paragon GmbH & Co. KGaA

Investor Presentation • Aug 20, 2025

paragon GmbH & Co. KGaA Earnings Call H1

Delbrück I August 20, 2025

Agenda

1.

• Executive Summary
• 2. The Products and Customers
• 1. The Financials
• 1. The Outlook

Agenda

Executive Summary

• 2. The Products and Customers
• 1. The Financials
• 1. The Outlook

Executive Summary

Overview

• ❑ 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 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 to moving market trends

paragon GmbH & Co. KGaA | August 2025

Executive Summary

Agenda

• 1. Executive Summary
• 2. The Products and Customers
• 1. The Financials
• 1. The Outlook

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Agenda

• 1. Executive Summary 2. The Products and Customers
• 1. The Financials
• 1. The Outlook

Published Financial Highlights H1/2025

Prognosis FY25E

• Automotive, our core business
• Consumer Products, our new endeavor are summarized
• ❑ On the following pages, the sectors are presented and explained separately for better transparency

P&L Automotive Sector first 6 Months 2025

P&L 1 Comments st half-year 2025 – (in €000') – Automotive Sector

… as of June 2025

	st 1 half-year 2024	% of total revenue	Actual Jan – Jun 2025	% of total revenue
Total revenue	75,360	100.0%	55, 438	100.0%
Own work capitalized	1,645	2.2%	3,127	5.6%
Other operating income	2,831	3.8%	5,498	9.9%
Total output	79,836	105.9%	64,063	115.6%
Material costs	(42,023)	55.8%	(29,081)	52.5%
Personal costs	(21,180)	28.1%	(18,820)	33.9%
Other costs	(8,121)	10.8%	(7,468)	13.5%
EBITDA	8,512	11.3%	8,695	15.7%
Depreciation	(4,894)	6.5%	(3,106)	5.6%
Amortization (IAS 38 / PPA)	(1,440)	1.9%	(1,887)	3.4%
EBIT	2,178	2.9%	3,702	6.7%
Financial results	(3,222)	4.3%	(3,218)	5.8%
EBT	(1,044)	(1.4%)	485	0.9%
Taxes	33	0.0%	(157)	0.3%
Net income	(1,011)	(1.3%)	327	0.6%

• ❑ Sale of profitable starter battery business is main reason for revenue reduction
• ❑ Weaker sales figures in China from our TOP 3 key-customers have made themselves felt
• ❑ Market very volatile with rescheduling at very short notice
• ❑ China: Revenues with local OEMs and budget cars as expected; lower demand for high-priced cars from Chinese and European OEMs
• ❑ US-tariffs had low influence (on revenue TEUR 115, on material TEUR 43)
• ❑ EBITDA-margin with 15.7% above plan due to:
  • Ongoing savings in material costs & through insourcing
  • Optimization of processes and costs in all plants
  • Reduction of temporary workers as well as direct/indirect personnel
  • Relocation of production to Croatian plant
  • Price increases in regards of lower quantities

Continuous Improvement in Profitability despite lower Sales

Comparison Q2/2025 vs. Q1/2025		–	(in €000') –		Automotive Sector		Comments
… as of June 2025
	nd 2 Quarter 2025	% of total revenue	st 1 Quarter 2025	% of total revenue	Deviation in EUR	Deviation in %	2 nd half of the year:
Total revenue	26,091	100.0%	29,347	100.0%	(3,257)	(11.1%)
Own work capitalized	1,434	5.5%	1,693	5.8%	(260)	(15.3%)	Macan and Panamera)
Other operating income	4,169	16.0%	1,329	4.5%	2,840	213,8%
Total output	31,994	121.5%	32,370	110.3%	(676)	(2.1%)	production
Material costs	(14,524)	55.7%	(14,557)	49.6%	(33)	(0.2%)	Launch of new product in China ▪
Personal costs	(9,093)	34.9%	(9,727)	33.1%	(633)	(6.5%)
Other costs	(3,889)	14.9%	(3,579)	12.2%	310	8.7%	EBITDA in 2nd ❑ half year increasing due to:
EBITDA	4,188	16.1%	4,507	15.4%	(320)	(7.1%)	Higher revenues ▪
Depreciation	(1,512)	5.8%	(1,594)	5.4%	(81)	(5.1%)
Amortization (IAS 38 / PPA)	(1,198)	4.6%	(690)	2.3%	508	73.7%
EBIT	1,478	5.7%	2,225	7.6%	(747)	(33.6%)
Financial results	(1,618)	6.2%	(1,600)	5.5%	19	1.2%
EBT	(141)	(0.5%)	625	2.1%	(766)	122.5%
Taxes	(144)	0.6%	(14)	0.0%	130	(964.7%)
Net income	(284)	(1.1%)	612	2.1%	(896)	146.5%

