Incap Enjoys 65% Revenue Growth in 2015

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Incap Group’s revenue in 2015 increased by 65% and the operating profit was more than tripled on previous year. Financing position improved thanks to revenue growth, good profitability and rights issue.

Key figures in January-December 2015

• The Group’s revenue in 2015 amounted to EUR 30.6 million, up 65% year-on-year (2014: EUR 18.5 million).
• The Group’s full-year operating profit (EBIT) amounted to EUR 3.7 million, increasing by 248% year-on-year (EUR 1.1 million).
• Net profit for the financial period amounted to EUR 2.0 million, which is ten times higher than the year before (EUR 0.2 million).
• The Board of Directors will propose to the Annual General Meeting that no dividend be paid.
• The company estimates that the Group’s revenue in 2016 will be somewhat higher than in 2015 and that the operating profit (EBIT) will be approximately on the same level than in 2015.

Key figures in July-December 2015

• The revenue during the second half of the year amounted to EUR 17.3 million, showing an increase of 67% compared with the corresponding period last year (7-12/2014: EUR 10.3 million) and up 31% compared with the first half of the year (1-6/2015: EUR 13.3 million).
• Operating profit (EBIT) for the second half of the year was EUR 2.2 million, i.e. almost double when compared with the corresponding period last year (7-12/2014: EUR 1.2 million). As expected, the operating profit was clearly better than on the first half of the year when it stood at EUR 1.5 million.

Ville Vuori, President and CEO of Incap Group:

“Year 2015 has been a defining year for Incap. We started the year with a new market promise, which enabled a whole new positioning in the market as an EMS company with strong emphasis on customer service. The implementation of the new orientation required everyone in the organization to perform up to their full potential.  Today, I am extremely proud to say that we succeeded beyond all expectations.

Our revenue grew by 65% and the profitability in terms of EBIT improved even more, by 248% from previous year’s EUR 1.1 million to 3.7 million. Our professional, committed and agile team is to be praised for this. They have been driving our customers’ confidence to grant us new projects and strengthened the gravity to attract new customers from a highly competitive marketplace.

We had an ambitious list of operational development projects for 2015, which together with the relatively strong organic growth were occasionally challenging. All of the projects were completed during 2015. Both factories now operate within the same ERP system, which is facilitating the future search of synergies between the units. Productivity of the factories continued improving and the corporate functions have been developed as lean as it gets.

All operational Key Performance Indicators either improved or stayed on the same level as in 2014. Improved profitability together with the rights issue in June improved the financial indicators significantly. At year end our equity ratio was 31% compared to 10% the year before, and the net gearing was 98% compared to 524% at the end of previous year. Proportional share of Net Working Capital required for running the business developed well and decreased by 17%.

Extremely price-sensitive marketplace and continuing dim outlook in the global economy possess a risk for the erosion of our operating profit. We need to remember the lessons learned from the past years and continue focusing on costs in all levels. We will continue our commitment and challenge ourselves to be more lean, effective and agile for the benefit of our customers. I trust that by developing the company further with the same orientation as last year the future outlook will be positive. According to our estimates the revenue level of 2015 can be exceeded in 2016.”

Business environment in 2015

The business environment of Incap Group continued challenging, because the competition in the global market for manufacturing services was fierce. Financial prospects in Europe and Asia were still unstable. General cost level remained stable in countries where Incap has operations. Prices of components and raw materials showed a moderate trend.

Incap Group’s revenue and earnings in July-December 2015

Revenue for the second half of the year amounted to EUR 17.3 million, showing an increase of 67% year-on-year (7-12/2014: EUR 10.3 million) and being 31% higher than in the first half of the year (1-6/2015: EUR 13.3 million). The revenue increased from previous year both in Estonia and in India. In Estonia the major growth of revenue came from new customers, to whom the production was launched during the latter half of the year. The volumes in the Indian factory were increased especially due to the growing production for established customers.

The operating profit (EBIT) for the second half of the year amounted to EUR 2.2 million, i.e. almost double the figure in the corresponding period in 2014 (7-12/2014: EUR 1.2 million) and remarkably higher than for the first half of the year (1-6/2015: EUR 1.5 million). The net result for the second half of the year was EUR 1.2 million, compared with EUR 0.8 million on the corresponding period last year and EUR 0.8 million in the first half of the year 2015.

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