Incap is focusing on core business and implementing a turnaround program

Incap Corporation                                
Stock Exchange Release    15 October 2013 at 8.00 a.m. (EET)                                                                                 

INCAP IS FOCUSING ON CORE BUSINESS AND IMPLEMENTING A TURNAROUND PROGRAM

Incap Corporation’s Board has decided on actions of the company’s turnaround program. The overall strategy in the program is to focus on core business, i.e. manufacturing and deliveries to customers. The customer relationships are strengthened by special attention to the improvement of delivery accuracy in terms of On-Time-Delivery and to the enhancement of efficiency both in production and supporting functions.

In the first stage, the target is to restore the profitability of operations and to reach total annual savings of approximately EUR 2.9 million in overhead costs and of approximately EUR 1.8 million in factory costs. The respective actions are estimated to cause one-time costs of approximately EUR 1.6 million, and accordingly, the total net savings will be approximately EUR 3.1 million. The actions have already been started and their results are scheduled to be seen within a varying time span during 2013 and 2014. The impact of the actions will be evaluated by the end of January 2014. In case the targeted savings have not become evident in desired speed and intensity, the second stage of the program will be launched.

Incap continues to focus on the customer segments Energy efficiency and Well-being technologies. Efforts to build up in-house design services to a strategic competitive edge are replaced with the development of design services in cooperation with partnering R&D companies.

The factories shall operate as self-sufficient profit centres while the corporate functions’ role is minimized. Supporting and coordinating duties are streamlined and as a part of this, cooperative negotiations in the Group services in Finland are on-going.

The production capacity and organisation are adopted according to demand, especially in the Kuressaare factory. Actions to increase the efficiency and productivity are implemented in all factories.

The need for office locations is reconsidered. The office in Bangalore will move to smaller premises by the end of the year. To reduce the costs, the company has initiated negotiations on the rental contracts both in Tallinn and in Kuressaare.

Fredrik Berghel, President and CEO of Incap Group: “The past months have been challenging besides to Incap itself also to our customers and other stakeholders. The situation is somewhat better today after the financing arrangement, and we will continue our efforts to regain the trust in the market and to ensure the turn to profitability. Many measures have already been taken to cut the immediate costs and restore the profitability. Our special focus is the customer relationships and the deliveries according to promise, which are the cornerstones when ensuring the business both in short and long term.”

INCAP CORPORATION

Fredrik Berghel
President and CEO

Additional information:
Fredrik Berghel, tel. +46 73 202 2210
Hannele Pöllä, Director, Communications and IR, 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 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 EUR 64.1 million, and the company currently employs approximately 600 people. Incap’s share is listed on the NASDAQ OMX Helsinki. Additional information: www.incap.fi.