Incap Reports 26% Revenue Growth in 2017

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Incap Group has reported a revenue of €48.5 million for January-December 2017, up by 26% year-on-year. The Group's operating profit amounted to €4.5 million and its share out of revenue was 9.3%. Net profit for the financial period amounted to €3.1 million, up by 47% higher than the previous year.

During the second half of the year (July-December 2017), revenue amounted to €24.8 million, showing an increase of 19% compared with the corresponding period in the previous year, and up by 4% compared with the first half of the year. Operating profit was €2.3 million, 45% higher than in the corresponding period in the previous year and somewhat higher than in the first half of the year.

"Our profitable growth continued in 2017. The Group’s revenue grew by 26% and the operating profit in terms of EBIT by 20%. The EBIT margin amounted to 9.3% indicating that we continue being among the best companies in our peer group. Our professional team has performed successfully, and the customer satisfaction and loyalty have stayed at an excellent level. Thanks to our cost-efficient operations our financial position has improved further," commented Vesa Mäkelä, President and CEO of Incap Group. "Good planning is the best guarantee for success. The factory extension in India and the modernisation of manufacturing machinery both in India and in Estonia were completed just on time. Getting new products into production can be successful only if we can show the customer that we have sufficient capacity and technical competence. We are able to grow the revenue further without any significant new investments in factory premises.

"Our geographical position is strategically excellent. We have low-cost manufacturing bases in Asia and Europe and both factories are delivering world-class quality. The campaign 'Make in India' launched by the Indian government can be seen in real life in our Indian factory, where we ship goods to all over the world, from Australia to America. The manufacturing of electronics products is cost-driven and the production locations will give us a competitive advantage also in future.

"Also our strategic choice of customer segment has proved to be rewarding. We continue focusing on industrial electronics and will consider eventual cooperation opportunities in other segments like automotive industry and consumer goods case-by-case. Our present strategy fits best with our technology and competence, and it has proved to be successful also in the new customer acquisition.

"The contract manufacturing enjoys the good upturn in the market along with other industries. The biggest challenge at the moment is to keep up profitability levels. Along with the increased demand the component prices are increasing and the lead times are getting longer, and therefore, the materials management and the control of inventory values require special attention.

"Our target is to continue with the organic growth while at the same time keeping our profitability among the best companies in our business. Our efficient operational model and strong financial position enable us to grow our business also through M&A."

There were no significant changes in the business environment of Incap Group. The customers are very price-conscious and expect that their manufacturing partners increase efficiency continuously and stay competitive. General cost level remained stable in countries where Incap has operations. Prices of components and raw materials showed a moderate trend of increase.

The profitability of Incap Group was good. The full-year operating profit (EBIT) amounted to €4.5 million, being 9.3% out of revenue (9.8%). In the company’s business, Electronics Manufacturing Services, this is generally considered to be a high level.

The overhead costs remained low ensuring profitable operations and continued competitiveness.

Personnel expenses in the reporting period increased in line with the growing volumes and amounted to €4.1 million. Other business costs amounted to €3.3 million. As a result of the growing business volume the material costs increased from €28.5 million to €36.9 million. The value of inventories increased based on the business growth from €5.7 million to €7.7 at the end of the reporting period. 

Net financial expenses amounted to €0.5 million. Depreciation amounted to a total of €0.4 million.

Profit for the period was €3.1 million. Earnings per share were €0.71.