paragon

DE: PGN

€53m market cap

€11.7 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 continues but has yet to be finalised. In 9M20 paragon’s continuing Automotive were €83.8m with an EBITDA margin of 9%. The reported 9M20 EBIT loss was €6.5m, with sequential improvement in Q320 benefiting from previous cost reduction measures and 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 rising to €140m in FY21 with an EBITDA margin of 12–15%, and FCF of c €10m.

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 8.1 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 markets is understood by investors. It is growing 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 as the COVID-19 pandemic wanes.

Last updated on 13/04/2021
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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 22.5 18.2 (10.0)
Relative* 16.6 8.1 (37.6)
52-week high/low €14.0/€7.8
*% relative to local index
Key management
Klaus Frers CEO

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