Otto Pukk Incap CEO and PresidentIncap Group President and CEO Otto Pukk

Our result despite the pandemic situation shows a solid performance by our personnel and is yet another proof of our strong business model, entrepreneurial culture and team spirit – my big thanks to the entire Incap team.

The strong revenue growth is due to growing use of electronics supported with megatrends such as digitalisation and IoT. Additionally, we have seen bigger interest in European manufacturing.

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In May–June, due to the coronavirus situation in India, we first had to close our factories there for a short period of time, then later we were granted permission to resume operations partially to support the manufacturing of critical electronic equipment including applications for healthcare. The restrictions were further relaxed for export industries in general.

Our profitability improved further due to our operational excellence based on high cost awareness and strong corporate culture.

In April, we increased our revenue and operating profit estimate for 2021. Despite the partial operations at the factories in India during May–June, our estimate is that our revenue, operating profit (EBIT) and adjusted operating profit (EBIT) for 2021 will be clearly higher than in 2020.

The global component availability situation is still challenging due to the growing demand, albeit as an EMS supplier Incap is less dependent on single component types.  We are nevertheless already seeing early signals of the component situation improving towards the end of the year and early next year.

In May, we decided to make an investment in a third factory in Tumkur, Karnataka, India. The construction project is planned to start in the third quarter, and the opening of the new factory is estimated to take place in the second quarter of 2022. Through the new capacity expansion, we will be able to respond to the increasing demand and serve our customers even better.

In the spring, we continued our strong commitment to corporate responsibility and joined the UN Global Compact initiative, and I am extremely proud of the team who made it happen. Acting in a responsible and trustful way is an integral part of our mission, strategy and operations.

The EMS market demand has continued strong despite the current short term coronavirus pandemic related challenges, and we see the strong trend continuing. The increasing need for green energy, medical equipment, emerging 5G and IoT ecosystems and the proliferation of electric vehicles contribute to the demand growth.

Consolidation in the EMS market still continues. After our rights issue last autumn, we are in a solid financial position should a good M&A opportunity arise. We are actively evaluating potential M&A opportunities with a strong cultural fit and potential for geographical expansion.

Looking at the remainder of the year, we see a lot of positive development as many of our existing and potential customers’ businesses are growing in sectors supported with megatrends. Incap has a strong role in enabling our customers to achieve their targets. We are thankful that Incap is well positioned in the market, has a strong market share and is able to support our customers’ growing businesses.