Incap Corporation’s President and CEO Otto Pukk
At the beginning of the year, our performance developed broadly in line with expectations and overall demand remained stable despite challenging market conditions. While the Lacon acquisition supported our revenue, due to some delayed component deliveries, certain orders were shifted into the second quarter. These component pushouts were mainly driven by increased demand in the AI and data centre segment, which has strained production capacity for components used in other segments and caused supply chain disturbances. In addition, foreign exchange rate movements impacted our result, and we are expecting to see increasing price pressure from component manufacturers going forward. Over time, we expect component availability to improve as manufacturers increase capacity, and we continue to work closely with our customers to identify alternative component solutions where needed.
Due to lower volumes and utilisation levels in Q1, our profitability was lower, but towards the end of the quarter, we saw volumes starting to recover, supporting a more positive development for the coming quarters.
The beginning of the year was also marked by the successful completion of the Lacon acquisition, and I am pleased to say that the integration is progressing well and according to plan, supported by strong collaboration and commitment across our teams.
Our order intake developed very positively during the quarter, laying an important foundation for the rest of the year. Order intake was particularly strong in the defence segment, where we achieved a record-high number of orders in the first quarter. As a result of successful sales activities, we have received larger defence orders for our new units in Germany and Romania, further strengthening our order book and visibility. Following the acquisition, we can already see a positive shift in our customer portfolio. Dependency on the largest customer is increasingly behind us as the share of other customers grows, reducing overall customer concentration risk.
During the first quarter, we continued to prepare Incap for the next phase of growth. In addition to investments in machinery, we have started updating our strategy and organisation, to support the new larger Incap and taking our lean decentralized management model to the next stage. This includes internal development initiatives aimed at further modernising operations and tools, such as a data lake project, as well as refinements to the management structure to enable stronger focus on organic growth in mature markets and M&A-driven growth and expansion in selected growth markets. Further details on these updates will be communicated later this year.
We finalised our Annual and Sustainability Report in the early part of the year and set our key sustainability targets for the year. Sustainability remains a core value and an integral part of how we run our business, supporting our operations, our customers and long-term value creation.
None of this would be possible without our people. As always, I would like to sincerely thank all our employees for their dedication, flexibility and teamwork during a demanding start to the year and throughout the integration of Lacon.
Our key priority continues to be the successful integration of Lacon into Incap and the focused development of the strengths and opportunities created by the combined business targeting organic growth.
With enhanced engineering capabilities, a strengthened order book and increasing exposure to selected high-growth segments, Incap is well positioned to continue executing its long-term growth strategy and creating value for its shareholders.
