Incap Group’s business review for January – September 2024 (unaudited)

This release is a summary of Incap’s business review for January – September 2024. The complete report is attached to this release as a pdf file and available on the company’s investor pages at www.incapcorp.com.

July – September 2024 highlights

• Revenue for the third quarter of 2024 amounted to EUR 61.8 million (7–9/2023: EUR 50.0 million), an increase of 23.4%. Excluding the impact of company’s largest customer, revenue grew 6.1%.
• Revenue grew 7.1% quarter on quarter.
• Adjusted operating profit (EBIT) was EUR 8.1 million (EUR 6.4 million) or 13.1% of revenue (12.7%). Year-on-year increase was 26.9%.
• Operating profit (EBIT) amounted to EUR 7.9 million (EUR 5.7 million) or 12.8% of revenue (11.4%). Year-on-year increase was 37.6%.
• Net profit for the period was EUR 4.9 million (EUR 4.4 million).
• Earnings per share were EUR 0.17 (EUR 0.15).

January – September 2024 highlights

• Revenue amounted to EUR 170.8 million (1–9/2023: EUR 179.2 million) of which EUR 28.2 million was attributable to US business acquired in July 2023. Year-on-year decrease was 4.7%.
• Excluding the impact of the company’s largest customer, revenue grew 23.6%.
• Adjusted operating profit (EBIT) amounted to EUR 21.3 million (EUR 26.2 million) or 12.5% of revenue (14.6%). Year-on-year decrease was 18.7%
• Operating profit (EBIT) amounted to EUR 20.6 million (EUR 24.5 million) or 12.1% of revenue (13.7%). Year-on-year decrease was 15.9%
• Net profit for the period was EUR 15.0 million (EUR 18.5 million).
• Earnings per share were EUR 0.51 (EUR 0.63).

Unless otherwise stated, the comparison figures refer to the corresponding period in 2023. This business review is unaudited.

Key figures

EUR million	7–9/24	7–9/23	Change	4-6/24	Change	1–9/24	1–9/23	Change	1–12/23
Revenue	61.8	50.0	23.4%	57.6	7.1%	170.8	179.2	-4.7%	221.6
Non-recurring items	0.1	0.1	-29.6%	0.1	-6.2%	0.2	0.9	-74.3%	1.1
Operating profit (EBIT)	7.9	5.7	37.6%	6.8	16.5%	20.6	24.5	-15.9%	28.2
EBIT, % of revenue	12.8%	11.4%		11.7%		12.1%	13.7%		12.7%
Adjusted operating profit (EBIT)*	8.1	6.4	26.9 %	7.0	15.9%	21.3	26.2	-18.7%	30.6
Adjusted EBIT*, % of revenue	13.1%	12.7%		12.1%		12.5%	14.6%		13.8%
Net profit for the period	4.9	4.4	11.8 %	5.1	-2.4%	15.0	18.5	-19.1%	19.8
Equity ratio	63.2%	58.1%		62.9%		63.2%	58.1%		60.6%
Net gearing	-8.4%	4.1%		-5.9%		-8.4%	4.1%		-7.7%

* Adjusted operating profit (EBIT) is an alternative performance measure. Adjusted EBIT excludes non-recurring items and purchase price allocation amortisation. Adjusted EBIT provides comparable information between different financial years on operating profit.

Outlook for 2024

Incap estimated 18 July 2024 the revenue in 2024 to be higher than in 2023 and the operating profit (EBIT) in 2024 to be at the same level as in 2023.

Incap specifies 25 October 2024 its guidance and estimates the revenue to be in the range of EUR 227– 237 million and the EBIT in the range of EUR 27.5-30.0 million.

Otto Pukk, President and CEO of Incap Corporation

It was great to see a strong third quarter for Incap despite the challenges in the EMS market. We continued to grow quarter to quarter, as anticipated. In the third quarter, we continued to focus on new customer acquisition, increasing sales to existing ones, and cross-selling opportunities. I am proud of our teams and the good developments in all units.

