Incap Group business review for

Incap Corporation Stock exchange release 27 October 2022 at 9:30 am EEST
Business review

Incap Group business review for January–September 2022 (unaudited): Strong performance continues in third quarter

This release is a summary of Incap’s business review for January–September 2022. The full report is attached to this release as a pdf file and is available on the company’s website at www.incapcorp.com.

July–September 2022 highlights

• Revenue grew 50.0% and amounted to EUR 70.6 million (7–9/2021: EUR 47.0 million).
• Adjusted operating profit (EBIT) increased by 41.7%, amounting to EUR 11.2 million (EUR 7.9 million) or 15.9% of revenue (16.9%).
• Acquisition related purchase price allocation (PPA) amortization amounted to EUR 0.1 million (EUR 0.1 million) and the non-recurring cost was EUR 0.2 million (EUR 0.0 million).
• Operating profit (EBIT) increased by 40.2%, amounting to EUR 10.9 million (EUR 7.8 million) or 15.5% of revenue (16.6%).
• The net profit for the period was EUR 7.7 million (EUR 6.4 million).
• In October 2022, Incap specified the outlook and now estimates that revenue in 2022 will be EUR 262–270 million and operating profit (EBIT) EUR 38–42 million.

Highlights of January–September 2022

• Revenue increased by 56.4% and amounted to EUR 185.1 million (1–9/2021: EUR 118.3 million).
• Adjusted operating profit (EBIT) increased by 49.2%, amounting to EUR 27.1 million (EUR 18.1 million) or 14.6% of revenue (15.3%).
• Acquisition related purchase price allocation (PPA) amortization amounted to EUR 0.3 million (EUR 0.4 million) and non-recurring costs were EUR 0.4 million (EUR 0.2 million).
• Operating profit (EBIT) increased by 49.7%, amounting to EUR 26.3 million (EUR 17.6 million) or 14.2% of revenue (14.8%).
• The net profit for the period was EUR 18.9 million (EUR 14.1 million).
• Earnings per share were EUR 0.65 (EUR 0.48).

Unless otherwise stated, comparative figures refer to the corresponding period in 2021. This business review has not been audited.

Prime numbers

*Adjusted operating profit (EBIT) is an alternative measure of performance. Adjusted EBIT excludes non-recurring items and amortization of the purchase price allocation. Adjusted EBIT provides comparable information between different fiscal years of operating income.

Outlook for 2022

Incap estimates that its revenue, operating profit (EBIT) and adjusted operating profit (EBIT) for 2022 will be higher than in 2021. Revenue is estimated at EUR 262–270 million, and operating profit (EBIT) is estimated at EUR 38–42 million.

Estimates are provided if unforeseen events affecting Incap’s business environment do not occur, for example, the availability of components.

Otto Pukk, President and CEO of Incap Corporation:

“I would like to start by thanking our entire Incap team around the world. Once again, we achieved an all-time high result and our fantastic people made it happen and delivered.

We continue to see growing demand for many features from existing and new customers. This contributed to our third quarter revenue growth of EUR 70.6 million. In particular, we see growth in industrial electronics, green energy and green mobility. Our efficient and cost-effective decentralized operating model has increased our revenue to the highest level we have seen in Incap’s history.

The material availability situation is still difficult, and our sourcing teams are working closely with our customers to find different solutions and alternatives to ensure deliveries. That being said, we are now starting to see the market situation slowly improving, giving confidence for the coming year.

There are many disturbances in the market due to the pandemic, the ongoing war in Europe and the tensions in trade relations between the USA and China. Many markets are now in recession, and inflation is rising and putting pressure on wages. We have seen an increase in the price of energy and raw materials in all units. Any significant changes to our cost structure are in our agreements passed on to our customers. I want to emphasize that this applies to increases and decreases.

Our engineers work hard every day to find ways to optimize our production and make it more efficient and cost-effective, and to find better and cheaper components and materials . We remain committed to delivering our services to the highest standard and work closely with our customers to create the best value for them as long-term partners.

Throughout the year, we continued to invest in our factories in Europe and India. In our European units we continue to invest in capabilities and production capacity, and we are beginning to see the positive effects of these investments. The third factory project in India is scheduled to be completed by the end of the year, and we currently estimate that it will be ready as planned despite the recent challenging weather conditions in the region.

Our financial position remains strong, and we are well positioned to actively pursue growth through M&A in addition to our continued organic growth. We concentrate on companies with strong cultural fit and good profitability. We are looking for opportunities for geographical expansion in markets with a well-functioning operating environment such as, but not limited to, Germany and the USA.

On 17 November, we will organize our first Capital Markets Day in Helsinki, Finland. The event will be held in conjunction with the Slush event, and we welcome our investors to join us live or participate in the webcast. For more information, please follow our releases and webpage.

Overall, times are challenging and likely to remain ahead. Although we see some things improving, other challenges are increasing. However, the long-term outlook for our industry remains positive and we see electronic growth continuing. I am confident in our team and our business model, and I am sure that we will continue to deliver our excellent service to our customers in the future as well. “

Financial reporting in 2023

Incap will publish the financial reporting schedule for 2023 in December 2022.

Webcast

Incap will hold a webcast on Thursday, 27 October 2022 at 10:15 am EEST. The results will be presented by Otto Pukk, CEO, and Antti Pynnönen, CFO, Incap Corporation. In addition, Greg Grace, Director, Operations Estonia, will present Incap’s operations in Estonia.

The live webcast can be followed by https://incap.videosync.fi/q3-2022-results. During the webcast, the public can ask questions in the chat room at the address mentioned above. The broadcast recording will be available on the company’s website at https://incapcorp.com/reports-and-presentations/ later that day.

The event is aimed at analysts, portfolio managers and media. Welcome!

In Helsinki, 27 October 2022

INCAP CORPORATION
Board of Directors

For more information, please contact:
Otto Pukk, President and CEO, tel. +372 508 0798

Distribution:
Nasdaq Helsinki Ltd.
Mainstream media
www.incapcorp.com

INCAP IN BRIEF
Incap Corporation is a trusted partner and full service provider of Electronics Manufacturing Services. As a global EMS company Incap supports customers from large multinationals and mid-sized companies to small start-ups throughout their complete manufacturing value chain. Incap offers state-of-the-art technology backed by an entrepreneurial culture and highly qualified personnel. The company has operations in Finland, Estonia, India, Slovakia, the UK and Hong Kong and employs approximately 2,500 people. Incap’s shares have been listed on the Nasdaq Helsinki Ltd stock exchange since 1997.

UNITY
Incap business review January-September 2022

• Incap business review January-September 2022