2009-05-06 07:30:00 CEST
2009-05-06 07:31:26 CEST
REGULATED INFORMATION
Incap - Interim report (Q1 and Q3)
INCAP GROUP INTERIM REPORT JANUARY-MARCH 2009: REVENUE DECREASED, RESULT IMPROVED
Incap Corporation Stock Exchange Release 6 May 2009, 8:30
a.m.
* The change of business structure proceeded in accordance with the
company's strategy
* Revenue during the first quarter decreased by about 9% on the
corresponding period the previous year, and stood at EUR 18.5
million (Q1 2008: EUR 20.3 million)
* The revenue increased in selected focus areas in energy
efficiency and well-being technologies while the deliveries of
telecommunications products decreased
* Operating profit (EBIT) improved on the corresponding period the
previous year and stood at EUR 0.5 million negative (EUR 1.3
million negative)
* Profitability improved through cost savings in line with the
reorganisation programme
* The net loss for the report period was EUR 0.9 million (net loss
of EUR 1.7 million)
* Funding of EUR 1.9 million was received from Finnfund to finance
the Indian operations
This unaudited interim financial report has been drawn up in
accordance with international standards on financial statements
(IFRS). The Group has taken into consideration the following new
standards:
IAS 1 Presentation of Financial Statements. The change applies mainly
to the presentation of Income Statement and Changes in Equity.
IFRS 8 Operating segments. The new standard replaces the IAS 14
Segment Reporting Standard. According to IFRS 8, the reporting is
based on the management's internal reporting.
The Group has no segments to report.
Unless stated otherwise, the comparison figures refer to the
corresponding period last year.
Sami Mykkänen, the President and CEO of Incap Group: "Our operations
developed in the right direction during the first quarter. We
achieved cost savings in many areas and achieved our objective in the
reduction of inventories, among others.
Once the new organisational model has become established, business
units will intensively seek opportunities for deepening cooperation
with our present customers. Efforts to win new customers will be
intensified in the manufacture and design of devices in energy
efficiency and well-being technologies, i.e. the growth areas in
accordance with our strategy.
Our most important objective in 2009 is to improve profitability. We
will continue to adjust the level of production capacity, boost the
efficiency of materials management and reduce fixed costs. We will
ensure our competitiveness by increasing the efficiency of our
operations and by developing our services."
Revenue and net profit during January-March 2009
Revenue during the first quarter was EUR 18.5 million (Q1 2008: EUR
20.3 million), which was 9% less than during the corresponding period
in 2008. Revenue increased from the previous year in the strategic
focus areas in energy efficiency and well-being technologies. Sales
of materials accounted for EUR 1.3 million of total revenue.
Operating loss fell half its previous level and the operating result
amounted to EUR -0.5 million (EUR -1.3 million). As a percentage of
revenue, operating profit was -2.8% (-6.5%). Costs were reduced
through efficiency-improvement measures in accordance with the
reorganisation programme. Personnel expenses decreased compared both
with the corresponding period last year and the last quarter of 2008.
Net loss for the report period was EUR 0.9 million (EUR 1.7 million).
Earnings per share were EUR -0.08 (EUR -0.14), while equity per share
stood at EUR 1.01 (EUR 1.41).
Quarterly Q1/ Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
comparison 2009 2008 2008 2008 2008 2007 2007 2007 2007
(EUR
thousands)
Revenue 18,479 25,789 21,395 26,412 20,330 26,304 20,593 19,130 16,982
Operating -518 -1,241 -442 -600 -1,329 2,025 -578 44 -1,188
profit/loss
Net -949 -1,915 -800 -1,005 -1,681 1,450 -1,071 -139 -1,342
profit/loss
Earnings
per share, -0.08 -0.16 -0.07 -0.08 -0.14 0.12 -0.09 -0.01 ,-0.11
EUR
Development of operations
Most of the revenue accrued from manufacturing services related to
energy efficiency technology and well-being technology products. The
last deliveries of high-volume products in telecommunications
technology took place in March, when cooperation with a big customer
came to an end as planned.
