By Stephanie
09 Nov 2023
Financial results

Paragon ID publishes its full year results 2022-2023

Sub Heading
+47% growth in annual sales
Adjusted EBITDA up +42% to €14.7m
Net profit: €0.2 m

Full-year sales 2022/23: €192 m, up +47% (+44% organic)

Paragon ID has published its consolidated results for the financial year 2022/2023, ending June 30, 2023, and its revenue figures for Q1 2023/2024. The annual financial accounts have been received by the board of directors and the audit report has been issued by the statutory auditors. 

At the end of the 2022/23 financial year, Paragon ID's consolidated sales totalled €192 m, an overall increase of +47%, of which +44% was organic growth, i.e. measured at constant exchange rates and on a like-for-like basis.

This sustained growth is the result of double-digit annual growth across all divisions in 2022/23: +44% for the Transport & Smart Cities division (36% of 2022/23 revenues), +44% for the Track & Trace & Brand Protection division (33% of 2022/23 revenues), +14% for the Payment division (17% of 2022/23 revenues) and +91% for the e-ID division (14% 2022/23 revenues).

+42% growth in adjusted EBITDA in 2022/23 - Adjusted EBITDA margin of 7.7%

At the end of the 2022/23 financial year, Paragon ID achieved adjusted EBITDA2 of €14.7 m, up +42% on the 2021/22 financial year. Against a backdrop of strong business growth, the gross margin rate declined slightly from one financial year to the next due to (i) a less favourable business mix in 2022/23 than in 2021/22 due to a higher proportion of product sales (passports, tickets, travel cards, etc.) compared with licences and recurring revenues from platforms, (ii) the weighting of subcontracted activities, and (iii) higher raw material costs and tensions in supply chains, most of which are ultimately passed on to customers in their selling prices.  

In terms of operating costs, however, the sustained growth has enabled the absorption of fixed costs more effectively, notably in personnel costs, which rose by a limited +26%.
The adjusted EBITDA margin was 7.7%, compared with 7.9% a year earlier.

After taking into account net depreciation, amortisation and impairment charges, which were virtually unchanged from one year to the next, recurring operating income was largely positive at €4.2 m, compared with a recurring operating loss of €0.3 m a year earlier.

The financial result, comprising interest on financial debt and factoring, rose to €-3.4 m from €-2.1 m in 2021/22, reflecting the increase in bank debt to support acquisitions, the financing of working capital requirements and the effects of rising interest rates.

After a tax charge of €0.6 m, net profit for the year was €0.2 m, compared with a net loss of €2.5 m in 2021/22.

For more detailed information on the balance sheet and the update on the simplified public offer for Paraghon ID shares, read the full press release here

Revenues for the 1st quarter 2023/24: €51.4m, up +22%

Transport & Smart Cities posted growth of +24% in the first quarter of the year, with all geographical regions benefiting from the increase in passenger traffic in urban transport. 

Track & Trace & Brand Protection recorded a -6% quarterly decline, especially in EMEA (Europe, Middle East and Africa). Activities linked to product traceability (Tags, IoT & RFID) continue to be held back by economic uncertainties and difficulties in supply chains. Business momentum remains strong in baggage tags for the airline industry. 

The Payment division reported stable sales for the quarter (-0.3%), driven by sales of gift cards, RFID modules for contactless payment, AmaTech’s licence revenues and sales of Paragon ID’s proprietary contactless metal payment cards, which will be delivered more rapidly in 2023/24.

Continuing to benefit from large deliveries of “Data Pages” for passports and ID cards following major orders received at the end of 2022, the e-ID division recorded quarterly growth of +134%.