paragon GmbH & Co. KGaA
Earnings Call Q1
Delbrück I May 14, 2024
"paragon enters the new year with
optimism"
"Significant increase in profitability
achieved in Q1/2024"
"Forecast for the current financial year
confirmed unchanged"
2
Executive Summary
Business Description
- paragon is a product pioneer for the automotive industry with long lasting relationships with a high number of blue-chip customers
- The company proactively develops proprietary products along the global megatrends to address issues the premium automotive OEMs may not even have considered yet
- paragon is headquartered in Delbrück (Germany) and listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange
- paragon has strong engineering and deep value creation capabilities that enable variable innovative solutions across car lines and customers
- Deep footprint in the automotive industry with an ability to adapt on moving market trends
- 2023 revenues at EUR 161.6m, EBITDA of EUR 25.2m
Broad Product Portfolio
Sensors | Interior | Kinematics | Power | |||
Development and Production Footprint
6 Plants | > 775 employees | > 30 OEMs served
GermanyEurope
USAAsia
Revenue (by Business Unit) | Revenue (by Customer) |
EUR 9m
29,7% | 16,0% |
EUR 41m | Other |
Customers | |
(w/o China) |
EUR 56m | 2023 |
EUR 53m
4,8% | 2023 | 6,2% |
( % total ) | China | |
9,3% 12,6%
6,1% 15,1%
Sensors Interior Kinematics Power
Hongqi | |
4% | 8% |
9% | 24% |
5% | China |
( % total ) | |
11% | 19% |
Others | |
19% |
paragon GmbH & Co. KGaA | May 2024 | 3 |
paragon in a Nutshell
>35yrs |
Experience |
founded 1988 |
8.7% |
CAGR |
(2013-2023) |
13% |
of 779 employees |
in R&D |
paragon benefits from |
8 out of 12 |
Global Megatrends |
Risk diversification |
Broad Portfolio |
>30 OEMs | > 220 Vehicles |
> 300 Products |
Substantial |
Operational |
Improvement Plan |
No Dependency |
of combustion engines |
90% |
Single-Source |
share |
Multi-focus |
Growth Strategy |
drives Cash-Flow |
>150m |
Air Quality |
Sensors |
sold |
Market Leader |
in most of |
25 |
Product Groups |
Every |
7th |
new vehicle is equipped with |
paragon technology |
Globally |
paragon GmbH & Co. KGaA | May 2024 | 4 |
Megatrends are changing the world - Multi-focus Strategy addresses Growth Drivers
❑ Product portfolio supports 8 of current 12 megatrends
❑ Future usage of paragon's products in higher-volumemodels and by more OEMs in Europe and China
Megatrends
Source: zukunftsInstitut
paragon's | ||||||||
Growth Drivers | Demands | Business Units | ||||||
❑ Increased Pollution in larger Cities | drives | In-Cabin | addressed by | supports | ||||
Sensors | ||||||||
❑ More Health Awareness | Air Quality | |||||||
❑ Climate Change | ||||||||
drives | Energy | addressed by | Kinematics | supports | ||||
❑ CO2-Reduction | Efficiency | |||||||
Power | ||||||||
❑ More Time in the Car | Convenience | addressed by | Interior | supports | ||||
❑ Autonomous Driving | drives | |||||||
Kinematics | ||||||||
Safety
Mobility
New Work
Health
Sustainability
Connectivity
Customization
Urbanization
paragon GmbH & Co. KGaA | May 2024 | 5 |
The Products and Customers
Air Quality Sensor
- Automatic control of the vehicle recirculation flap
- Reduction of dangerous emissions inside the cabin
- Advanced technology for detection of toxic gases and unpleasant smell
- High-sophisticatedSW-algorithms for detection of special traffic situations
- Over 150 million pcs. produced
DUSTDETECT
- Measurement of particulate matter outside and in-cabin
- Exterior and interior installation
- Laser sensor with optical particle counting
- Size discrimination PM1, PM2.5 and PM10
Key Customer
Comments
- Key Driver Urbanization
- Global urban population has grown by a factor of 6 since 1950; by 2050 68% of the global population will live in cities
o Due to globally high levels of air pollution in |
heavily frequented, urbanized areas politically |
induced strategies to reduce the health impacts |
of air pollution are gaining international |
importance |
▪ Key Driver "Well-being" inside the vehicle |
o Growing number of OEMs reacting to changing |
DUSTPROTECT
