Good morning, and welcome to Incap's first quarter 2026 results webcast. My name is Pauliina Tennilä, and I will be hosting this webcast.

Today's speakers are Incap's President and CEO, Otto Pukk, and CFO, Antti Pynnönen. Otto and Antti will present the Q1 results, after which we have time for your questions.

Feel free to post your questions anytime using the Q&A function. With that, I will hand it over to Otto Pukk.

Yes, hello from my side as well, and it's always a pleasure to talk to you guys that are interested in Incap. Let me open up the presentation for you here, and then we can start with looking at the numbers.

A little bit disappointing start of the year. We had a slow month of January and February going into the year.

It was infected by some push-outs in material supplies that we had, and overall a slow, a little bit hesitant start. Already in March, it started to open up, and we clearly have had a positive development when it comes to getting in orders and have still a good outlook and confidence in the year ahead.

That perhaps is not reflected in the numbers, but perhaps is reflected in what we have said around the numbers. Overall, yes, a little bit disappointing figures, but looking ahead, then I feel quite confident in the current situation, and so.

If we talk about things that influenced, Antti can perhaps open up more on this, but still we have an influence not only on the material delivery, but also on the exchange rate in the release, so that also you should keep in mind when you are looking at the figures. Of course, the big thing for us have been the latest acquisition of LACROIX that closed now in the beginning of the year.

We have worked extensively when it comes to the integration process with the new Incap team in Germany and in Romania. We've had a very good start on that cooperation, and I feel that we have been able to cooperate them and start a different workstream now across all different kind of fields in the organization.

I think this will give a strong and solid fundament to move forward. Also, what we see is that the defense orders and so that we were expecting with the LACROIX acquisition is starting to come in now, the order book also for LACROIX looks very positive.

I think in general, we will see more and more possibilities now when we are a bigger corporation and together with the capabilities that we now have taken. I look forward to work with everybody in the team and to harvest different synergies here in the future as well.

We continue to invest in the operations. This time we have been focusing more on creating the data lake and working with investments around that.

We have still a strong belief in our decentralized model, but the 2.0 of that is of course to support that with different kind of tools and solutions as well. This is a very positive development that we are driving currently, and I'm excited to see the result of that moving forward.

A big thing for us, but perhaps not in numbers or things outside the company. Sustainability, of course, has been a hot topic the past years, and now the legislation, of course, in European Union have changed around it, what's mandatory.

We in Incap, we have decided to continue with our reporting. Sustainability remains one of our core values, and is still a very integral part of our daily operations.

We have just released our, of course, sustainability report as well. I hope everybody takes the time to read it.

It's interesting reading, and our work continues even if we are perhaps a little bit massaging the scope and compared to what was mandatory here before, then still this we feel is very important, and so. It's not only about earning money, but how we do it in the big picture.

I want to take the opportunity, as always, to thank the team, even if the figures are a little bit on the lower side, then we know what's ahead, and the team have done excellent work in creating that and those opportunities. Thank you to everybody in Incap.

We had here on the picture, as you see, a great sales meeting here in Germany here just some months ago. I'm looking forward to work now with the whole team in Incap.

We are truly an international company now, and have a lot of really cool and exciting experiences that we can now scale and work on a group level. In that sense, thank you to all of the Incap employees.

With that, I think Mr. Pynnönen, take it away when it comes to a little bit more details and numbers, and then I'll sum it up with the outlook once you're gone through those.

Yes, sure, thanks, Otto. Then, this is a little bit repetition.

Revenue, it was already mentioned, but then what I want to highlight here is the KPI we in our February release disclosed, the outlook is given on a comparable EBITA figure. That number we report now first time, actual was 5.2 million, and then comparison year was 6.0 million, in terms of the percentage, 9.2% versus the 11.5%.

Then maybe just to go through this comparable EBITA, it's basically not very complicated. We have first the operating profit, EBIT, and then we add back amortizations, and then when it comes to amortizations, it's specifically these acquisition-related purchase price allocation amortizations.

Those are added back, and then if we would have any non-recurring items, and those we have also quite a strict policy internally that which are classified as non-recurring items. As you saw, non-recurring were very small numbers in Q1, so that forms the comparable EBITA figure for Incap going forward.

This is the illustration of the key figures. Revenue development on the left side.

On the right side, we have the traditional EBIT line. Revenue is of course expected to continue growing now when we get the full figures of the LACROIX in.

That is something I want to point out as well that quarter one figures, of course, first time included LACROIX figures, but it wasn't more than one month and then some small part of the February month as we closed the transaction on 19th of February, and then LACROIX was consolidated into Incap figures on 20th February onwards. On this slide, we have collected, of course, from our release the main KPIs, not going to repeat those, just pointing out that of course, the LACROIX Group acquisition for Incap was so big one that the figures have impacted, and in the balance sheet, this increase in inventory is a good example from that one.

