Incap - Interim report (Q1 and Q3)

Incap Group Business Review for January-September 2017: Revenue growth 33%, Operating Profit growth 12%

Incap Corporation
Interim report                       14 November 2017 at 3.15 p.m. (EET)


INCAP GROUP BUSINESS REVIEW FOR JANUARY-SEPTEMBER 2017: REVENUE GROWTH 33%,
OPERATING PROFIT GROWTH 12%

The information in this business review concerns the development of Incap Group
in January-September 2017 and in the corresponding period of 2016, unless
otherwise stated. The figures are unaudited.

Key figures in January-September 2017

  * The Group's revenue amounted to EUR 37.1 million, up 32.8% on the
    corresponding period of previous year (Jan-Sep 2016: EUR 27.9 million).
  * The Group's operating profit (EBIT) amounted to EUR 3.6 million, up 11.5% on
    the corresponding period (EUR 3.3 million).
  * Net profit for the period amounted to EUR 2.6 million, up 26.3% on the
    corresponding period (EUR 2.0 million).
  * The company repeats its previous outlook for full year 2017 provided there
    is no need to write off inventory discrepancy from 2016 and early 2017,
    which is under analysis


                                1-9/   1-9/   7-9/   4-6/   1-3/  1-12/
 (EUR thousand)                 2017   2016   2017   2017   2017   2016




 Revenue                      37,069 27,920 13,290 12,793 10,986 38,626

 Operating profit/loss (EBIT)  3,642  3,265  1,391  1,285    966  4,386

 Profit/loss for the period    2,580  2,043  1,030    886    664  2,742



Key events of the period

Incap Group's revenue for January-September 2017 developed favourably both in
India and in Estonia, growing by 32.8% on the comparison period. Increased
production capacity in India and new customers' ramp-ups in Estonia are the
major reasons for revenue growth. The cost control programs to fight against
increasing component prices are working well.

The operating profit (EBIT) amounted to EUR 3.6 million, increasing by 11.5% on
the comparison period last year. Higher revenue with decreased fixed costs is
resulting in good profit performance. Earnings per share were EUR 0.59. The
operating profit margin stood at 9.8%, which can be considered as an excellent
level for electronics manufacturing services business.

The strengthening of Indian Rupee had an increasing effect on the revenue by
approximately EUR 0.7 million and on the operating profit by EUR 0.07 million on
the corresponding period last year.

The financing position of the company remained good and the equity ratio on 30
September 2017 was 40.4% (30 September 2016: 34.6%).

Outlook for 2017

Incap's estimates for future business development are based both on its
customers' forecasts and on the company's own assessments.

The company has detected a possible discrepancy in inventory valuation from
2016 and early 2017. There might be a need for a write-off of approximately EUR
0.5 million from the inventory from this time period.  In case a write-off is
needed and taken in to the accounts for 2017, the Group's operating profit
(EBIT) for the full year 2017, including this extraordinary cost from the past,
would be somewhat lower than in 2016.

The company continues to estimate that that the Group's revenue in 2017 will be
approximately EUR 45-50 million and that the operating profit (EBIT) in 2017 is
somewhat higher than in 2016, provided that there are no major changes in
exchange rates and without the possible write-off of inventory value.

The Group's revenue in 2016 was EUR 38.6 million and the operating profit (EBIT)
EUR 4.4 million.

Incap will publish its financial statement release for January-December 2017 in
accordance with IAS 34 on Tuesday, 13 February 2018.

Vesa Mäkelä President and CEO of Incap Group:

"Our business has grown throughout the year according to our expectations and
especially the second and third quarter of the year was very good both in terms
of revenue and the operating profit. Equity keeps improving which can be seen in
equity ratio. Inventory and other current assets increased relatively modestly
compared to the increase in revenue. The financing position of the company has
remained good.

Performance in the Indian operations continued strong. This year the business
unit in Tumkur has been a part of the Incap Group since 10 years and it has had
a significant role in the internationalization and development of Incap's
operations. The extension of the factory was taken successfully into use during
the second quarter. The increased capacity is in place just-in-time to support
the organic growth in business.

Operations in the Estonian factory are on the track of profitable growth.
Operational   development continues to focus on overall agility, quality and
Lean processes.

The pressure from customers on the price reduction and the increased costs for
raw-materials at the same time are challenging us also in future. Continuous
improvement and lean operational model are important tools to keep the
operations agile and ensuring that profitability and quality remain at the good
level. The market outlook is good at the moment and our active operations aimed
at realizing organic growth have produced successful growth."

INCAP CORPORATION
Board of Directors


For additional information, please contact:
Vesa Mäkelä, President and CEO, tel. +358 40 835 4495

Distribution:
Nasdaq Helsinki Ltd
Principal media
The company's home page www.incapcorp.com


INCAP IN BRIEF
Incap Corporation is an international contract manufacturer. Incap's customers
are leading suppliers of high-technology equipment in their own business
segments, and Incap increases their competitiveness as a strategic partner.
Incap has operations in Finland, Estonia, India and China, and the company
currently employs approximately 570 people. Incap's share is listed on the
Nasdaq Helsinki Ltd. as from 1997. Additional information: www.incapcorp.com.


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