- High-voltageplasma filter cleans air inside vehicle's cabin by filtering particles and viruses
- Much better than state of the art filtration systems
- Saving space, energy, waste and costs in comparison to HEPA
- Constant efficiency over lifetime
Air Quality Improver
- Fresh air effect by artificial ionization
- Enhancing of well- being of vehicle passengers
- Fine dusts, gases and smells are bound by negative ions
- Reduction of germs and bacteria in vehicle interior through physical air treatment
Competitors
customers requirements by integrating health |
and wellness enhancing features into vehicles |
▪ Today, paragon is the widely recognized world |
market leader in automotive interior air quality |
management systems (AQS market share ca. 85%) |
▪ All sensor products (including the gas-sensor |
elements) are developed and produced in house |
▪ Going forward, paragon will further benefit from |
potentially higher take-rates for air quality solutions |
in passenger cars, particularly with the DUSTPROTECT |
virus filter system (e.g. Chinese OEMs as new |
customers for the filter system) |
paragon GmbH & Co. KGaA | May 2024 | 6 |
The Products and Customers
Loudspeakers
- Broad product spectrum incl. sound systems and signal processing
- Tweeters, midranges, subwoofers, headrest & ultimate speakers
- Special solutions like exciters, air motion transformers, high-temp. exhaust speakers, external speakers
- Small to high volumes, entry to award-winninghigh-end levels
- White label branding possible (e.g. B&O, Bespoke Audio, ETON)
Instruments
- Market leader with very well-known chrono-
- meters, analogue clocks, compasses and control applications
- The choice for premium & luxury cars
- Many more analogue and hybrid instruments for any use case
- Own design team to meet any customer requirement
- Inhouse stepper motor and plastic parts development and mass production
Microphones
- Multiple use cases such as voice assistance, vehicle noise control, handsfree and in-car
communication, road and wind noise cancellation, external microphones for autonomous driving
- Clever combination of acoustical mechanics & adaptive electronic filter
- Very low wind sensitivity
- Analogue and digital interfaces
- Cutting edge tech and efficient manufacturing
Wireless Charging
- High efficiency wireless charger based on Qi- standard
- Patented active cooling system
- Self diagnostic
- Member of Wireless Power Consortium (WPC) since 2013
Key Customer
Competitors
Comments
- Key Driver Adoption of smartphones
- Popularity of smartphones driving the demand for integrated in car infotainment systems to perform tasks hands-free
- Key Driver Cloud technology
- Cloud technologies enable live media streaming features and enhance end user convenience, while using infotainment systems
- Key Driver Regulation
- From July 2019, an "Acoustic Vehicle Alerting System" (AVAS) is mandatory in the EU for hybrid electric and pure electric vehicles
- paragon is well renowned for superior acoustics, customizable design and best-in-class sound systems
- paragon's analogue instruments and displays are characterized by their exceptional design, and high-quality materials
- Easy aftermarket upgrades paired with over 30 years of loudspeaker experience
- The Interior division is an exciting business unit with wide portfolio and a lot of opportunities
paragon GmbH & Co. KGaA | May 2024
7
The Products and Customers
Spoilers
- Electro-mechanicalsystems for high variety of vehicles
- Application in sportscars, hatch, station cars, SUVs, e-vehicles & trucks
- High innovation and realization competence
- Range extension for e-vehicle by reduction of air resistance
Folding Tables
- Special folding system to minimize space
- Various electronic interfaces (wireless charging, USB-C, displays and keyboards
- Lightweight through use of magnesium and aluminum
- Resists head impact
- Meets various crash requirements
Actuators | Key Customer | |
- Drive systems for active spoilers and seat adjustment
- Integrated electronics and sensors for advanced vehicle architecture