In the Indian unit, a large number of prototypes for new customers'
products were in production and the quotation base was more than
doubled from the year end. Construction of the new manufacturing
facilities of the Indian factory proceeded and at the end of the
report period, installation started on a SMD assembly machine line
transferred from the company's factory in Vuokatti, Finland, and on
other manufacturing equipment. The new facilities and up-to-date
capacity will boost competitiveness and improve our opportunities to
start the manufacturing of new products. Due to the rapid increase in
the demand for design services, the respective resources in India
have been increased.
Inventories fell from EUR 16.2 million at the turn of the year to EUR
14.7 million in line with the objectives. The decrease was due to the
reduction in the inventory of telecommunications components and more
efficient materials management. Our objective is to reduce
inventories further by improving the effectiveness of materials
management, procurement and forecast practices.
The roles of various factories will be separated as much as possible
to achieve the largest possible efficiency.
Financing and cash flow
The Group's equity ratio was 27.4% (33.3%). Interest-bearing net
liabilities totalled EUR 18.6 million (EUR 18.3 million) and the
gearing ratio was 151.1% (106.5%). Net financial expenses were EUR
0.43 million (EUR 0.35 million) and depreciation and amortisation
expense was EUR 0.7 million (EUR 0.8 million). We will endeavour to
improve liquidity first and foremost by improving the management of
working capital. Trade receivables decreased from the turn of the
year and there were no credit losses during the report period.
The Group's equity at the close of the report period was EUR 12.3
million (EUR 17.2 million). Debt totalled EUR 32.6 million (EUR 34.5
million), of which interest-bearing debt amounted to EUR 19.9 million
(EUR 18.9 million).
The Group's quick ratio was 0.6 (0.6) and the current ratio was 1.3
(1.4). Cash flow from operations was EUR 0.8 million (EUR 1.8
million) and the change in cash and cash equivalents was an increase
of EUR 0.8 million (a decrease of EUR 0.3 million).
In order to finance investments and working capital in India, Incap
accepted in January the funding of EUR 1.9 million from Finnfund
(Finnish Fund for Industrial Cooperation Ltd.). For the Indian
subsidiary, the investment comprises equity financing. Due to the
terms and conditions of the loan, the investment is regarded as a
long-term loan in the Group's IFRS financial statement.
Capital expenditures
The Group's capital expenditures during the report period amounted to
EUR 0.1 million (EUR 0.7 million).
Personnel
At the end of March 2009, Incap Group had 713 employees (727 at the
start of the year). The average number of employees was 728. At the
end of the report period, 41 persons were temporarily laid off.
Operations were adjusted to the reduced demand by agreeing on
reductions in working time and the exchange of holiday bonus for time
off. These measures will mostly take place during the second quarter
of the year.
Decisions of the Annual General Meeting
Incap Corporation's Annual General Meeting was held in Helsinki on 3
April 2009. The AGM approved the Group's 2008 financial statements
and discharged from liability the persons responsible for accounts.
No dividend was paid for 2008.
The AGM authorised the Board of Directors to decide within one year
of the AGM on the increase of share capital through one or more
rights issues so that the maximum number of total shares issued under
the authorisation is 1,200,000.
The AGM re-elected Kalevi Laurila, Susanna Miekk-oja, Jukka Harju and
Kari Häyrinen as members of the Board of Directors. Lassi Noponen was
elected to the Board of Directors as a new member. The Board of
Directors elected from among its members Kalevi Laurila as Chairman
and Susanna Miekk-oja as Deputy Chairman.
Ernst & Young Oy was selected again as the company's auditor.
Shares and shareholders
Incap Corporation has one series of shares and the number of shares
in 12,180,880. During the report period, the share price fluctuated
between EUR 0.43 and EUR 0.68 and the last closing price of the
period was EUR 0.47. During the report period, the trading volume was
3.2% of outstanding shares.
At the end of the report period, the company had 1,018 shareholders.
Foreign or nominee-registered owners held 3.1% of all shares. The
company's market capitalisation on 31 March 2009 was EUR 5.7 million.
