paragon (PGN)

Business description

paragon designs and manufactures advanced automotive electronics solutions as a direct supplier to the automotive industry. Products include: sensors, acoustics, cockpit, electromobility and body kinematics.

Investment summary

Following a visit to paragon’s expanded Delbrück facility and the successful €50m bond issue, in August we revisited and upwardly revised our medium-term growth and margin outlook for the group. With 2016 results having met forecasts despite some timing headwinds and future years underpinned by substantial contract wins across the electromobility division, we believe paragon is on the cusp of further accelerated growth. With proceeds from both the October 2016 capital increase and June 2017 bond issue being invested to support this accelerated growth, our fair value is €82.1/share based on our updated DCF scenarios.

Last updated on 06/09/2017

Y/E Dec Revenue (€m) EBITDA (€m) PBT (€m) EPS (fd) (c) P/E (x) P/CF (x)
2015A 95.0 14.1 5.0 82.7 107.0 22.1
2016A 102.8 16.1 5.8 84.4 104.9 18.5
2017E 123.8 19.4 7.8 116.0 76.3 27.7
2018E 155.7 25.6 13.1 194.5 45.5 19.3

Last updated on 30/08/2017

Latest video

Executive Interview - paragon

Industry outlook

paragon has continued to develop its electromobility exposure through a series of agreements with customers in several end-markets. This approach of partnering with leading players in each subsector, where demand already exists and substitution is taking place, is significant as it de-risks adoption and provides readymade markets for paragon’s technology. In parallel to the rapid growth in electromobility, the group continues to expand the core automotive markets where it remains a leader based upon innovation in support of global mega trends.

Last updated on 06/09/2017

Key management

Klaus Frers, CEO

Company address

Schwalbenweg 29
Delbrück
33129
Germany
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