DGAP-News: paragon GmbH & Co. KGaA / Key word(s): Preliminary Results/9 Month figures
21.10.2020 / 10:15
The issuer is solely responsible for the content of this announcement.

Automotive Supplier paragon Exceeds Market Expectations with 10% Increase in Revenue in Third Quarter

- Revenues and earnings of automotive business for the whole year expected to reach upper end of the forecast range

- Automotive revenue increases by roughly 10% in third quarter - revenues of up to € 125 million possible for whole year

- Digital Assistance grows by 75% in Q3; Sensors by 16.5%, Kinematics by 15%

- paragon Automotive EBITDA margin of 12% for Q3 nearly twice Q2 figure; continued improvement anticipated in Q4

- 9-month figures reflect success of the efficiency program in the paragon core business with cash flow of € 8.3 million and free cash flow of € 2.7 million

- Revolutionary new technology from Voltabox heats up competition among bidders; multiple offers received for the acquisition of paragon's stake

- Publication of the paragon Group's final quarterly figures moved forward to October 30

Delbrück, Germany, October 21, 2020 - paragon [ISIN DE0005558696] presented preliminary figures today for the third quarter of 2020 of its automotive business. These show that the company, in contrast with the competition, has been able to substantially increase its revenues from the automotive business in the past three months relative to the same quarter of the previous year. The operating business has thus reliably confirmed the recovery which has been emerging for months following the temporary lockdown. The earnings benefits for paragon from the effects of the efficiency program are also increasing. Publication of the interim financial report for the third quarter is being moved forward to October 30.

Business in the premium segment, which paragon prioritizes, has substantially outperformed that of other vehicle classes. While the Chinese market has recovered with particular speed benefiting nearly all manufacturers, substantial recovery was also seen in the North America business in the third quarter, particularly for the largest customer, Porsche. Daimler anticipates continued positive momentum as well. The modified paragon automotive product mix is also continuing to have a positive effect on revenue development. New products and innovations from the Kinematics, Sensors and Digital Assistance business units in particular are driving this growth in sales. In the current situation, efficient organization and an improved cost structure are also making notable positive contributions to the earnings.

"Contrary to all prophecies of doom, paragon has performed better than nearly all other automotive suppliers. We did all of our homework on time, and now we can see that paying off," says Klaus Dieter Frers, founder and CEO of paragon. "It's making me increasingly angry when the executives of major automotive suppliers claim that the automotive industry is in a deep crisis in order to deflect attention from their own structural problems. By doing so, they discredit numerous companies with thousands of employees who are achieving healthy business development." According to Frers, the future outlook of paragon is a sign of hope, with the impact of the coronavirus now barely perceptible. Frers states that "paragon is a shining example of the fact that the 'automotive supplier' label is too narrow for a technology company."

According to preliminary figures, the Group has generated revenues of € 83.8 million in the automotive business after three quarters. With third-quarter revenues of € 33.8 million, paragon was able to realize roughly 40 % of the revenues generated to date despite the standard industry plant holidays and associated declines in revenues that take place during these months. The main growth drivers in the third quarter were the Digital Assistance (up 75%), Sensors (up 16.5%) and Kinematics (up 15%) business units. The EBITDA margin of paragon Automotive after nine months stands at 9.0 %, on par with the previous year's level despite the coronavirus-related plant closures. In the third quarter alone, paragon achieved an EBITDA margin of 12.2 %, cash flow of € 4.3 million and free cash flow of € 1.9 million in its automotive business.

On the basis of orders on hand until the end of the year, the Management expects to reach the upper end of the respective forecast ranges for revenue and earnings. This would correspond to automotive revenues of roughly € 120 million and an equivalent EBITDA margin of 12 %. Revenues could now even increase to as much as € 125 million. Due to increased demand, paragon will have run more than 100 extra shifts by the end of 2020. The company is also gradually expanding its capacities.

Meanwhile, the Management is wholly satisfied with the progress of negotiations on the sale of the subsidiary Voltabox. "We are equally focused on finding the best possible solution for Voltabox and on achieving a sale with optimal value in the interests of paragon shareholders," emphasizes Klaus Dieter Frers. "The substantial level of resonance we've found, both in Germany and abroad, is a sign that we can achieve an outstanding combination of the two. We have multiple offers to choose from, and neither paragon nor Voltabox has any cause for haste." The Management is confident that the matter can be concluded before the end of the year.

A new technology, which Voltabox has announced to be presented to the public on December 1, 2020, is playing an increasing role in the bidding contest. The research department of Voltabox has developed an entirely new and revolutionary approach that will turn globally established battery concepts upside-down. Multiple international patents have been filed in order to safeguard this technological leap in battery design. The novel "flow-shape design" stands for making Li-ion batteries simpler, smaller, lighter, safer and substantially more affordable. They will be able to charge more quickly and enable longer ranges. Not least because of this, paragon's management is highly confident in the economic stability and future prospects of Voltabox. "The disruptive flow-shape design is taking Voltabox to the next level and re-establishing Voltabox as a leader in technology," says Klaus Dieter Frers.

Details on future strategies for the core automotive business and various new product highlights will be presented by paragon through a virtual Capital Markets Day event. This is scheduled for the first half of November and will be directed mainly at analysts and institutional investors. Against this backdrop, the company is moving the publication of its interim financial report for the third quarter forward to October 30.


Profile: paragon GmbH & Co. KGaA

paragon GmbH & Co. KGaA (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, body kinematics and e-mobility. As a market-leading 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. In the Mechanics operating segment, paragon develops and produces active mobile aerodynamic systems. In addition, the Group holds a stake in Voltabox AG (ISIN DE000A2E4LE9), a subsidiary that is also listed on the regulated market (Prime Standard) of Deutsche Börse AG in Frankfurt a.M., which is active in the rapidly growing electromobility segment with cutting-edge lithium-ion battery systems developed inhouse.

In addition to the company headquarters in Delbrück (North Rhine-Westphalia, Germany), paragon GmbH & Co. KGaA and its subsidiaries operate sites in Suhl (Thuringia, Germany), Landsberg am Lech and Neu-Ulm (Bavaria, Germany), St. Georgen (Baden-Württemberg, Germany), Limbach (Saarland, Germany), Aachen (North Rhine-Westphalia, Germany) as well as in Kunshan (China), Oroslavje (Croatia) and Austin (Texas, USA).

Additional information about paragon can be found at www.paragon.ag.

Capital Market & Press Contact

paragon GmbH & Co. KGaA

Stefan Westemeyer
Artegastrasse 1
33129 Delbrück, Germany
Phone: +49 (0) 52 50 - 97 62-141
Fax: +49 (0) 52 50 - 97 62-63
Email: investor@paragon.ag

21.10.2020 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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