€103.4m market cap

€22.85 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 60% of Voltabox, which supplies battery power systems.

Investment summary

In August paragon lowered FY19 revenue guidance by around €30m to between €200m and €210m, with a negative group EBIT margin of -1% to -2% (from c 8% previously). We reduced our forecasts accordingly. The main change comes from the Voltabox business where a battery supplier is transitioning to the latest cell technology leading to Q3 supply delays, compounded by a postponed US order. The known market challenges in the auto segments have led to a worsening mix, with extra costs to consolidate development and production sites as well as for new projects that should depress segment EBIT margins to between 3–4%. Q3 results reflected these issues.

Y/E Dec
Revenue (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 124.8 18.3 5.9 (8.52) N/A 128.5
2018A 187.4 30.3 14.8 144.58 15.8 N/A
2019E 200.1 13.6 (5.3) (43.14) N/A N/A
2020E 233.4 31.9 9.5 139.30 16.4 3.3
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.

Last updated on 16/01/2020
Share price graph
Balance sheet
Forecast net debt (€m) 114.6
Forecast gearing ratio (%) 58
Price performance
Actual 60.9 73.6 14.9
Relative* 60.7 63.8 (6.4)
52-week high/low €39.0/€9.6
*% relative to local index
Key management
Klaus Frers CEO

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