paragon AG / Half Year Results

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paragon AG distinguishes itself sharply from the prevailing trend in the
automotive industry

• Strong growth in sales and even greater growth in earnings over the last
six months
• Sales in the automotive segment rise by 15.7%
• Group sales up 11.8%
• EBIT up 22.7% / EBITDA up 17.3%
• Forecasts for 2008 confirmed

Delbrück, August 5, 2008 – paragon AG achieved outstanding results in the
first half of fiscal 2008 and developed significantly better than the
automotive industry. Sales in the Company’s core automotive segment rose by
15.7% in to €50.0 million in the first six months of 2008 (H1 2007: €43.2
million). Total group sales rose by 11.8% to €60.5 million in the first
half of 2008 (H1 2007: €54.1 million).

The automotive segment contributed 82.7% of total Group sales in the first
six months of 2008 (H1 2007: 80.0%). The Car Media Systems division
established itself as the major growth driver with an increase in sales of
more than 40%. In addition, step motors in the Instrumentation and Control
Systems division, as well as climate control systems, were important
contributors to total earnings growth.

paragon’s second business segment, Electronic Solutions (incl. Building
Technology), declined moderately due to the order situation in the US
location and consolidation effects resulting from the weak US dollar.
Revenues in this segment were down 3.6% and reached €10.4 million in the
first months of the year. In spite of this trend, the Electronic Solutions
segment contributed a larger share to total Group earnings as a result of
targeted efficiency improvements.

Operating earnings for the first half of 2008 clearly outpaced sales growth
with an increase of 22.7%. With EBIT for the first half of 2008 at €4.8
million (H1 2007: €4.0 million), the EBIT margin came to 8.0% compared to
7.3% in the first half of the previous year. EBITDA also greatly improved
and reached €11.2 million in the first half of 2008 (H1 2007: €9.5
million), leading to an EBITDA margin of 18.5% (H1 2007: 17.6%). The
interest result is still burdened by to additional expenses related to
refinancing with a view to lowering interest costs in future. Net income
for the period in accordance with IFRS came to €482 thousand for the first
half of 2008, slightly below the figure for the prior-year period (H1 2007:
€697 thousand). Earnings per share in the first half of 2008 amounted to
€0.12, compared to €0.17 in the same period of the previous year.

The Executive Board affirms that the forecast targets (5 to 10% gain in
sales, with an even greater increase in earnings) will be achieved for 2008
as a whole, given the significant rise in order levels.

The full 2008 report on the first half of the year is available for
download at the Investor Relations section of the Company’s website:

paragon AG is a direct supplier to the automotive industry and is listed on
the Deutsche Börse Prime Standard index in Frankfurt/Main, Germany. The
Company develops, manufactures, and markets innovative solutions in its
Automotive (Car Media Systems/Climate Systems/Instrumentation and Control
Systems), Electronic Solutions, and Building Technology divisions. Its
product portfolio includes the world’s leading AQS air quality sensor by
far as well as hands-free speaking equipment and instrumentation systems.
In addition to its headquarters in Delbrück, North Rhine-Westphalia,
paragon also operates locations in Suhl, Thuringia (production),
Cadolzburg, Bavaria (car media systems), St. Georgen, Baden-Württemberg
(instrumentation systems) and Heidenheim, Baden-Württemberg (Electronic
Solutions sales). In the international arena, the paragon Group is
represented by wholly-owned subsidiaries in Grand Rapids, Michigan, USA
(development, production, and sales) and Osaka, Japan (applications and
sales) as well as sales offices in Paris, France and Turin, Italy. In
fiscal 2007, the paragon Group generated sales totaling €108.9 million with
a workforce of 594 employees.

paragon AG
Schwalbenweg 29
33129 Delbrück
Phone: +49 (0) 52 50 - 97 62-0
Fax: +49 (0) 52 50 - 97 62-60

Head of Corporate Communications
Matthias Hack
Phone: +49 (0) 52 50 - 97 62-141
Fax: +49 (0) 52 50 - 97 62-60

Investor Relations
Haubrok Investor Relations GmbH
Stefan Didyk
Phone.: +49 (0) 52 50 - 97 62-140

05.08.2008  Financial News transmitted by DGAP
Language:     English
Issuer:       paragon AG
              Schwalbenweg 29
              33129 Delbrück
Phone:        +49 (0)5250 97 62 - 0
Fax:          +49 (0)5250 97 62 - 60
ISIN:         DE0005558696
WKN:          555869
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, München, Hamburg, Düsseldorf, Stuttgart
End of News                                     DGAP News-Service