- Multi-stagegear reduction with powerful DC-motors
- Fast operation of heavy loads
Special Kinematics
- Tailor-madesolutions with cost- effective development
▪ Electrical lowering | Competitors |
mechanism of hood | |
ornament | |
- Anti-theftand pedestrian crash protection
- Wind deflectors for convertible cars and motorcycles
- Easy operation with 3D-movement
paragon GmbH & Co. KGaA | May 2024
Comments
- Key Driver Efficiency
- Aerodynamic drag or wind resistance is considered a primary concern in vehicle design
- Key Driver Better mileage
- As weight saving is more complicated in electric vehicles, aerodynamic drag plays an essential role in determining an electric vehicle's range
- Key Driver Vehicle stability
- With faster and sophisticated vehicles, rear spoilers play a major role regarding safety concerns from vehicle aerodynamics
- paragon is the world's leading company in the fields of active mobile aerodynamics
- China is identified as growing market for aerodynamic solutions; paragon received various orders from Chinese OEMs and leads this market as well
- With innovative technical solutions, paragon increases the efficiency and the comfort of cars' moving parts, both interior and exterior
8
The Products and Customers
Battery Management Systems | Traction Batteries | |||
▪ | Huge background | ▪ | Lightweight concepts | |
with ECU projects | ▪ | Use of Flow-Shape- | ||
▪ | Predictive algorithms | Design technology | ||
▪ | Intelligent balancing | ▪ | Embedded battery | |
▪ SW-based safety concept incl. top- | safety | |||
edge SOC/SOH-calculation | ▪ "Lord of the cells" battery | |||
▪ New quiescent current concept | management | |||
(deep-sleep and transport modes | ||||
for extended shelf life) |
Today
Key Customer
Comments
- Key Driver Electromobility
o Ongoing demand of customers for battery |
solutions which are new in this field and not |
the big players yet |
▪ Key Driver Lightweight |
o OEMs searching for technologies to save |
weight and costs |
▪ paragon develops, produces and supplies high- |
sophisticated lithium-ion battery systems |
▪ The product portfolio has strong advantages because |
Flow-Shape-Design
- Expanded foam as case for battery systems and modules
- Substitution of conventional metal housing
- Less weight/space/costs
- Absorption of shocks/vibration/ shocks/temperature
- Licenses available
Consulting
- Technology transfer in regards of Flow-Shape-Design
- Projecting and realization of production lines
- In-houseproduction of test equipment
- Turn-keyprojects
Competitors
of lithium-ion and FSD-technology, paired with BMS |
incl. predictive algorithms |
▪ The portfolio contains of: |
- Cutting-edgebattery management systems (BMS)
- Traction batteries characterized by lightweight design and excellent system safety
- There are major potential order intakes over the coming years that would result in a beyond market growth curve and which is not yet considered within the forecasted figures
paragon GmbH & Co. KGaA | May 2024 | 9 |
paragon´s Premium Automotive Customers 2023
% of total Revenues 2023 | |||
15,1% | |||
29,7% | |||
12,5% | |||
2023 | |||
9,3% | 6,2% | ||
China | |||
6,1% | |||
4,8% | 16,1% | 24% | |
19% | |||
Other Customers | 11% | ||
9% | |||
(w/o China) | 8% | ||
Other | |||
29% | Customers | ||
Tenure in Years
> 28
> 25
> 23
> 21
> 20
> 20
Single Source Quota
90%
Comments
- paragon is a trusted partner and supplier of choice for global blue-chipcustomers
- Top 10 customers account for approx. 83% of the company's total revenue and have an average tenure of 17 years
- For the vast majority of customers (approx. 90%) paragon is the single source, demonstrating high satisfaction and loyalty
- As a midsize automotive Tier 1-supplier, paragon was able to successfully position itself in interesting growth segments
- Through the blue-chip customers, paragon has a broad network at the core of the automotive industry
paragon GmbH & Co. KGaA | May 2024 | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
paragon GmbH & Co. KGaA published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 13:53:03 UTC.