paragon - Growing pains at Voltabox

H119 results reflected reasonably robust sales by the Automotive segments. However, despite strong H119 sales growth, Electromobility developed more slowly than expected, with H219 facing contract delays and supply chain issues. As a result, management greatly reduced group guidance in August. Voltabox is now expected to incur losses this year as opposed to moving to healthy profitability. We have cut our FY19 estimates accordingly and assume a lower growth path in FY20 as management focuses on resolving the issues. The need to start executing to plan is clear in order to rebuild investor confidence and improve liquidity.