paragon

DE: PGN

€44.2m market cap

€9.77 last close

paragon designs and supplies automotive electronics and solutions, selling directly to OEMs, including sensors, interior, digital assistance and body kinematics. Production facilities are in Germany, the US and China. It retains 58% of Voltabox, which supplies battery power systems.

Investment summary

The market disruptions developed rapidly due to COVID-19 and management focused on mitigating its impact. The sale process of its remaining stake in Voltabox now looks likely to be more protracted but it is to be accounted for as discontinued. In Q320 paragon’s continuing Automotive sales rose 9%, and ytd sales are €83.8m with an EBITDA margin of 9%. The reported 9M20 EBIT loss was €6.5m, a modest year-on-year improvement in Q320 benefiting from previous cost reduction measures, as well as management’s COVID-19 mitigation efforts. Management has indicated sales for Automotive for FY20 should be c €120m with potential for €125m and a 12% EBITDA margin.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 187.4 30.3 14.8 144.58 6.8 N/A
2019A 192.2 17.2 (8.5) (115.00) N/A N/A
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Industry outlook

We believe paragon’s identification of, and investment in, solutions to address megatrends in global automotive and electromobility markets is understood by the capital markets. It is growing substantially faster than its markets due to innovative products that are driving changes in customer perceptions, creating new growth engines for the group. These should reassert themselves when the COVID-19 pandemic wanes.

Last updated on 04/03/2021
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Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (€m) 114.6
Forecast gearing ratio (%) 58
Price performance
%
1m
3m
12m
Actual 1.1 (9.5) (27.0)
Relative* 1.2 (14.4) (37.0)
52-week high/low €14.0/€7.4
*% relative to local index
Key management
Klaus Frers CEO

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