The company does not own any of its own shares.
The industry classification of Incap's shares changed in February
2009 due to a reform in the revenue structure. The share's new code
is Industrial Products and Services and the industry code is 20104010
(Electrical Components and Equipment).
Share-based incentive programmes
Incap Corporation's Board of Directors launched an option programme
in February 2009 which includes a total of 600,000 option rights
entitling to subscribe 600,000 shares of Incap Corporation. The CEO
was awarded 100,000 options in February. In addition, he will be
awarded a maximum of 100,000 options in 2010 if the objectives set by
the Board of Directors for the company's operating profit and return
on working capital are achieved in 2009. A maximum of 400,000 options
will be awarded to the company's key personnel in two issues if the
objectives set by the Board of Directors for the company's operating
profit and return on working capital are achieved in 2009 and 2010
and each of the key personnel meet their own individual objectives.
Short-term risks and factors of uncertainty concerning operations
The risks and factors of uncertainty relating to Incap's operations
are described in more detail in the report by the Board of Directors
dated 24 February 2009, and no material changes have taken place with
regard to these factors during the report period.
The most significant short-term risks are connected to the volume and
profitability of business as well as to the financing arrangements.
Incap's sales are spread over several customer sectors, which hedges
the company against sharp seasonal changes. The outlook to the market
is however very short.
In contract manufacturing, the management of material and personnel
costs have a remarkable impact on the competitive edge. Incap aims at
managing this risk by continuously monitoring the operational
efficiency and cost levels.
The general development in the financial market and the future
profitability trend affect the company's financing position. Incap
aims at securing its liquidity through efficient management of
working capital, and different financing options will be assessed for
lowering the financing costs.
Outlook
Incap's estimates of future business development are based on its
customers' forecasts and the company's own evaluations. The general
economic uncertainty has been reflected in Incap's operations so that
some customers have downgraded their forecasts, but there have been
no actual cancellations of orders.
Incap maintains its earlier estimate of the company's development in
2009 and forecasts that the Group's revenue in 2009 will be lower
than in 2008 when it was EUR 93.9 million. Full-year operating profit
(EBIT) is estimated to improve clearly from 2008 (EUR -3.6 million).
INCAP CORPORATION
Board of Directors
For additional information, please contact:
Sami Mykkänen, President and CEO, tel. +358 40 559 9047
Eeva Vaajoensuu, Chief Financial Officer, tel. +358 40 763 6570
Hannele Pöllä, Director of Communications and Human Resources, tel.
+358 40 504 8296
DISTRIBUTION
NASDAQ OMX Helsinki Oy
Principal media
The company's website at www.incap.fi
PRESS CONFERENCE
Incap will hold a conference for the press and financial analysts at
10:00 a.m. on 6 May 2009 at the World Trade Center Helsinki, in
Meeting Room 1 on the 2nd floor at Aleksanterinkatu 17, 00100
Helsinki. The presentation material of the press conference will be
available on the company's website on the same day.
ANNEXES
1 Consolidated Income Statement
2 Consolidated Balance Sheet
3 Consolidated Cash Flow Statement
4 Consolidated Statement of Changes in Equity
5 Group Key Figures and Contingent Liabilities
6 Quarterly Key Figures
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 technology, for which
the company produces new competitiveness as a strategic partner.
Incap has operations in Finland, Estonia and India. The Group's
revenue in 2008 amounted to around EUR 94 million, and the company
currently employs approximately 710 persons. Incap's shares are
listed on the NASDAQ OMX Helsinki Oy. For additional information,
please contact: www.incap.fi.
