paragon AG: paragon's revenue and profit remain on course

DGAP-News: paragon AG / Key word(s): Half Year Results 20.08.2014 / 10:02 --------------------------------------------------------------------- paragon's revenue and profit remain on course - Consolidated revenue up by 5.9 percent in the first half of 2014 - Earnings figures ahead of budget - Strong demand in current business - Managing Board confirms forecast for 2014 Delbrück, August 20, 2014 - As a result of sustained high demand in its current business, paragon AG has reported revenue and earnings for the first half of 2014 that remain above its own expectations. Consolidated revenue grew by 5.9 percent to EUR37.8 million in the first six months (H1 2013: EUR35.7 million). Although earnings before interest and tax (EBIT) declined from EUR2.9 million to EUR1.5 million due to substantial capital investment in new business segments, they were still ahead of budget. The Managing Board expects this positive course of business to continue in the second half of the year and for the Company's financial performance to improve considerably. By June 30, 2014, customers had already placed call-off orders covering more than 97.2 percent of the total revenue anticipated for the current year. That is why the Managing Board of paragon AG has reiterated its forecast for the year, with revenue growth of around 8 percent and an EBIT margin of approximately 10 percent. "We are currently seeing an encouraging trend in the business segments and therefore remain optimistic for the second half of the year," said Klaus Dieter Frers, Chairman of the Managing Board. "We are continuing to experience extremely strong demand, particularly in Electromobility, although it is still difficult to predict accurately whether current orders will be shipped and the associated revenue recognized in 2014 or 2015. What's more, we are doing better than expected in most of our other business segments." Significant investment for the future Operating business in the first half of 2014 was dominated by a good level of existing business involving products for premium manufacturers. The fledgling Body Works Kinematics and Electromobility business segments saw continued success, notching up a number of new orders. paragon invested a further EUR1.4 million in the establishment and expansion of its new business segments as part of its growth strategy for the future. As expected, the cost of materials and personnel expenses both increased, largely due to the hiring of new staff and to one-off third-party services for development and production in the Acoustics, Body Works Kinematics, and Electromobility business segments. Due to these upfront investments EBIT decreased to EUR1.5 million year on year (H1 2013: EUR2.9 million). Consequently, the EBIT margin declined from 8.3 percent to 4.0 percent. The Managing Board anticipates that the ratios for cost of materials and personnel expenses will return to normal during the remaining months of the year, having been exceptionally high in the first six months of 2014. Adjusted for the significant level of investment for the future, EBIT would have been at the same level as in the first half of 2013 with an EBIT margin of 7.7 percent. Overall, paragon AG's net profit for the first half of 2014 amounted to EUR0.4 million calculated in accordance with IFRS (H1 2013: EUR1.8 million). Earnings per share came to EUR0.09 (H1 2013: EUR0.43). Forging ahead with internationalization paragon founded Voltabox of Texas, Inc. as part of its internationalization strategy and has now begun to set up the plant and hire new employees. Production is still scheduled to commence in late autumn 2014. The spin-off of the Electromobility business segment under the new Voltabox brand, which was approved by the Annual General Meeting, means Electromobility can be positioned independently in the market. It is now represented by the wholly owned subsidiaries Voltabox Deutschland GmbH and Voltabox of Texas, Inc. In May 2014, Voltabox of Texas, Inc. has received a major order for battery packs in the double-digit millions of dollars. paragon also continued to push ahead with expansion in the Chinese market, especially in the second quarter. To this end, it has signed a letter of intent with a leading supplier to the automotive industry regarding the establishment of a joint venture. paragon is aiming for a controlling interest of 65 percent, with production in China starting in 2015. Overall, the Managing Board believes the market offers considerable opportunities for 2014 and, above all, for 2015 and 2016 - accompanied by a substantial rise in revenue. For 2014, the Managing Board has reiterated its forecast for revenue growth of around 8 percent and an EBIT margin of approximately 10 percent. At 2 p.m. on September 1, 2014, paragon will again be showcasing itself to a large audience at the twelfth SCC Small Cap Conference in Frankfurt, where it will be speaking to analysts and investors and answering their questions. Company profile Listed in the regulated market (Prime Standard) of Deutsche Börse AG in Frankfurt am Main, paragon AG develops, produces, and sells advanced automotive electronics solutions. The portfolio of this direct supplier to the automotive industry includes products in the following business segments: Sensors, Acoustics, Cockpit, Electromobility, and Body Works Kinematics. Headquartered in Delbrück (North Rhine-Westphalia), paragon AG has branches in Suhl (Thuringia), Nuremberg (Bavaria), and St. Georgen (Baden-Württemberg) as well as a sales office in Shanghai (China) and a subsidiary in Austin (Texas, United States). Contact paragon AG Schwalbenweg 29 33129 Delbrück Germany Tel.: +49 (0)5250 97620 Fax: +49 (0)5250 976 260 Website: www.paragon.ag Email: info@paragon.ag Financial press & investor relations contact Instinctif Deutschland GmbH Michael Müller Tel.: +49 (0)221 420 750 Email: michael.mueller@instinctif.com --------------------------------------------------------------------- 20.08.2014 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. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: paragon AG Schwalbenweg 29 33129 Delbrück Germany Phone: +49 (0)5250 97 62 - 0 Fax: +49 (0)5250 97 62 - 60 E-mail: investor@paragon.ag Internet: www.paragon.ag ISIN: DE0005558696, DE000A1TND93 WKN: 555869, A1TND9 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 282985 20.08.2014