paragon

DE: PGN

€63.6m market cap

€14.06 last close

paragon designs and supplies automotive electronics and solutions, selling directly to OEMs, including sensors, interiors, digital assistance and body kinematics. Production facilities are in Germany, the US and China. Following the IPO in October 2017, paragon owns 60% of Voltabox.

Investment summary

paragon faces a challenging year, primarily due to growing pains at the Electromobility segment (Voltabox). The Automotive segments’ FY19 sales are guided to be c €130m, near the top of the previous range. Group sales growth continues, albeit slower than expected, with margins reduced by an under-recovery of overheads and rationalisation and integration costs. FY19 guidance was greatly reduced in August. The order backlog of €2.1bn supports stronger growth in FY20, alongside improved profitability due to operational leverage and restructuring benefits in Mechanics. The current rating reflects concerns over the growth strategy following recent events. Restoring investor confidence should be a key management focus.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 124.8 18.3 5.9 (8.52) N/A 79.1
2018A 187.4 30.3 14.8 144.58 9.7 N/A
2019E 200.1 13.6 (5.3) (43.14) N/A N/A
2020E 233.4 31.9 9.5 139.30 10.1 2.0
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 11/11/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (€m) 114.6
Forecast gearing ratio (%) 58
Price performance
%
1m
3m
12m
Actual 5.9 (17.0) (48.3)
Relative* 0.4 (26.5) (54.8)
52-week high/low €39.0/€9.6
*% relative to local index
Key management
Klaus Frers CEO

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