Annex 1
CONSOLIDATED INCOME STATEMENT
(IFRS)
(EUR thousands, unaudited) Q1/2009 Q1/2008 Change % FY/2008
REVENUE 18,479 20,330 -9 93,925
Work performed by the enterprise and
capitalised 0 0
Change in inventories of finished
goods and
work in progress -26 882 -103 791
Other operating income 55 6 862 53
Raw materials and consumables used 12,506 14,847 -16 66,672
Personnel expenses 3,831 4,485 -15 18,722
Depreciation and amortisation
expense 700 759 -8 2,823
Other operating expenses 1,988 2,456 -19 10,165
OPERATING PROFIT/LOSS -518 -1,329 -61 -3,612
Financing income and expenses -429 -352 22 -1,810
PROFIT/LOSS BEFORE TAX -947 -1,681 -44 -5,422
Income tax expense -2 0 21
PROFIT/LOSS FOR THE PERIOD -949 -1,681 -44 -5,401
Earnings per share -0.08 -0.14 -43 -0.44
Options have no dilutive effect
during the 2008 and 2009 periods
OTHER COMPREHENSIVE INCOME Q1/2009 Q1/2008 Change % FY/2008
PROFIT/LOSS FOR THE PERIOD -949 -1,681 -43 -5,401
OTHER COMPREHENSIVE INCOME:
Translation differences from
foreign units 35 -149 -124 -262
Other comprehensive income
net 35 -149 -124 -262
TOTAL COMPREHENSIVE INCOME -914 -1,830 -50 -5,663
Total comprehensive income
attributable to:
Equity holders of the parent
company -914 -1,830 -50 -5,663
Minority interest 0 0 0
Annex 2
CONSOLIDATED BALANCE SHEET
(IFRS)
31
31 March 31 March December
(EUR thousands, unaudited) 2009 2008 Change % 2008
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 10,759 12,670 -15 11,250
Goodwill 974 1,271 -23 969
Other intangible assets 1,253 1,466 -15 1,311
Other financial assets 15 21 -26 16
Deferred tax assets 4,153 4,183 -1 4,148
TOTAL NON-CURRENT ASSETS 17,155 19,611 -13 17,693
CURRENT ASSETS
Inventories 14,740 17,425 -15 16,153
Trade and other receivables 11,585 13,993 -17 14,444
Cash and cash equivalents 1,388 630 120 641
TOTAL CURRENT ASSETS 27,713 32,048 -14 31,239
TOTAL ASSETS 44,868 51,659 -13 48,932
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
CAPITAL
Share capital 20,487 20,487 0 20,487
Share premium account 44 44 0 44
Exchange differences -442 -365 21 -478
Retained earnings -7,806 -2,985 162 -6,864
TOTAL EQUITY 12,283 17,181 -29 13,190
NON-CURRENT LIABILITIES
Deferred tax liabilities 99 121 -18 99
Interest-bearing loans and debt 11,649 10,904 7 12,977
NON-CURRENT LIABILITIES 11,748 11,025 7 13,077
CURRENT LIABILITIES
Trade and other payables 12,544 15,436 -19 15,731
Current interest-bearing loans
and debt 8,293 8,017 3 6,935
CURRENT LIABILITIES 20,837 23,453 -15 22,666
TOTAL EQUITY AND LIABILITIES 44,868 51,659 -13 48,932
Annex 3
CONSOLIDATED CASH FLOW STATEMENT Q1/2009 Q1/2008 FY/2008
(EUR thousands, unaudited)
Cash flow from operating activities
Net income -518 -1,329 -3,612
Adjustments to operating profit 713 643 2,760
Change in working capital 1,034 2,733 3,702
Interest paid -409 -287 -1,640
Interest received 11 79 143
Cash flow from operating activities 832 1,839 1,353
Cash flow from investing activities
Capital expenditure on tangible and
intangible assets -296 -696 -1,699
Proceeds from sale of tangible
and intangible assets 120 160
Acquisition of subsidiary 0
Shares of subsidiaries sold 0 50
Refunds of loans receivable 1 1
Cash flow from investing activities -175 -696 -1,488
Cash flow from financing activities
Drawdown of loans 1,940 1,753
