DGAP-News: paragon AG / Key word(s): 9-month figures

14.11.2017 / 07:30
The issuer is solely responsible for the content of this announcement.

paragon AG Outperforms the Industry Sector Again in the First Nine Months

- Group sales up by 15.0 percent to EUR 84.7 million (prior year: EUR 73.7 million).

- Revenue doubles in the Electromobility operating segment; its share of revenue increases to 16.2 percent of Group sales (prior year: 9.3 percent)

- Particularly strong improvement in key earnings figures: EBITDA rises 23.9 percent to EUR 12.6 million (prior year: EUR 10.2 million), EBIT increases 20.3 percent to EUR 6.1 million (prior year: EUR 5.1 million)

- EBIT margin now at 7.2 percent (prior year: 6.9 percent)

- Focus on automotive megatrends is paying off

- Revenue and earnings forecast confirmed for the whole fiscal year

Delbrück, Germany, November 14, 2017 - paragon AG [ISIN DE0005558696] published its Group interim report for the first nine months through September 30, 2017, today and confirmed its forecast for the current fiscal year.

In the first nine months of this year, the company generated Group sales of EUR 84.7 million (prior year: EUR 73.7 million). The growth resulted from the very good operating performance in the Electromobility and Mechanics operating segments. While third-party revenue in the Electronics operating segment increased slightly, the Electromobility and Mechanics operating segments demonstrated significantly higher dynamic growth. As a result, the share of the two new units rose to 22.5 percent of Group sales (prior year: 12.5 percent).

"With our unique business model we are developing precisely those product innovations that will gain significance for manufacturers, mobility providers and vehicle passengers," says Klaus Dieter Frers, founder and Chief Executive Officer of paragon AG. "Thus, we are increasing our value added per car in the long term."

Despite the significant revenue growth in the new business units, the cost of materials increased by only 11.7 percent to EUR 45.6 million (prior year: EUR 40.8 million). The material input ratio decreased accordingly to 53.8 percent (prior year: 55.3 percent). This results in a gross profit for the period under review of EUR 51.5 million (prior year: EUR 43.2 million), which constitutes a gross profit margin of 60.8 percent (prior year: 58.6 percent).

In the first nine months of the year, the Electromobility operating segment doubled third-party revenue to total EUR 13.8 million (prior year: EUR 6.9 million). The serial production of ready-to-use battery modules for forklifts and automated guided vehicles was mostly responsible for the growth of 100.6 percent. In addition, serial production of 5Ah starter batteries for motorcycles began in the third quarter. At the same time, progress was made with the construction of another prototype for a large, newly designed Komatsu underground mining vehicle. This battery system is based on state-of-the-art pouch cells and weighs approx. 8.5 tons with an energy content of about 800 kWh.

Third-party revenue increased 1.8 percent to EUR 65.8 million in the Electronics operating segment (prior year: EUR 64.5 million). The first nine months of the year were distinguished by new developments (such as the particle sensor DUSTDETECT), the further development of established products (such as the seat-individualized 3D+ sound system) and sample phases for new product innovations.

In the Mechanics operating segment, serial production of new product generations of our adaptive rear spoilers for additional models also began. The operating segment's third-party revenue increased by a very significant 127.5 percent to EUR 5.3 million (prior year: EUR 2.3 million).

"Due to a legal regulation associated with the trend towards autonomous driving, we are directly benefiting from our technological expertise with sensors," says Dr. Stefan Schwehr, Chief Technology Officer (Electronics). "Our range of services will be relevant for all drivers of autonomous vehicles, representing the highest level of development that will be entering the marketing beginning in 2020."

The company's development efforts include a system solution for reliably and automatically monitoring the driver's condition via sensors, as has been legally mandated for future autonomous vehicles in Germany since May 2017.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 23.9% to EUR 12.6 million (prior year: EUR 10.2 million), which corresponds to an EBITDA margin of 14.9% (prior year: 13.8%). After increased depreciation and amortization totaling EUR 6.5 million (prior year: EUR 5.1 million), earnings before interest and taxes (EBIT) improved to EUR 6.1 million (prior year: EUR 5.1 million). Accounting for the increase in revenue, the EBIT margin increased slightly to 7.2% (prior year: 6.9%).

Given that net finance costs decreased to EUR 2.9 million (prior year: EUR 2.4 million) and income tax expenses were less year-over-year, at EUR 1.1 million (prior year: EUR 1.9 million), the paragon Group generated significantly higher consolidated net income of EUR 2.1 million for the period under review (prior year: EUR 0.8 million). This corresponded to earnings per share of EUR 0.47 (prior year: EUR 0.20).

As of September 30, 2017, total assets increased to EUR 152.1 million (December 31, 2016: EUR 115.6 million), which was primarily attributable to the further increase in intangible assets.

paragon AG's equity remained nearly unchanged at EUR 35.0 million (December 31, 2016: EUR 34.7 million). Against the backdrop of higher total equity and liabilities as of the end of the reporting period, the equity ratio fell to 23.0% (December 31, 2016: 30.0%).

Despite the EUR 0.5 million improvement in earnings before taxes and the additional EUR 1.5 million in depreciation and amortization, cash flow from operating activities decreased significantly in the period under review to EUR -3.2 million (prior year: EUR 8.4 million). This was mainly due to the increase in trade receivables of EUR 8.0 million, while the prior year's figure was down by EUR 3.8 million. Trade payables decreased EUR 1.9 million, compared with an increase of EUR 1.4 million in the prior year. Finally, income taxes were up EUR 1.2 million after having decreased EUR 0.1 million in the prior year.

Cash flow from investment activity decreased in the period under review by EUR 3.6 million to EUR -12.9 million (prior year: EUR -16.5 million), which was mainly due to significantly lower investments in property, plant and equipment. As planned, investments were reduced to EUR 13.3 million (prior year: EUR 16.7 million).

Cash and cash equivalents totaled EUR 33.8 million as of the end of the reporting period (December 31, 2016: EUR 14.3 million).

Based on the results of the first nine months of the year and plans for the fourth quarter, the Management Board confirms its revenue and earnings forecast for the current fiscal year. Accordingly, Group sales is expected to grow from EUR 102.8 million to between EUR 120 and EUR 125 million in the current fiscal year. An EBIT margin of around 9.0 percent to 9.5 percent is expected, which corresponds to an EBIT range between EUR 10.8 million and EUR 11.9 million.

The Electromobility operating segment is expected to account for roughly half of sales growth. Accordingly, this operating segment will contribute about EUR 25 million in additional growth to Group sales in the current fiscal year.

The Mechanics operating segment is expected to record the highest relative sales growth. It should contribute about EUR 4 million to the growth of Group sales.

The remaining revenue growth is distributed among the units Sensors, Cockpit and Acoustics, which are part of the largest operating segment: Electronics.

For the current year, the Management Board expects an investment volume of around EUR 21 million, since a portion of the originally planned investment volume has been postponed until next year. The planned investment portfolio will consist of own work capitalized (EUR 12 million), new buildings (EUR 1 million) and new/replacement investments in machinery (EUR 8 million).

The Group interim report and the condensed interim financial statements as of September 30, 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 products and systems in the field of automotive electronics, e-mobility and body kinematics. As 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 develops, produces and distributes adjustable body components such as adaptively extendable spoilers. paragon AG and its predecessors have almost 30 years of company history to be proud of.
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), Bexbach (Saarland, Germany) and Aachen (North Rhine-Westphalia, Germany) as well as in Kunshan (China) and Austin, Texas (USA).

Financial Press & Investor Relations Contact

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
Email: kai.holtmann@paragon.ag

14.11.2017 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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