Massive increase from the delta between the December '25 inventory value and the end of March figure is explained by the acquisition of LACROIX. The readers and investors, analysts who go through our report saw this LACROIX acquisition actually plays a big role explaining most of the deltas if you compare the Q1 '26 against 20 Q1 '25 figures.

If it comes to personnel expenses, this and that as an example. Majority of this is explained by the acquisition.

Interest-bearing net debt, of course, this is also impacted by the LACROIX acquisition, now we are in 8.6 million when it comes to this net debt item. Then we of course had the acquisition-related loan impacting that number in February month, and then the acquisition had indeed a impact in this KPI.

Personnel is nowadays over 3,000, also impacted heavily by the LACROIX. Also maybe a comment on this operational cash flow.

Then Otto mentioned some challenges with the material availability, and of course this kind of short-term challenges that we faced in certain units impacts on the turnover and efficiencies of material handling, inventories, and so forth. That boosted a bit our inventory levels and net working capital items itself.

As cash flow is just a snapshot of the last day of March, then there was some development on those items that impacted indeed the operational cash flow.

Thank you, Antti. Outlook, we have remained the same in that sense.

We believe that the company's revenue and comparable EBITA in 2026 will be clearly higher than in 2025. Even with this little bit of slower start of the year, we still believe in that and feel confident with that.

We have a continued focus on the integration of our new German and Romanian colleagues into the Incap family. This work will, of course, continue, and I look forward to continue with that and see the effects of the work.

We are doing that, as I mentioned, looking into now different kind of tools and data lakes to support our operations. A lot of development projects going on, but at the same time, we see also very positively on the business, and it seems to be that orders are coming in and backing it up, even if a slow start of the year.

That said, we are of course always eager to hear your questions, and so take it away, Pauliina, with the questions.

Thank you, Otto and Antti. The first question is about how much of the delayed Q1 revenue will be delivered in Q2, and how confident are you that the component availability is improving?

Exact numbers I will will on on on the revenue side, we haven't reported, so I can't comment on that. It will be delivered during the quarter two, what was pushed out.

I don't think that there is a systematic problem with components. We we had in the beginning of the year, we saw saw that that in general in the industry as well that that there was some What is driving this foremost is is the development of AI and AI data centers currently, that there there's a big demand on on some of the components, and and and they are in priority as they are are in in buying in big volumes, and and and then the rest of us are a little bit have been behind.

I don't think it's systematic. The component suppliers are working currently with increasing capacity, and and and I don't think that that this this will be now a, how to say, a new component crisis in in that sense.

It's it's it's far from that. It's it's more, I think, I think smaller disturbances.

There's a related question still about the components: was the availability problem in Europe or in India?

That was some types of components and that affected generally the business, it wasn't now in any specific site, but rather in some of specific product ranges that use similar components.

Have you seen order cancellations due to weak economic environment or due to any other reasons?

No, order cancellations we haven't seen. In the contrary, as I mentioned, we have a very strong order book and we have received several, for example in the report, we are mentioning the defense sector orders because that was of course of high interest when we did the LACROIX acquisition, that the potential growth there.

No, in the contrary, I think that there is orders out there and we haven't seen any cancellations.

Maybe I can add some comment on this one. Of course Incap is very, very widely operating in different market segments at the moment, and also in our report so we disclose that the proportion of the biggest customer is more manageable nowadays.

Also when it comes to the Q1 report, I want to highlight that we haven't lost any customers or any major customers, it's just a normal a little bit slowness and the soft market in mainly in January, February, and now it was picking up. This was something I wanted to highlight.

That's perhaps a good point to bring up that the investors that have been following us for a while, they remember that we used to have dependency on our biggest customer, and I think that we have now left behind us, and we are down in very healthy percentages currently. Incap is much more balanced company now with the LACROIX acquisition going in, and also our biggest customer's new normal in that sense and that they have now been on for a while.

Then yeah, we look like a company with totally different risk profile when it comes to dependency of customers. That I'm very happy on the development and look forward to what that means in that sense.

How much did the order book grow, and what is the size, margin profile, and product mix of the new orders?

In the report, we didn't comment the numbers of the order book, and I just wanted to mention that as we had a slower start of the year, to understand that why we are still keeping the steering and why we are looking fairly positively on the year, even if we had a slower start in the numbers. I won't go in on details on that.

