Extra questions from Incap’s Q&A session at the CMD held on 17 November 2022
Yesterday, Incap held its first CMD. There were a lot of questions from the online audience that we did not have time to answer in the given timeframe. In addition to the questions that were already answered during the presentations or the Q&A session, we are now publishing extra Q&A.
Q: Would it be possible to give us a very rough breakdown of sales by segment? eg 10% medical, 15% automotive etc. Thank you.
A: We do not provide a breakdown of sales by segment. As mentioned, we have customers from many industries, but a lot of the business is related to green energy and electrical mobility.
Q: You mentioned entering the Tier1 EMS projects. How would that change your financial profile?
A: Incap´s decentralised organisational model is scalable so even with large projects or with significant growth there is no need for additional organisational layers.
Q: To Murthy – Could you talk about your relation to your biggest customer? How has that developed over time and much of your customer’s production are you producing?
A: As an EMS manufacturer we cannot give detailed information about our customers, unless specifically agreed with them. As mentioned, Incap has grown with the growth of its customers’ business aims to build long-term customer relationships as a strategic partner and by providing a wide scale of services to the customers.
Q: The head of India briefly mentioned a possible fourth plant in India. What kind of order security do you need before you start building this, and is it possible to guess when construction might start?
A: Incap will base very large investments on firm customer delivery plans and all major investments will be communicated as stock-exchange releases to the market. Incap´s investments are demand driven.
Q: Could you give us some colour about the outlook for 2023? For instance, what kind of sales level can we expect compared to Q422?
A: As usual, we will give our outlook for 2023 in the Financial Statements Release, which is usually published in February.
Q: What benefits do you expect to get from centralising sourcing without affecting agility?
A: Incap´s units are responsible for sourcing, therefore it is not a centralised function. Incap´s Group Sourcing Lead will drive strategic projects that are benefiting all the units. He will give additional support and manage sourcing strategy and large supplier accounts. This work will not sacrifice agility.
Q: Could you talk about your incentives as management for Incap? Is it linked to revenue growth, margin, etc?
A: In April 2022, the Board of Directors of Incap Corporation decided to establish a new long-term incentive plan for the Group´s key employees. The aim of the plan is to align the objectives of the shareholders and key employees for increasing the value of the company in the long term, to retain the key employees at the company, and to offer them a competitive reward plan based on acquiring, earning and accumulating the company’s shares.
During the performance period 2022–2024, the rewards are based on the Group’s cumulative operating profit (EBIT). During the performance period 2022–2024, the CEO and other Incap Management Team members form the target group of the incentive plan. The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of an approximate maximum total of 30,191 Incap Corporation shares, including also the proportion to be paid in cash.
Read more about the incentive plan on Incap’s investor pages.
More about the remuneration in the Remuneration Report.
Q: If Incap is a good investment, why is the insider ownership so low? (<2%)
A: Most of the Board of Directors and the CEO currently possess Incap shares.
Q: What are the 3 priorities currently for the CFO?
At the moment, among other things, these are in focus
- Short and long-term financial and investments planning
- Profitability and cash flow related development projects
- M&A work
Q: When will the dividend be paid?
A: To secure funds for the execution of the growth strategy of Incap and due to uncertainties in the global economy and political situation, the Annual General Meeting held on Friday, 29 April 2022, authorised the Board of Directors to decide on a distribution of dividend of a maximum of EUR 0.16 per share for the financial year 1 January 2021 to 31 December 2021, to be distributed in one or several instalments at a later stage based on the Board of Directors assessment. The authorisation is valid until the commencement of the next Annual General Meeting. The Board of Directors have not yet utilised this authorization.
Q: Regarding the management change in Estonia, could you talk about the reasons behind the change?
A: Incap is currently in a very fast development stage, and we are constantly adapting to the new needs and challenges related to this rapid growth, as well as to the constantly changing conditions in the market and the world. I thank Greg for his time in Incap and his contribution to the team’s work and to continue the great development at Incap Estonia, I have full confidence in our great Estonian Team who has made all the great results possible.
Q: Could you look into publishing standard quarterly reports instead of half year updates as now?
A: Incap will look into this topic.