❑	Outlook of Automotive sector for 2025 still intact
❑	OEMs in Europe and China announce a catch-up effect in nd 2 half of the year:
	Increase of sales with main customer Porsche (992, e ▪ Macan and Panamera)
	▪ Audi's new volume-platforms (Q5, A5 and A6) now in full production

• Launch of new product in China
• ❑ EBITDA in 2nd half year increasing due to:
  • Higher revenues
  • Ongoing reduction of personnel and material costs
  • Profitability of paragon Kunshan (China) grows through new low-cost sensor element for AQS

Continuous Improvement in Profitability despite lower Sales

Comparison Q2/2025		vs. Q2/2024 –	(in €000') –		Automotive Sector		Comments
… as of June 2025
	nd 2 Quarter 2025	% of Total revenue	nd 2 Quarter 2024	% of Total revenue	Deviation in EUR	Deviation in %	savings
Total revenue	26,091	100.0%	34,442	100.0%	(8,351)	(24.2)	❑ EBIT-margin almost doubled
Own work capitalized	1,434	5.5%	826	2.4%	608	73.6%
Other operating income	4,169	16.0%	1,654	4.8%	2,515	152.1%
Total output	31,994	121.5%	36,922	107.2%	(5,229)	(14.2%)	further increase of EBITDA
Material costs	(14,524)	55.7%	(18,382)	53.4%	(3,858)	(21.0%)	Material savings: EUR 2.1m
Personal costs	(9,093)	34.9%	(10,508)	30.5%	(1,415)	(13.5%)	o
Other costs	(3,889)	14.9%	(3,642)	10.6%	247	6.8%	Headcount reduction: EUR 0.5m o
EBITDA	4,188	16.1%	4,390	12.7%	(202)	(4.6%)
Depreciation	(1,512)	5.8%	(2,437)	7.1%	(925)	(37.9%)
Amortization (IAS 38 / PPA)	(1,198)	4.6%	(720)	2.1%	478	66.4%
EBIT	1,478	5.7%	1,233	3.6%	245	19.8%
Financial results	(1,618)	6.2%	(1,618)	4.7%	0	0.0%
EBT	(141)	(0.5%)	(385)	(1.1%)	245	63.5%
Taxes	(144)	0.6%	(148)	0.4%	(-4)	(2.8%)
Net income	(284)	(1.1%)	(533)	(1.5%)	249	46.7%

	Comments

• ❑ Comparison with 2nd quarter 2024 shows benefit from cost savings
• ❑ Same EBITDA-amount achieved with EUR 8.4m less revenue
• ❑ EBIT-margin almost doubled
• ❑ Going rate of improvements in FY24A and additional improvements in FY25E EBITDA will lead to the expected further increase of EBITDA
  • o Material savings: EUR 2.1m
  • o Headcount reduction: EUR 0.5m
  • o Operational plant improvements: EUR 1.8m

Substantial Debt Reduction

EUR-Bond: Buy-back Program Update

-

• _ Nominal Value: ❑ EUR 45.2m (as of December 31, 2024, thereof EUR 1.3m owned by paragon)
• _ Actual terms and conditions: ❑ Bond is due July 5, 2027
• _ Interest Rate: ❑ Interest rate depends on net leverage ratio
  • ❑ Interest rate is currently at 8.75%
• _ Buyback program: ❑ paragon proceeds with the communicated repurchasing program (EUR 20.2m nominal value) until June 2027
  • ❑ paragon has to comply with the Market Abuse Regulation -> buy back very limited due to low daily trading volumes (app. EUR 0.1m per month)
  • ❑ No further obligations until final maturity on July 5, 2027, of EUR 40m (est.)

