Start into 2013 in line with expectations

(PresseBox) ( Delbrück, )
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- Revenue as targeted
- EBIT surpasses expectations
- Equity-to-assets ratio climbs to 31.0%
- Managing Board confirms forecast for 2013

The operating performance of paragon AG at the beginning of 2013 was fully consistent with the expectations of the Managing Board. In the first quarter, the Company generated revenue of EUR 16.5 million (prior year: EUR 18.9 million), reflecting an expected decline of 12.9% compared to the first quarter of 2012, which benefited from various one-off items. "The first quarter of 2012 was not the yardstick for us. It is pleasing that revenue rose again compared to the fourth quarter of 2012, in which we realized EUR 15.6 million," explained CEO Klaus Dieter Frers. The order situation continues to be very satisfactory, in particular due to the high volume of orders placed by existing customers for proven products.

As early as the last quarter of 2012, customers of paragon AG showed restraint in placing orders for the purpose of reducing inventories. The extended plant holiday of the automotive manufacturers at the turn of the year had an impact on paragon's revenue both in December 2012 and in January 2013. The Managing Board therefore assumed as early as last year that the first quarter of 2013 would be very restrained, which turned out to be as budgeted and announced.

While revenue was in line with planning, the EBIT margin even exceeded the cautious expectations. EBIT declined year-on-year from EUR 2.5 million to EUR 0.9 million. Compared with the first quarter of 2012 (EUR 0.5 million), EBIT was increased. The EBIT margin came to 5.4% (prior year: 13.2%); the EBITDA margin was 12.0% (prior year: 19.4%). As of March 31, 2013, paragon AG therefore posted net income for the year according to IFRS of EUR 0.5 million (prior year: EUR 1.9 million) and earnings per share of EUR 0.11 (prior year: EUR 0.46). However, it is only possible to make a direct comparison with the first quarter of 2012 on a limited basis. In the first three months of the prior year, a number of one-off items existed, due in particular to a deferral of booked orders from the fourth quarter of 2011 to the first quarter of 2012, which also had a positive impact on revenue and earnings in the second quarter of 2012.

Compared to the first quarter of 2012, paragon was able to build up equity further. As of March 31, 2013, equity came to EUR 13.5 million (prior year: EUR 11.7 million), reflecting a 15.2% increase. The equity-to-assets ratio thus climbed to a pleasing figure of 31.0% (prior year: 27.5%). As of the reporting date, free cash flow was EUR 7.2 million (prior year: EUR 11.8 million). Interest-bearing liabilities came to EUR 14.3 million (prior year: EUR 14.6 million); net debt amounted to EUR 7.1 million (prior year: EUR 2.8 million).

As of the reporting date March 31, 2013, paragon AG employed 382 of its own workers and 43 temporary staff members in Germany. Compared to the prior-year reporting date, the total number of employees thus remained nearly constant (March 31, 2012: 421 including 52 temporary staff members). Compared to December 31, 2012 (389 of its own workers and 45 temporary staff members), paragon recorded a slight decline in headcount. The locations accounted for the following figures (own workers/temporary staff members) as of March 31, 2013: Delbrück (86/0), Suhl (246/41), Nuremberg (36/2), and St. Georgen (57/0).

As one of the best-known suppliers, paragon intends to increase its share in the value creation chain in automotive manufacturing in 2013 and beyond. By constructing new production facilities at the company's headquarters in Delbrück, paragon has created the preconditions to enable the new fields of activity Body Works Kinematics and Electromobility to provide significant contributions to revenue before the end of the current year. A first prototype series of spoiler systems was produced in the first quarter; series production will begin in the autumn. Moreover, paragon has received a significant major order for battery packs, which will start at roughly the same time. Due to the information blackout imposed by the customer, paragon will not be able to report concerning this breakthrough in the business segment of Electromobility until the end of May 2013. In the established fields of activity as well, in particular in the business segments of Sensors and Acoustics, the Managing Board sees considerable potential for revenue.

The Company is also systematically pursuing its involvement in China, including with respect to local in-house production. paragon has access to sufficient funding to support its corporate development in the medium term. In order to potentially accelerate paragon's targeted growth, the Managing Board is also considering a number of financing alternatives in relation to outside capital, and is currently examining the associated opportunities and risks for paragon AG and its future growth. The Company had already considered the forecasts of manufacturers with regard to sales figures in its annual planning for the current fiscal year; thus, the cautious statements from the automotive industry are no reason for adjusting the budget figures. "From the present perspective, we can assume a significant increase in revenue exceeding 15% in the second quarter compared to the first three months of the current year. With regard to EBIT, we are above the planned target. New orders and products will further increase revenue starting in September," said Frers who again confirmed the previous forecasts for 2013. Overall, the Company's management continues to expect that revenue growth will exceed 5 percent as in the prior year as well as a stable EBIT margin.
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