11-05-2011 | Corporate & Ad-hoc news
Ad-hoc: Business going exactly according to plan
Business is going exactly according to plan at paragon AG. In the first quarter, from January 1 to March 31, 2011, the publicly traded direct supplier to the automotive industry increased its sales by 7% to EUR 16.9 million (Q1 2010: EUR 15.8 million). In addition, the Company exceeded the exceptionally high earnings it generated in the prior-year period. “We’re right on track with our focus on premium vehicles. The improvement of energy efficiency and the expansion of in-vehicle networking are opening up additional opportunities for us,” emphasized CEO Klaus Dieter Frers.
In the first quarter of fiscal 2011, paragon posted gains in nearly every product group thanks to rising volume in conjunction with the upswing throughout the industry. The growth in sales is also boosting the company’s financial performance. Even though personnel and financing costs did not correspond to the usual levels in the first quarter of 2010 as a consequence of the then pending bankruptcy proceedings, at EUR 3.5 million (Q1 2010: EUR 3.4 million), EBITDA continued to rise, as did EBIT at EUR 2.4 million (Q1 2010: EUR 2.2 million).
Beyond the rise in sales, operational profitability and the considerable decline in loan payments also had a positive effect. These aspects more than compensated for the announced higher personnel expenses and the resumed interest and tax payments.
On the reporting date March 31, 2011, paragon AG had 316 employees and 60 temporary workers, all of whom worked in Germany. In other words, due to the favorable business trend, the number of employees has continued to rise since the last reporting date (December 31, 2010: 304 employees and 39 temporary workers). The increase was even more pronounced in comparison to the first quarter of the prior year (March 31, 2010: 249 employees and 24 temporary workers), largely as a consequence of the acquisition of the assets of the former subsidiary, paragon finesse GmbH, effective September 1, 2010. At the individual facilities, the number of employees was as follows on March 31, 2011 (employees/temporary workers): Delbrück (54/0), Suhl (192/42), Nuremburg (22/4), and St. Georgen (48/14).
According to the Managing Board, the favorable trend in the first quarter will continue in the course of 2011. “We are still forecasting a slight increase in sales from the prior year, with no change in profit margins,” confirmed Frers. In fiscal 2010, paragon generated sales of EUR 60.4 million, EBITDA of EUR 10.2 million, and EBIT of EUR 5.2 million.
What is remarkable is that at the end of the first quarter the volume of orders on hand already represents 97.2% of the sales projected for the entire fiscal year 2011. “Contract release orders, or orders placed in advance for later release, encompass a period of nearly eight months. This is the first time in paragon’s history that we have had such a long lead time for release orders. The lead time for contract release orders has more than doubled since 2008,” Frers commented.