_ Structure of repayment in 2027 in preparation

Focus on Working Capital Management is a continued effort

▪ There is not much more potential to improve this position

Intangible Assets on a stable level

Intangible assets ❑ 2022: Decrease of EUR 13.7m due to sale of paragon semvox to CARIAD ▪ ▪ deal with Clarios 2024: Decrease of EUR 3.8m for impairment of an asset from the past ▪ H1/2025: New activities slightly overcompensated amortization ▪ Thereof EUR 7.9m intangible assets and EUR 22.3m IAS 38 projects, which are ▪ both amortized on a scheduled basis		In Sep. 2023
		2023: Decrease of EUR 3.7m due to planned amortization as well as the asset

Goodwill unchanged

	In Sep. 2023
❑	Goodwill
	Goodwill amounts to EUR 5.7m ▪
	Goodwill related to paragon semvox GmbH ▪ (EUR 16.1m) (73.5%) sold to CARIAD SE
	Reduction of Goodwill by appr. ¾ (EUR 16.1m) ▪
	EUR 5.1m relates to paragon movasys GmbH (largest BU) ▪
	EUR 0.3m each are attributable to SphereDesign GmbH and ETON ▪ Soundsysteme GmbH

Agenda

• 1. Executive Summary
• 2. The Products and Customers
• 1. The Financials
• 1. The Outlook

paragon´s Premium Automotive Customers – 1 st Half Year 2025

P&L Consumer Products first 6 Months 2025

st P&L 1 half-year 2025 –	Comments
	Actual Jan – Jun 2025	% of Total revenue	Not capital intensive ❑
Total revenue	5	100.0%	❑ Limited order volume, limited risk
Own work capitalized Other operating income	0 0	0.0% 0.0%	20% of paragon's total sales
Total output Material costs	5 (3)	100.0% 0.0%	made only a small contribution
Personal costs Other costs	(206) (120)	0.3% 0.2%
EBITDA Depreciation Amortization (IAS 38 / PPA)	(324) 0 0	0.0% 0.0%	campaigns and Christmas business
EBIT	(324)
Financial results	0	0.0%
EBT	(324)
Taxes	0	0.0%
Net income	(324)

Treated as pure add-on to the Automotive business ❑
Not capital intensive ❑
❑ Limited order volume, limited risk
In the long-term very lucrative sector with a share of approx. ❑ 20% of paragon's total sales
❑ New additional business with Consumer Products has so far made only a small contribution
Lengthy activation of sales channels (Amazon, Otto, MediaMarkt, ❑ Saturn, eBay) was responsible for that, but now completed
❑ Plan fulfillment depends on the success of various sales campaigns and Christmas business

Consumer Product Portfolio's Starting Point

Consumer Products – Business Unit Interieur Comments

TELEFUNKEN Licensing

• Exclusive license for audio products in Europe, leveraging strong brand recognition
• Regulatory approvals secured: CE-certified, Bluetooth qualification completed
• Multi-channel distribution: Amazon, MediaMarkt, Kaufland, Otto, Saturn, eBay, direct-to-consumer (B2C)
• Phased roadmap: ODM launch (Year 1-2) → Proprietary tech integration (Year 3-4) → In-house production (Year 5+)
• Revenue model: High-margin licensing & B2C expansion, reducing capital intensity

