Incap Group President and CEO Otto Pukk
For all of us, as companies and individuals, 2020 was challenging year marked by the breakout of the coronavirus pandemic. For Incap, the operating environment caused big uncertainties for a period of time. Our actions during the year focused on keeping our personnel safe and deliveries to customers running smoothly. The pandemic-related lockdowns and consequent factory closures were a challenge that might have held back our plans, but overall, I am happy to conclude that we were able to navigate through the crisis and stay on the path with our growth strategy.
Our revenue in 2020 increased 50 per cent compared to the previous year and our adjusted operating profit grew 35 per cent. The growth was largely driven by the AWS Electronics Group acquisition, but the second half of the year also showed good organic growth. The profitability improvement was based on good development primarily at the Indian factory but also on synergy effects from the successful integration of AWS. After the pandemic-related closure of the Indian factory, the backlog was quickly cleared, and the activity increased even more than previously estimated due to new demand from existing customers.
The main milestones of our growth strategy in 2020 were the acquisition and successful integration of AWS Electronics Group, an oversubscribed rights issue as well as strong organic growth and the announced new investments in capacity at our factories, foremost in India.
The key integration projects of AWS Electronics Group in the UK, which was acquired in January, has been completed according to plan.
In November, we successfully completed our rights issue of 10.9 million euros. With the rights issue we were able to strengthen our capital structure, balance sheet and financial position and thus create conditions for the implementation of our growth strategy. The oversubscribed offering indicates indeed a strong confidence in our strategy. The EMS sector remains highly fragmented and we want to be an active player in the sector.
In addition to inorganic growth opportunities, we continue to see good demand from existing and new customers especially in India. In August we announced a further expansion of our factory in India. The expansion is proceeding well, and we expect the original factory expansion to be finalised early 2021 and the further expansion to be completed by the end of 2021. By then we will have 16,000 square metres of capacity there. During 2020, we also invested in new machinery in Slovakia and new assembly lines in Estonia.
As a globally operating electronics manufacturing services company and a growing organisation, sustainable operations are a must in achieving our goals. That is why we initiated a Corporate Responsibility program during 2020. We want to take the needs and expectations of our stakeholders even better into account and aim at maximising the positive impacts and minimising the negative economic, social and environmental impacts of our activities. As a result of the program, we also launched a renewal of Code of Conduct with plans to offer related training for all Incap’s employees during 2021. The Corporate Responsibility program served also as a vessel for the integration of the newly acquired factories and provided a platform for creating common processes. I am sure the program will help us also in the future to foster our unique company culture. Taking responsibility is an essential part of our entrepreneurial culture and it forms the basis for daily operations.
As a result of the AWS Electronics Group acquisition and recruitment activities in India and Estonia, the number of personnel at Incap has increased from 834 to 1,902. I am pleased to see the Incap family growing and I welcome everyone on board. I also want to thank all our employees for their outstanding resilience and flexibility during this tough year and our customers and other stakeholders for the trust they have placed in Incap.
Looking at 2021, we begin the year with a strong order book which will support our growth targets. We also continue to look at M&A cases that would represent a strong cultural fit and offer potential for geographical expansion. After the rights issue and subsequent loan repayment, our financial position is strong, which sets us up for our growth strategy and new investments in both organic and inorganic growth.