DGAP-News

paragon AG Continues Growing in Third Quarter - Seite 3

due to the prior year's substantial investments in property, plant and
equipment and due to capitalized development costs.

Equity increased to EUR 19.1 million (prior year: EUR 17.9 million), which
corresponds to an equity ratio of 19.1 percent as of the end of the
reporting period, September 30, 2016 (prior year: 20.7 percent). Following
the reporting period, there was a significant cash inflow of EUR 13.4
million, generated by an increase in the company's share capital from
authorized capital, which resulted in an equity ratio of 28.8 percent after
the capital transaction (as of October 5, 2016).

Cash flow from operating activities increased in the period under review to
EUR 8.4 million (prior year: EUR 6.6 million), mainly due to a much smaller
increase in inventories. Cash flow from investment activity decreased to
EUR 16.5 million (prior year: EUR 25.3 million).

Cash and cash equivalents fell to EUR 4.2 million as of the end of the
reporting period (prior year: EUR 6.6 million). Free liquidity decreased to
EUR 8.1 million (prior year: EUR 10.0 million).

paragon's Managing Board now expects to see an investment volume of around
EUR 20 million in the current year. The investment volume is being raised
beyond what previous planning had allotted for (EUR 14 million) to make the
most of current business opportunities, which can now be explored due to
the successfully carried-out capital increase. New products will be ready
for the market sooner, for example, the particle sensor that meets a strong
customer demand. New technical ideas will reduce the costs of conversion
for battery systems and microphones. Construction costs for the building on
Artegastrasse, Delbrück, have risen due to environmental and security
aspects, as well as an expansion of the surface area.

Based on the results for the first nine months, the Managing Board confirms
its earlier revenue and earnings forecast for the current fiscal year. This
states that consolidated revenue is expected to grow by around 8 percent in
the current fiscal year and thus to exceed the EUR 100 million mark. This
is expected to be accompanied by above-average earnings growth with an EBIT
margin of around 9 percent. The main growth drivers in the current fiscal
year are likely to be the Electromobility division (Voltabox), as well as
the Sensors and Acoustics divisions in the medium term.

The interim report with the condensed interim consolidated financial
statements as of September 30, 2016, can be downloaded from www.paragon.ag/