Repayments of loans -1,558 -1,115 -838
Repayments of obligations under finance
leases -252 -313 -1,063
Cash flow from financing activities 130 -1,428 -148
Change in cash and cash equivalents 787 -285 -283
Cash and cash equivalents at beginning of
period 641 944 944
Effect of changes in exchange rates -41 -29 -20
Cash and cash equivalents at end of period 1,388 630 641
Annex 4
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (IFRS)
(EUR thousands, unaudited)
Retained
Share
Share premium Exchange
capital account differences earnings Total
Equity on 1 January 2008 20,487 44 -216 -1,188 19,127
Change in exchange
differences -149 -149
Options and share-based
compensation -116 -116
Net income and losses
recognised
directly in equity -149 -116 -265
Net profit/loss -1,681 -1,681
Total income and losses -149 -1,797 -1,946
Equity on 31 March 2008 20,487 44 -365 -2,985 17,181
Equity on 1 January 2009 20,487 44 -478 -6,864 13,189
Change in exchange
differences 35 35
Options and share-based
compensation 7 7
Net income and losses
recognised
directly in equity 35 7 42
Profit for the period -949 -949
Total income and losses 35 -943 -907
Equity on 31 March 2009 20,487 44 -442 -7,806 12,283
Annex 5
31
GROUP KEY FIGURES AND CONTINGENT 31 March 31 March December
LIABILITIES (IFRS) 2009 2008 2008
Revenue, EUR millions 18.5 20.3 93.9
Operating profit, EUR millions -0.5 -1.3 -3.6
% of revenue -2.8 -6.5 -3.9
Profit before taxes, EUR millions -0.9 -1.7 -5.4
% of revenue -5.1 -8.3 -5.8
Return on investment (ROI), % -4.9 -13.4 -8.6
Return on equity (ROE), % -29.8 -37.0 -33.4
Equity ratio, % 27.4 33.3 27.0
Gearing, % 151.1 106.5 146.1
Net debt, EUR millions 19.6 19.9 20.7
Net interest-bearing debt, EUR
millions 18.6 18.3 19.3
Average number of shares during the
period
under review, adjusted for share
issues 12,180,880 12,180,880 12,180,880
Earnings per share (EPS), euro -0.08 -0.14 -0.44
Equity per share, euro 1.01 1.41 1.08
Investments, EUR millions 0.1 0.8 1.8
% of revenue 0.6 4.1 1.9
Average number of employees 728 733 735
CONTINGENT LIABILITIES, EUR millions
FOR OWN LIABILITIES
Mortgages 12.0 12.3 12.0
Other liabilities 7.8 7.0 8.8
Nominal value of currency options,
EUR thousands 842.4 0 0
Fair value of currency options, EUR
thousands -0.2 0 0
Annex 6
GROUP QUARTERLY KEY FIGURES
(IFRS)
Q1/ Q4/ Q3/ Q2/ Q1/
2009 2008 2008 2008 2008
Revenue, EUR
millions 18.5 25.8 21.4 26.4 20.3
Operating
profit,
EUR millions -0.5 -1.2 -0.4 -0.6 -1.3
% of revenue -2.8 -4.8 -2.1 -2.3 -6.5
Profit before
taxes,
EUR millions -0.9 -1.9 -0.8 -1.0 -1.7
% of revenue -5.1 -7.5 -3.7 -3.8 -8.3
Return on
investment
(ROI), % -4.9 -11.1 -4.1 -4.9 -13.4
Return on equity
(ROE), % -29.8 -47.4 -18.7 -22.9 -37.0
Equity ratio, % 27.4 27.0 29.43 31.2 33.3
Gearing, % 151.1 146.1 132.6 120.4 106.5
Net debt, EUR
millions 19.6 20.7 21.7 18.0 19.9
Net
interest-bearing
debt,
EUR millions 18.6 19.3 20.1 19.2 18.3
Average number
of share
issue-adjusted
shares
during report
period 12,180,880 12,180,880 12,180,880 12,180,880 12,180,880
Earnings per
share (EPS),
euro -0.08 -0.16 -0.07 -0.08 -0.14
Equity per
share, euro 1.01 1.08 1.24 1.31 1.41
Investments, EUR
millions 0.1 0.3 0.3 0.4 0.8
% of revenue 0.6 1.3 1.2 1.6 4.1
Average number
of
employees 728 743 739 724 733
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