To bring out some highlights, our unit in India is returning to its higher output, and the team in the US has exceeded our pre-acquisition expectations and is showing excellent results. We had higher order levels and continued to work on driving synergies between our different teams, resulting in additional sales. We also worked on enhancing our processes and improving the management of ESG data in order to comply with the regulation.

Our revenue for the third quarter increased by 23.4% to EUR 61.8 million thanks to solid performance in all units. We also continued with strong profitability in double digits. Our year-on-year increase for EBIT was 37.6%, amounting to EUR 7.9 million.

To support our growth and maintain our competence and service excellence, we consistently evaluate new technologies and invest in our manufacturing. In the third quarter, our team in the UK worked on installing a modern vertical storage system in the factory. Meanwhile, our team in India implemented the installation of solar panels on the roof of the third and newest factory in Tumkur, improving the carbon footprint in our manufacturing.

We always aim to maintain a good dialogue with our customers and organised various customer and supplier events in Slovakia, as well as a customer day in October in Estonia. Our teams participated in several cooperative events and trade shows, while also placing strong emphasis on numerous internal events and trainings held for our employees. In August, we brought our Sourcing and HR teams together to focus on creating synergies across various areas, including sourcing, culture and values, ESG, and HR. This collaborative effort aimed to enhance our overall effectiveness. We are committed to continuously driving synergy effects and will continue to work together to achieve our goals.

We worked on finalizing our Double Materiality Assessment on group level with the help across all levels of our organization, laying a strong foundation for further development of our sustainability reporting in accordance with CSRD regulations. In October, we launched internal CSRD reporting to identify any gaps in the new reporting platform and ensure we are aligned with our goals and regulation requirements.

Our outlook for the year remains unchanged. Looking ahead, we must acknowledge the uncertainties in the market. Factors such as the economic slowdown in Europe, US elections, geopolitical tensions in Europe, Middle East and South-East Asia could all impact demand in the short-to-medium term. As expected with the increase in component availability, overall visibility in the market has reduced. However, we remain optimistic about the long-term outlook for electronics and the positive trends in the industry. We feel confident in Incap’s ability to tackle these potential changes in the market.

Our financial position remains strong, and we will continue to focus on pursuing M&A, concentrating on companies with a strong cultural fit and good profitability.

Financial reporting in 2025

Incap will publish its financial reporting schedule for 2025 in December 2024.

Webcast

Incap will hold a webcast on Friday, 25 October 2024 at 2:00 p.m. Finnish time. The result will be presented by Otto Pukk, CEO, and Antti Pynnönen, CFO, Incap Corporation.  

The live webcast can be followed at
https://events.teams.microsoft.com/event/c38b7542-8cc2-4c71-bb4f-a6a5d0d75d0d@abb82829-72d6-49fe-9638-f934f5da4760.

During the webcast, questions can be asked through the webcast Q&A function at the address mentioned above. The recording of the broadcast will be available on the company's investor pages at https://incapcorp.com/reports-and-presentations/ later that day.

The event is targeted for analysts, portfolio managers and the media. Welcome!

In Helsinki, 25 October 2024

INCAP CORPORATION
Board of Directors

Additional information:
Otto Pukk, President and CEO, tel. +372 508 0798

Distribution
Nasdaq Helsinki Ltd.
Principal media
www.incapcorp.com

Incap in brief

Incap Corporation is a trusted partner and full service provider in Electronics Manufacturing Services. As a global EMS company Incap supports customers ranging from large multinationals and mid-sized companies to small start-ups in their complete manufacturing value chain. Incap offers state-of-the-art technology backed up by an entrepreneurial culture and highly qualified personnel. The company has operations in Finland, Estonia, India, Slovakia, the UK, USA, and Hong Kong and employs approximately 2,300 people. Incap’s share has been listed on Nasdaq Helsinki Ltd stock exchange since 1997.