest electronic serial clock available on the market were delivered to a customer and the production figures for the latest generation of our successful hands-free microphones were further increased. In the Mechanics operating segment, the first two new product generations for adaptive rear spoilers have been produced in their pilot series. Serial production will begin in the current quarter. Due to this life cycle effect, third-party revenue in this operating segment decreased to EUR 0.8 million (prior year: EUR 1.0 million).

"With our innovation policy, we are increasingly benefiting from the growing dynamism of the megatrends in the automotive industry," says Dr. Stefan Schwehr, Chief Technology Officer. "This means we can occupy all major areas with our product innovations and expand our ecosystem further."

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) increased 10.7 percent to EUR 3.4 million in the first quarter, despite a rise in personnel expenses resulting from the expansion of the business (prior year: EUR 3.0 million), which corresponds to an EBITDA margin of 13.0 percent (prior year: 13.1 percent).

After increased depreciation and amortization of EUR 2.0 million (prior year: EUR 1.7 million), earnings before interest and taxes (EBIT) were only slightly below the prior year's level at EUR 1.3 million (prior year: EUR 1.4 million). Accounting for the increase in revenue, the EBIT margin therefore decreased slightly to 5.2% (prior year: 5.9%).

With a slightly reduced financial result of EUR -0.8 million (prior year: EUR-0.7 million) and income taxes of EUR 0.5 million level with the prior year, the paragon Group generated a profit for the period of EUR 0.07 million. That is roughly the same as in the prior year (EUR 0.09 million). This corresponds to earnings per share of EUR 0.02 (prior year: EUR 0.02).

Total assets rose to EUR 118.4 million as of March 31, 2017 (March 31, 2016: EUR 102.3 million). This growth was mainly driven by the acquisition of the building located at Artegastrasse 1, Delbrück (Germany), the production building in Austin, Texas (USA), and capitalized development expenses.

The equity of paragon AG increased 77.1 percent to EUR 34.8 million (March 31, 2016: EUR 19.7 million), which was mainly due to the significantly increased capital reserve stemming from the capital increase of 10 percent from authorized capital against cash contributions performed in the fourth quarter of last year as well as from an increase in profit carried forward. As a result of this capital increase, the equity ratio rose to 29.4 percent (March 31, 2016: 19.2 percent) despite the simultaneous increase in the balance sheet total as of the reporting date.

Cash flow from operating activities decreased in the period under review to EUR -2.1 million (prior year: EUR 1.5 million). This is mainly due to a decrease in other provisions and pension provisions, while an increase was recorded in the prior year, as well as a slight increase in trade payables. Cash flow from investment activity decreased slightly to EUR 4.7 million (prior year: EUR 4.9 million).

Cash and cash equivalents totaled EUR 9.1 million as of the end of the reporting period (prior year: EUR 9.7 million). Available liquidity decreased to EUR 9.6 million (prior year: EUR 12.7 million).

Based on the results for the first quarter, the Management Board confirms its revenue and earnings forecast for the current fiscal year. Accordingly, Group revenues are expected to grow to between EUR 120 million and EUR 125 million in the current fiscal year. An EBIT margin of around 9.0 percent to 9.5 percent is expected.

The Electromobility operating segment (represented by the Voltabox subsidiaries) 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 segment and, to a lesser extent, the Mechanics 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. Own work capitalized should amount to around 45% of the investment total for the current year.

The interim report and the condensed interim financial statements as of March 31, 2017, are available for download at www.paragon.ag/en/investors.

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. Being a direct supplier to the automotive industry, the company's portfolio includes the Electronics operating segment's innovative air-quality management, state-of-the-art display systems and connectivity solutions, and high-end acoustic systems. 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 AG 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

Additional features:

Document: http://n.eqs.com/c/fncls.ssp?u=BBGNMLKTOL
Document title: paragon AG Interim Report - Q1/2017

10.05.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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