ETON – Premium Audio Expansion

• High-end speaker brand belonging to paragon with strong home hi-fi & automotive market presence
• Growth strategy: Expansion into gaming headsets, home audio, and business communication
• B2C shift to drive margins, synergies with TELEFUNKEN for distribution & technology
• Key markets: Europe & North America, with long-term China expansion

Headphones Bluetooth Earbuds Loudspeaker

• ❑ Headphones chosen as first product
• ❑ Market research institute Statista forecasts German market in 2025 for EUR 1.14b
• ❑ Media analysis by Burda*): 30% of all Germans use headphones when streaming, for example
• ❑ paragon's headphones are rated very positively (e.g. by https://www.kopfhoerer.de/)
  • much better sound compared to much more expensive competitors
• ❑ Complete product portfolio under construction (different headphones, mobile speakers, home-cinema)

*) Burda → Hubert Burda Media, one of Germany's largest media and investment companies with an international focus

paragon GmbH & Co. KGaA | August 2025

Order-Pipeline not influenced by global Market Situation

Spotlight on Main Customer Porsche

_ Porsche's weaker financial performance in 1st half-year 2025 is in the news

• _ Reasons:
  • _ High financial pressure due to US tariffs and weaker Dollar
  • _ Dramatic down-turn of deliveries in China (./.28%) not yet fully compensated by higher deliveries in US (+10%) and Overseas (+10%) – in total ./. 6% deliveries world-wide
  • _ Postponed launch of e-Macan – now becoming the best-seller
  • _ 992 sales suffered from model change – paragon now producing above contracted level
  • _ Luxury e-market smaller than expected, but Taycan leads this market

_ Note: Porsche's financial performance isn't a mirror for paragon's outlook in regards of its largest customer

• _ For paragon, only the numbers of delivered Porsches with paragon-content are key!
• _ 992 is paragon's most important car

Spotlight on Chinese Market

paragon Automotive Kunshan Co., Ltd. – Re-located State-of-the-Art Facility Comments Reception area Office Spaces Production Area Kunshan

• ❑ The contribution of paragon Kunshan (China) is expected to grow:
  • Different from paragon's approach in regards of premium OEMs mainly in Germany, paragon's customers in China are producing mainly budget cars
  • Main customer is Geely, but due to existing orders, BYD is expected to become the largest Chinese customer
  • New products are developed locally and fitting to the demand of Chinese market
  • Localizing of purchasing increases margin

Summary

• ❑ Forecast for Automotive sector for 2025 still intact – our core business!
• ❑ Plan fulfillment 2025 in new Customer Products sector depends on the success of various sales campaigns and Christmas business
  • ➢ Treated as pure/limited risk add-on to the Automotive business

Disclaimer

• _ This presentation is given to you in strict confidence. By attending the presentation, you agree that no part of this presentation or disclaimer may be disclosed, distributed or reproduced to any third party without the consent of paragon GmbH & Co. KGaA ("paragon").
• _ This presentation is being provided for the sole purpose of providing the recipients with background information about paragon's business. This presentation, including the information contained in this disclaimer, does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither the presentation, disclaimer nor anything contained in them forms the basis of any contract or commitment. This presentation does not purport to summarize all information that an investor should consider when making an investment decision. It should be read in conjunction with paragon's other continuous disclosure announcements. Before making an investment decision you should consider whether it is suitable for you in light of your own investment profile and objectives and financial circumstances and the merits and risk involved.
• _ No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information, opinions and conclusions contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation ("forward-looking statements"). Such forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of paragon and its Directors) which may cause the actual results or performance of paragon to be materially different from any future results or performance expressed or implied by such forward-looking statements. Forward looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance.
• _ To the maximum extent permitted by law, neither paragon nor its related corporations, directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.
• _ You represent and confirm by attending and/or retaining this presentation, that you accept the above conditions.

paragon GmbH & Co. KGaA Bösendamm 11 33129 Delbrück

E-Mail: info@paragon.ag

Tel.: +49 (0) 5250 9762 - 0

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