paragon Automotive confirms robust operational performance

paragon Automotive confirms robust operational performance

- Increase in Automotive business revenue by 51.3% compared to the first half of pandemic year 2020; increase by 18.3% compared to the first half of 2019

- High product demand in Sensors and Interior business units - in Digital Assistance business unit, leap in revenue of 127.9% in the first half-year

- EBITDA margin of 14.8% at upper end of expectations (prior year: 6.8%)

- Chip shortage still under control - safety stocks ensure customers can be reliably supplied

- Sale of stake in Voltabox now imminent

- Forecast for the fiscal year substantiated: revenue of around € 145 million with an EBITDA margin between 12 and 15%, free cash flow at around € 12 million

Delbrück, Germany, August 24, 2021 - Today, paragon [ISIN DE0005558696] published its half-year report as of June 30, 2021, revealing revenue growth in the Automotive business of more than 50% compared to the prior-year period. The top tier supplier to the automotive industry is benefiting from its comprehensive product and technology portfolio. The DUSTDETECT(R) particle sensor and new products in the Cockpit and Acoustics departments are enjoying sustained high demand. The accumulated revenue from the Electronics and Mechanics (paragon Automotive) operating segments comes to € 75.7 million at the end of the first half-year (prior year: € 50.0 million). With an EBITDA of € 11.2 million (prior year: € 3.4 million) in the first half of the year, the company confirms the sustained effectiveness of the measures taken to improve results.

"Our strong revenue and earnings level from the second half of the year 2020 has solidified. paragon's positioning is not just paying off temporarily," says Klaus Dieter Frers, founder and CEO of paragon. "We adjusted to the current procurement difficulties at an early stage and deliberately increased inventories, even though this temporarily ties up more capital."

At the overall Group level (including the activities held for sale in the industrial e-mobility sector, represented by Voltabox AG), revenue in the reporting period amounts to € 79.0 million (prior year: € 59.4 million). The solidity of paragon Automotive's operating performance is also demonstrated by the fact that all business units allocated to this market were able to achieve significant double-digit growth rates in the first six months. The Sensors business unit stands out in particular with growth of 82.7% to € 24.0 million compared to H1/2020 (prior year: € 13.2 million). In the second quarter, this unit even achieved € 11.5 million, an increase in sales of 103% compared to the same period of the previous year (prior year: € 5.6 million). Along with the effect of the high demand for the DUSTDETECT(R) particle sensor, the paragon Group's air quality sensors also contributed to the strong performance of the Sensors business unit.

The Interior business unit with the Acoustics and Cockpit departments achieved an increase in sales of 38.9% to € 25.1 million (prior year: € 18.1 million) and thus accounts for around a third of total sales. The good level from the first quarter was also maintained in the months of April to June with revenue of € 12.4 million (prior year: € 7.1 million, corresponding to an increase of 76.5%), which indicates the long-term solid development of sales in this unit. The Cockpit department in particular contributed to this development within the first six months with an increase in sales of 45.6%. The growth of the Acoustics department also amounts to a remarkable 31.0% during this period.

While the Power business unit (focus on e-mobility) which was established in the spring contributed to revenue for the first time in the second quarter, the young Digital Assistance business unit achieved an increase in sales of 127.9% to € 5.3 million (prior year: € 2.3 million) in this period. As a result, this division now accounts for 7.0% (prior year: 4.7%) of paragon Automotive's total sales.

With revenue of € 21.2 million (prior year: € 16.5 million) and a share of 28.0%, the Kinematics division remains the third-largest business unit at paragon Automotive. In the second quarter, revenue with Kinematics products increased by 41.1% compared to Q2/2020.

A comparison with the pre-coronavirus year 2019 shows that the rates of increase are not directly attributable to the plant closures in Q2/2020. Thus, paragon generated almost one-fifth (H1/2019: € 64.0 million; H1/2020: € 75.7 million) more sales in the reporting period than in the first half of 2019. The Digital Assistance business unit stands out with growth of 197.9% compared to H1/2019, while the Sensors business unit recorded a 44.2% jump in sales in the same period.

The pleasing development of the EBITDA margin of paragon Automotive in the first six months was made possible by the good operating performance of the Electronics and Mechanics segments. The EBITDA of the Electronics operating segment with its Sensors, Interior and Digital Assistance business units was € 9.1 million (prior year: € 3.7 million), which corresponds to an EBITDA margin of 16.2% (prior year: 10.4%) on segment revenue of € 56.0 million (prior year: € 35.5 million). The Mechanics operating segment's EBITDA, represented by the Kinematics business unit, amounts to € 2.0 million (prior year: € 0.3 million). Based on segment revenue of € 21.1 million (prior year: € 16.9 million), the margin is 9.4% (prior year: 1.7%).

paragon Automotive continued to steadily pursue its strategy of reducing net debt. As a result, the total of bond liabilities and liabilities to banks has been reduced by € 11.6 million to € 116.3 million since December 2019. At the beginning of August - after the reporting date of the half-year financial report - the early repayment of the Swiss bond started with a first tranche of CHF 5.25 million, thanks to the continued high internal financing capability. For the bond redemption due in 2022, the company is pursuing targeted measures with full consideration of the interests of paragon's shareholders.

With regard to the sale of the stake in Voltabox AG, the company is currently in the final phase with the Swiss investors and expects to reach a positive conclusion shortly. Negotiations had been severely delayed because the investors were pursuing a different deal structure from the one in the LOI of December, 2020. Now the investors have declared that they will return to the original structure.

The management is very pleased with the course of the first half of the year. In the past, the second half of the year has always been more fruitful in terms of revenue and results. Therefore the Management still expects revenue of around € 145 million for the Automotive business this year. An EBITDA margin of 12% to 15% is expected, while free cash flow is expected to be around € 12 million. Depending on the further development of the market, the Management sees opportunities to exceed the forecast.

paragon's half-year financial report is available at https://ir.paragon.ag/websites/paragon/German/4120/zwischenberichte.html. Further information about paragon GmbH & Co. KGaA can be found at www.paragon.ag.

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. and which is active in the electromobility segment with cutting-edge lithium-ion battery systems for industrial use developed inhouse. In the rapidly growing automotive market for battery systems and power electronics, paragon will operate on its own in the future.

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, Neu-Ulm and Nuremberg (Bavaria, Germany), St. Georgen (Baden-Württemberg, Germany), Limbach (Saarland, Germany), Aachen (North Rhine-Westphalia, Germany) as well as in Kunshan (China), Bangalore (India), 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
Bösendamm 11
33129 Delbrück, Germany
Phone: +49 (0) 52 50 - 97 62-141
Fax: +49 (0) 52 50 - 97 62-63
Email: investor@paragon.ag