DGAP-News

paragon AG: paragon forecasts further revenue and EBIT growth for 2016 - Seite 2

in China paragon will initially be focusing above all on its leading air
quality management solutions that ensure clean air in the vehicle interior
and are in particularly great demand in the Asia region.

Given paragon's growth momentum with new products, the supply of superior
quality systems, new international customers and new markets such as
electromobility, the events surrounding VW are not expected to have any
significant impact on paragon in future either. Since the various problems
became known in September 2015, call-up behavior to date has given no
reason to expect any downturn in revenue. The Managing Board has
nevertheless taken a more conservative approach in its planning for 2016
and has thus already anticipated potential future influences. Adds Klaus
Dieter Frers: "Given the rise in equipping rates - also at the VW Group -
we rather expect to see increased quantities. We see further upside
potential in various orders received in the Electromobility business
division. For these, it is not yet absolutely clear what share will lead to
revenue in 2016 already. For 2017, we expect a renewed jump in revenue by a
further 15% to 20%. This will largely be driven by new products."

Substantial growth in orders on hand
The positive outlook is backed up by significant growth in orders on hand.
The current volume of orders received is 7.8% ahead of the equivalent prior
year's figure. In a lifetime consideration, the Group currently has orders
on hand of more than approx. EUR 1 billion.

The earnings performance is also expected to gain significant momentum in
2016. The company expects a margin of around 9% - implying significantly
disproportionate EBIT growth compared with revenue. One reason for this
also relates to future investment activities at paragon AG. With
investments of EUR 14.0 million budgeted for 2016, paragon is - as planned
- scaling down its capital expenditure to less than half the 2015
investment volume, which was inflated by various one-off factors. paragon
will thus return to a pre-2014 level of investment. The highpoint of the
investment phase initiated by the corporate bond issue in 2013 has
therefore passed. Based on current budgeting, a slightly positive free cash
flow is possible. The Managing Board also expects the equity ratio to
return to around 24% by the end of 2016, accompanied by a reduction in the
debt/equity ratio.


Company profile
Listed in the regulated market (Prime Standard) of Deutsche Börse AG in
Frankfurt am Main, paragon AG develops, produces, and sells advanced
automotive electronics solutions. The portfolio of this direct supplier to
the automotive industry includes products in the following business