12-05-2015 | Corporate & Ad-hoc news
paragon AG reports promising start to fiscal year 2015
paragon AG continued its positive performance with a pleasing start to the fiscal year 2015. Consolidated revenue for the first quarter of 2015 improved by another 11.4% from the previous year’s already strong figure of € 19.0 million to a total of € 21.2 million. Group earnings also improved significantly. EBIT more than doubled from € 0.6 million in the previous year to € 1.4 million in the current period. For the further course of the year, the signs for paragon are pointing to continued growth. The Managing Board therefore confirms its forecasts for the full fiscal year 2015, targeting consolidated revenue of up to € 100 million and an unadjusted EBIT margin of around 10%. As of March 31, 2015, paragon has already received more than 96% of the respective customer orders necessary to reach the planned revenue target for the current fiscal year.
“We have stepped up a gear – even compared with the very strong performance in the previous year’s quarter – and are maintaining our growth course. We are particularly pleased with doubling our revenue in Body Kinematics where the investments made in recent years are now paying off ever more clearly. That is also reflected in our earnings situation, where we will see further momentum from increasing Electromobility revenue in the coming months.”
In line with expectations, Electromobility contributed only a low volume of revenue in the first quarter of 2015. Various European projects were completed in 2014 and follow-up orders started in April. There were some delays with our US customer which paragon expects to be made up by the end of 2015.
Automotive business boosted by SphereDesign acquisition
Alongside the strong performance in the Body Kinematics business, the company's focus in the first quarter of 2015 was on its existing business with products for premium manufacturers. Due to strong demand for air quality management (AQS, AQI) products, the Sensors business segment alone reported revenue growth of almost 16%. The Acoustics business segment maintained the high prior year level and revenue in the Cockpit business segment grew by 6%. To boost this segment, paragon acquired SphereDesign GmbH in Bexbach retrospectively as of January 1, 2015. In 2014, this company generated revenue of around € 4 million with its 26 employees. Concurrently, Markus Barth – one of SphereDesign’s former managing partners – has also been appointed the new director of paragon's Cockpit business segment. Especially SphereDesign’s development expertise is an ideal match for this segment. At around € 9.6 million paragon Group maintained its high level of investment activity also in the first quarter of 2015. Alongside the SphereDesign GmbH acquisition, these related mainly to the construction of the US production building as well as replacement and new investments in machinery.
The positive revenue performance is also reflected in the earnings situation. EBIT surged by 134% from € 0.6 million in the previous year to € 1.4 million. The EBIT margin accordingly improved from 3.1% to 6.6%. Consolidated net income at paragon AG according to IFRS as of March 31, 2015, also rose sharply to € 0.8 million (prior year: € 0.1 million). Earnings per share grew to € 0.19 (prior year: € 0.02).
Ongoing focus on internationalization
Activities in the further course of the year will focus amongst others on the increasing internationalization of the paragon Group and on the partly related expansion of the Electromobility business segment at Voltabox of Texas, Inc. The launch of manufacturing at the newly built production halls in the US is scheduled for June 2015.
Planning work for the Chinese business has meanwhile also been completed. Under the management of Wolfgang Ketter – the new General Manager for China and a highly reputed automotive product manufacturing expert with more than 25 years of experience in the automotive industry – the sales subsidiary already in Shanghai since 2012 will be extended into a manufacturing operation and will move into new and ideally equipped premises in Kunshan not far from Shanghai in the coming months. In the future, the new plant will produce air quality sensors, air quality improvement systems and stepper motors for display instruments. Production is scheduled to begin in the fall of 2015.
The order situation and outlook of the individual business segments remain positive and even exceed the company’s own expectations in some areas, a development to which the new strategic partnership with Triathlon Batterien GmbH and the acquisition of SphereDesign GmbH are contributing, too. Against this backdrop, the Managing Board believes that the company is still well on track and reiterates its forecast for the full fiscal year 2015, targeting consolidated revenue of up to € 100 million and an unadjusted EBIT margin of around 10%.