Incap lowers its estimate for revenue in 2013 and continues with the action plan aimed at improved profitability

Incap Corporation                                                                                                                                            
Stock Exchange Release      10 April 2013 at 8.30 a.m.                                                                             

INCAP LOWERS ITS ESTIMATE FOR REVENUE IN 2013 AND CONTINUES WITH THE ACTION PLAN AIMED AT IMPROVED PROFITABILITY  

Incap Corporation estimates that the Group’s revenue in 2013 will be lower than in 2012, when it amounted to EUR 64.1 million.  Previously on 19 March 2013 Incap estimated that the Group’s revenue in 2013 will be at the same level or somewhat lower than in 2012. The company retains its previous estimate for profitability and estimates that the full-year operating result (EBIT) will be clearly positive. The operating result in 2012 was negative EUR -0.7 million.

The decrease in revenue is caused by the fact that the purchase of a part of the materials needed in production has temporarily been transferred over to some customers. This way the deliveries to customers are secured, while the company’s challenging financial situation has weakened the availability of materials. The transfer of responsibility for material purchase is a temporary action.

Action plan for improved profitability
One of the most important objectives of the company in 2013 is the improvement of profitability. The actions taken during 2011 have already resulted in a profitability improvement of approx. EUR 1 million in 2012. By enhanced material sourcing, closing down the Helsinki factory and centralising corporate functions to Estonia the company estimates to gain further savings of approx. EUR 2.3 million in 2013.

Furthermore, the company has launched in the beginning of 2013 an action plan, which shall improve the operating result (EBIT) of the year 2013 by a total of approx. EUR 1.8 million.
The respective actions are focused on the operations in Finland and in Estonia. There have been substantial actions for increased operational efficiency in the subsidiary in India already during 2012, which have for their part contributed to the positive development of the performance of the subsidiary.   

In order to decrease the overhead expenses the organisation structure of the Group will be streamlined. The corporate functions in Finland have been decreased to a half compared with the previous situation. Some tasks will be transferred from Finland to Estonia and India, and functions are centralised to the factories. These actions will result in improved efficiency among others in finance, sourcing and IT. 

The production will be made more efficient and adjusted both in Estonia and in Finland. The number of personnel in production has been reduced. Working hours in Kuressaare have been cut down and all the personnel in the factory will work only on four days a week during April and May. A new production control model has been introduced in the Vaasa factory, and also the rewarding system in the factory is about to be renewed. Actions for improved turn of inventories and decreased material prices will be continued.

INCAP CORPORATION

Sami Mykkänen
President and CEO

For additional information, please contact:
Sami Mykkänen, President and CEO, tel. +358 40 559 9047 or +372 5553 7905
Kirsti Parvi, CFO, tel. +358 50 517 4569
Hannele Pöllä, Director, Communications and Investor Relations, tel. +358 40 504 8296

DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.incap.fi

INCAP IN BRIEF
Incap Corporation is an internationally operating contract manufacturer whose comprehensive services cover the entire life-cycle of electromechanical products from design and manufacture to repair and maintenance services. Incap’s customers include leading equipment suppliers in energy efficiency and well-being technologies, for which the company produces competitiveness as a strategic partner. Incap has operations in Finland, Estonia, India and China. The Group’s revenue in 2012 amounted to approximately EUR 64.1 million, and the company currently employs approximately 610 people. Incap’s share is listed on the NASDAQ OMX Helsinki Ltd. Additional information: www.incap.fi.