Paragon ID (Euronext Paris - FR0011980077 - PID), the European leader for identification solutions, particularly for Transport & Smart Cities, e-ID, and Traceability & Brand Protection, has published its consolidated turnover for the first half of the financial year 2017/18 (from the 1st of July to the 21st of December).
| €M – IFRS Norms |
|Turnover - 1st half-year||52,1||23,7||+119%||55,0|
The 1st half of 2016/17 is taken from the consolidated financial data of the Paragon Group's Identification Division. Prior to finalising the merger, the Paragon Group reorganised its division by grouping all of its "Identification" subsidiaries under a holding company headed by Paragon France SAS on February 28, 2017. The reorganisation of the Identification Division of the Paragon Group resulted in the inclusion of the new Paragon France SAS subsidiaries within the scope of consolidation as from 1 March 2017. Consequently, the consolidated first half of 2016/17 did not yet include these various subsidiaries.
The 1st half of 2016/17 pro forma was established as if the merger had taken place from July 1, 2016. The turnover of the 1st semester 2016/17 consisted solely of the former ASK's activities.
- Activity during the first half-year of 2017/18
In the 1st half of the 2017/18 financial year, Paragon ID recorded consolidated revenues of €52.1 million (€24.7 M for the 2nd quarter), up more than 119% over the half-year period. The consolidated turnover for the first half of 2016/17 did not yet include all the subsidiaries of the Identification Division of the Paragon Group (consolidation effective since March 1, 2017) or the ASK contribution (consolidated since May 1, 2017).
As was previously notified, a non-strategic activity was transferred to another entity of the Paragon Group, prior to the Identification division's merger with ASK. This activity represented €0.6 million in sales in the 1st half of 2016/17.
On a pro forma basis, revenues for the first half of 2017/18 fell by 5%. At constant exchange rates and taking into account the transfer of the non-strategic activity, the decline for this same period is limited to -3%.
- Recent events
The last quarter of the 2017 calendar year was also marked by the implementation of the industrial reorganisation plan announced in early September. This included the gradual shutdown of production at the Mouans-Sartoux unit, which is now refocused on R&D, and the consolidation of the production capabilities at Argent-sur-Sauldre (France) and Bucharest (Romania). This rationalisation of the company's European industrial operations, which has caused some disruption including some orders being rescheduled to the 2nd half of the 2017/2018 financial year, has now been completed. Given the skill upgrades required at both sites, the company will return to a maximum production capacity in March/April.
The Bucharest unit, in particular, will benefit from the relocation to Europe of the production of elements for the European market (inlays, smartcards, etc.), which were previously produced in China. This move will enable Paragon ID to provide a more efficient and quicker service to these local customers, from a secure facility in the European Union, whilst developing this new industrial site cost-efficiently.
In China, Paragon ID teams will now focus on the management of industrial third-tier suppliers and especially on the development of the commercial activity throughout the Asian continent.
As a reminder, the reorganisation aims to create a strong industrial efficiency platform to improve the global competitiveness of the business by around €3 million over the full year, through margin gains and savings on fixed costs.
In terms of its sales organisation, the Group also completed the redeployment of the teams from different entities at the end of 2017 in order to optimize the commercial coverage of its main markets.
- Activity by business lines
The People ID activity, which includes the e-ID, Transport & Smart Cities and Gaming businesses, reported a half-year turnover of €36.7 million, down 6% on a pro forma basis, representing -4% at constant exchange rates.
After a strong 1st quarter, the e-ID activity was down in the 2nd quarter due to a cyclical drop in the shipments of US passport inlays. Outside of this fact, the activity is growing by 18%, particularly driven by new European countries and the rise of driving licences being issued in the US.
During the half-year period, the company recorded new orders for the Transport & Smart Cities activity (London, Île-de-France region, Marseille, Turin), which will gradually and significantly contribute to the 2nd quarter figures.
Product ID, which combines the activities of Product Traceability & Brand Protection, generated revenues of € 15.4 million, down by 4% on a pro forma basis (identical at constant exchange rates). As previously stated, this decline is mainly due to the transfer of a non-strategic business to another entity of the Paragon Group (€0.6 M turnover in 2016/2017). Without the impact of this operation, the Product ID activity recorded a slight growth in the first half-year.
The rapid growth of RFID Tags (+12% average annual growth between 2017 and 2020 / Source: IDTechEx), is also prompting the business to strengthen its commercial and marketing investments in this area. For the 1st half-year, the RFID tickets and tags activities as a whole (including gaming) recorded a growth of 17%.
- Financial diary 2018
|Half-year results 2017/2018||29 March 2018|
|Q3 turnover 2017/18||24 April 2018|
|Full year turnover 2017/18||29 August 2018|
|Annual results 2017/18||26 October 2018|
These dates are given for information only, they are likely to be modified if necessary. All publications will take place before the opening of the Euronext markets.
About Paragon ID
Paragon ID is a leader in identification solutions, in particular in the e-ID, Transport & Smart Cities and Traceability & Brand Protection sectors. Using the latest technologies such as RFID and NFC, Paragon ID provides smart cards, tickets, labels and tags to worldwide clients in diverse markets including public transport, manufacturing, logistics, gaming and retail.
Paragon ID employs more than 600 staff, with manufacturing sites in three continents (US, Europe and Asia), close to its customers.
Paragon ID is a part of Paragon Group, which is a leading provider of Identification and Customer Communications services, and has a total of more than €650 million turnover and close to 5,000 employees. Paragon Group combines generations of experience with the latest innovations in technology and smart data to enable responsive and meaningful interactions between organisations and their customers. For further information about Paragon Group, visit www.paragon-europe.com
Paragon ID is listed on Euronext Paris. Share name: Paragon ID - ISIN code: FR0011980077 - Mnemonic code: PID - Number of issued shares: 58 286 819
More information at Paragon-id.com