1. How is the employee satisfaction in the company? What is the employee turnover rate compared to the average in the industry? In the long run, I see this as an important topic. Also, the competition in the labour market is increasing. Do you have a bonus system which rewards employees for achieving this incredibly good operating profit this year?
Decentralised decision-making enables Incap’s employees to take personal responsibility and gives them room to thrive. This attracts and motivates highly professional personnel, improves the work satisfaction and reduces personnel turnover. Traditionally we have high employee satisfaction and small employee turnover. For more information about our social, environmental and economic responsibility related KPI’s, please see our first CR report published earlier this year at https://incapcorp.com/wp-content/uploads/2021/04/Incap-CR-Report-2020_.pdf
Incentive models vary a bit depending on the country. In principle, employees have the same KPIs as the company management.
2. Could you elaborate on the product mix for Incap? Roughly, how much of your revenue stems from sustainable energy solutions, medical equipment, 5G and electric vehicles? Is this a significant part?
We do not report revenue by sector, but all of the above mentioned sectors play an important role in driving the demand for Incap´s electronics manufacturing services.
3. How much will the production capacity (in % of total capacity) increase with the new 3rd plant in India? According to my (probably wrong) calculations you had ~33k sqm in 2021 Q3, and hence the capacity will increase by 26%, since the new factory will be 8,5k sqm.
The logics of the math is on a right track 😉 Incap is indeed currently expanding its existing two factories in India to respond to the demand from existing and new customers. The current expansion is estimated to be completed in the fourth quarter of 2021. After the ongoing expansion has been completed, the total area of the factory will be close to 16,000 sqm. The planned third factory will add another 8,500 sqm to Incap’s production capacity.
4. Do you believe that Incap will be able to grow in the coming year, despite the extremely strong 2021? Will your factory capacity allow this with regard to your recent hypergrowth?
We do not foresee that capacity would constrain our operations, and in the past we have demonstrated capabilities of expanding the operations in order to respond to growing demand.
5. Regarding the margin. I get the feeling that 16.9% is on the higher end of Incap’s margin spectrum, since you had a favourable product mix during the quarter. What’s your thought on the underlying drivers for Incap in the longer term? Are there any factors working in favour or against you?
We have not published long term growth or profitability targets. We believe one of our strengths is the scalable operational model which enables organic growth and acquisitions while maintaining good profitability.
6. According to my calculations, AWS comes from 3 years of ~3-4% EBIT margin. How has AWS performed since integrating with Incap?
AWS has in principle performed according to expectations and we continue our work to materialise all possible synergies.
7. Do you feel that you have more visibility in the order book going forward as compared to one year ago? What pros and cons does this mean for Incap? In my view, this significantly reduces an earlier uncertainty/risk with contract manufacturers.
Current market situation related to pandemic and material situation has forced companies to look longer ahead, and that has an impact also on Incap. We currently have longer orderbook and visibility for delivery times.
8. And the last one. How has your customer intake developed during the year? I noticed that the four biggest customers made up 62% of your revenue in H1 2021. Do you believe that the growth will be driven by new customers in the future?
We have a good pipeline consisting of both new customers and established customers. However, growing with new customers naturally takes more time.