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

paragon AG / Half Year Results Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- 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: http://www.paragon-online.de. 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 Internet: www.paragon-online.de Email: info@paragon-online.de Head of Corporate Communications Matthias Hack Phone: +49 (0) 52 50 - 97 62-141 Fax: +49 (0) 52 50 - 97 62-60 Email: matthias.hack@paragon-online.de Investor Relations Haubrok Investor Relations GmbH Stefan Didyk Phone.: +49 (0) 52 50 - 97 62-140 Email: s.didyk@haubrok.de 05.08.2008 Financial News transmitted by DGAP ---------------------------------------------------------------------- Language: English Issuer: paragon AG Schwalbenweg 29 33129 Delbrück Deutschland Phone: +49 (0)5250 97 62 - 0 Fax: +49 (0)5250 97 62 - 60 E-mail: investor@paragon-online.de Internet: www.paragon-online.de ISIN: DE0005558696 WKN: 555869 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, München, Hamburg, Düsseldorf, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------