DGAP-News: paragon performs strongly in final quarter - Annual targets fully achieved even in tough industry environment - Largest order in company history received

paragon performs strongly in final quarter - Annual targets fully achieved even in tough industry environment - Largest order in company history received

- Preliminary figures for 2021 show: Group revenue at around 146.5 million (previous year: 127.2 million) despite temporary supply chain problems at automotive manufacturers, thus fully meeting revenue forecast for 2021

- EBITDA margin also reveals pleasing rise to target value of 13.5% (previous year: 10.8%)

- Revenue drivers: particle sensors, display instruments and the young Digital Assistance business unit

- Strong start to 2022: paragon secures OEM order worth around 40 million for AI-based voice control system

- Revenue target for 2026 of 250 to 300 million

- Extension of euro bond term planned in light of growth potential

Delbrück, 20. January 2022 -paragon GmbH & Co. KGaA [ISIN DE0005558696] has capitalized on its highly innovative product portfolio to achieve its revenue and earnings targets following a strong final quarter, despite the recent turmoil in the automotive sector. According to initial preliminary figures, sales at Group level increased by 15.2% to 146.5 million (2020: 127.2 million).

This figure is in line with the management's communicated forecast and shows that paragon successfully compensated for some order call-offs from key major customers and fully achieved its targets. This is primarily attributable to the pleasing development in the Interior and Digital Assistance business units alongside sustained very robust demand for air quality management solutions from the Sensors business unit. Consistent cost management along the entire value chain is also bearing fruit: the preliminary figures reveal that the EBITDA margin rose to a strong 13.5% in 2021 (previous year: 10.8%). At the same time, there was positive development in paragon Group's liquidity situation: positive free cash flow in the high single-digit million range was generated from operating activities.

"Thanks to forward-looking and successful management of the pandemic impacts, combined with a consistent focus on promising product innovations, paragon has performed very positively and significantly better than the market, despite the pandemic and the chip crisis," said Klaus Dieter Frers, founder and Chairman of the Board of paragon GmbH, the personally liable general partner of paragon GmbH & Co. KGaA. Frers added: "When it comes to drive systems, the trend is toward electromobility. That's why the motor under the hood lost its significance some time ago, and we are one of the players to benefit from the entire transformation of our industry. What matters today is the feeling as you first get into the car, and what it can do for the driver and passengers. This is very much our domain: communication, sensor technology for better interior air quality, these are precisely the areas we have been working on for decades. Electromobility is bound to prevail in the automotive industry. We profit from this, since none of our products are dependent on combustion engines."

Largest single order in company history for voice assistance system

The award of the largest single contract in paragon's history demonstrates the company's outstanding capacity for innovation, particularly in the area of digitalization. One of the world's leading automakers has opted for the geni:OS voice assistance system developed by paragon subsidiary paragon semvox GmbH and will equip millions of vehicles with this adaptive AI-based software from 2024 - adding to the millions of previous installations of the paragon software. The order volume is around 40 million over a period of several years. The development phase for this groundbreaking technology will get underway in the spring. As is customary for projects of this nature, paragon will already receive significant development revenues from the customer in the current calendar year.

Revenue expected to increase to 250-300 million by 2026, EBITDA margin to rise to 20%

paragon expects to continue its dynamic growth in the next few years, partly as a result of existing orders for electric virus filters; paragon has set itself the target of achieving revenue of 250 to 300 million by 2026. Profitability should gradually rise further to an EBITDA margin of 20% in the same period by means of targeted measures.

paragon is systematically paying down debt - partial repayments planned

In light of the pleasing performance in 2021, coupled with sustainable growth prospects and a well-filled order pipeline, paragon is taking concrete steps to further improve its financing structure. The management plans to extend the term of the 4.50% 2017/2022 bond by way of a bondholder vote on unchanged terms until 5 July 2027. Since paragon has already approached individual core investors in the 2017/2022 bond with the request to extend the term, the company is confident that the request will receive broad support from the bondholders. The extension of the bond term offers existing bondholders a further attractive investment opportunity, given the current interest rate environment, along with the chance to continue participating in paragon's strong growth and innovations in the future. At the same time, paragon is systematically pursuing a sustainable debt reduction. To this end, a partial repayment using funds from potential portfolio adjustments is being examined in parallel.

For clarification: the funds from the bond issued in 2017 were used, among other things, to acquire and further develop subsidiaries that now help to form the backbone of the company and contribute significantly to earnings. paragon has used the capital raised with foresight and has consequently stood out positively from the market for a number of years. All in all, this gives an impressive demonstration of how the financing route chosen at that time has sustainably strengthened the company to this day.

In connection with the planned extension of the bond term, all bondholders are invited to a vote without a meeting in accordance with section 18 of the German Bond Act (Schuldverschreibungsgesetz). The full text of the invitation is expected to be available from 20 January 2022 in the Federal Gazette and on paragon's website (https://paragon.ag/) in the Investor Relations section under the heading "Bondholder Vote".

An investor conference call will also be held in the near future so that all bondholders can be fully informed about the current situation and about paragon's future prospects ahead of the vote.

 

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 the rapidly growing automotive market for battery systems, paragon now acts independently with the Business Unit Power after the sale of the Voltabox share.

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, Nuremberg (Bavaria, Germany), St. Georgen (Baden-Württemberg, Germany), Limbach (Saarland, Germany), Aachen (North Rhine-Westphalia, Germany) as well as in Kunshan (China), Bangalore (India) and Oroslavje (Croatia).

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

Capital Market & Press Contact

paragon GmbH & Co. KGaA

Mirko Wollrab
M: +49 172 830 3600
mailto: mirko.wollrab@corecoms.de
Corecoms Consulting GmbH & Co. KG
Goethestraße 29
60313 Frankfurt am Main