When it comes to the order book in general, I think as I said, of course the defense sector is driving the main growth in that, and in other sectors, I think that it's fairly I'd say more stable in that sense. The main growth is defense sector, and also of course what is around things when it comes to this AI data centers, and so there even if the big boys in the industry are taking care of perhaps the servers and the core in those data centers, then companies like Incap, we do a lot around because in a data center, of course there is a lot of different things that go in.

Everything from different kind of cooling systems and energy backup systems and so on, there's plenty of electronics for us smaller players as well that are not in the tier one. Of course that is also driving currently growth and together with the defense and security sector.

Antti, I think you mentioned this already, but just to make sure, is the inventory increase purely due to LACROIX and the delays?

Yes.

I want to say that of course the majority is LACROIX coming into the group, but of course we are driving higher inventory or work in process and so due to the material delays as we have had push-outs in orders, we have had other materials in. Sorry, Antti, I was interrupting you.

No, no. You got it exactly right already, I'm not going to repeat.

That's how it went. Otto already summarized nicely.

I'll give you the next one then.

Okay. Let's see.

I think you mentioned already that LACROIX integration is progressing well, but there is a question about is it progressing operationally and commercially well, and what are the biggest risks to achieving the expected benefits in 2026? No,

I think it's both commercially the integration is going well, and also operationally, the integration is going well. Bear in mind, we still have a decentralized model, of course, also the new companies within Incap has operational freedom and so.

Our integration, of course, in Incap is foremost driven by getting them into our cooperative network. The units cooperate with one each other.

We have a lot of exchange when it comes to knowledge and cooperation, and getting the former LACROIX, Incap Germany and Incap Romania, into those kind of cooperation streams are the key thing. Those both are operational and commercial in that sense.

What we have seen as well now is also an interesting developing, of course there is cross-selling opportunities when it comes to the customer bases that we have and geographical opportunities that we are exploring with it. We also see new requests from or the possibilities in that sense from new customers that again see us in another light.

I know I mentioned it when we did the US acquisition, but every step we get bigger, we get a new interest in Incap from potential customers, and we see that as well. Of course, those effects we will see in a couple of years' time, but there is things that we are working on that of course we expect more in the near future, if that answered the question.

Thank you. How has the war in Iran affected Incap, and have you noticed customers increasing their inventory levels as a result?

I think that in general, we don't see yet any larger supply chain disturbances due to that. I know that has been a question in some forums and among investors before.

We don't see that. Of course, in the long run, having the oil price up will of course affect everybody equal in the industry when it comes to transportation costs and other things.

Currently, we haven't seen any huge increases either when it comes to that. When it comes to stocking up and so, I wouldn't say.

Of course, in some of our military customers and so, where there we have seen perhaps an increase in some sectors, of course during the initial stages of the war, then there was a lot of usage of military material. Of course, the stockpiles and so needs to be replenished.

Otherwise, on other customer segments, I haven't seen any, how to say, panic buys or any this kind of like we had during COVID when everybody bought toilet papers and other things at home. We don't see that in the industry that people are hoarding stuff at home, or customer are hoarding materials or whatnot.

Far, I wouldn't say. Of course, as I said, a distant impact will it be, and we haven't still seen fully how this pays out when it comes to transportation and logistics because those costs for those suppliers for sure have gone up, and that will be reflected in price.

As usual, of course, that is the end customer in the end that pays that increase.

Maybe then moving into India, how is the business in India developing? Are there new accounts there?

No, I think we have had a very positive development in India. Our base customer is stable in that sense on its new normal, as I've been talking about, and we see increase in other customer accounts.

We are working there with some really interesting and exciting customers, and the cooperation goes well, and of course, there's long cycles in this, and so, but we see how our work is developing from prototyping, going up now already into some kind of normal production, and of course will ramp up over time to larger volume. I would say very positive development in India, and also now with the new Incap Germany and Romania joining, there is several opportunities in India as well that we are pursuing with the new customer base that we have acquired.

Still going back to the components, which kind of components or component types have had availability issues?

There's an array of different component, but foremost chips and I would say this, I would say, smarter, more expensive components have had a problem, those that go in. This normal chicken food, as we say, they are always available, but when it comes to more advanced components, there we see.

It's limited to some manufacturers, but of course, it depends on what the designers put into the product and so on.

Good. Then I guess about M&A, one question.

If you're now focusing on the integration of LACROIX, when can we expect another acquisition?

Of course, we have done a major acquisition, and our focus is on integrating that, and that is what we are focusing on or working on currently. That said, of course, I have said it before the acquisition as well, I don't think this is our last one, and once we feel comfortable with that we are taking care of the money that we have spent in a good way and integrate it and so, then of course we will open up that pipeline as well sooner or later.

I won't give any time if that is late this year or in beginning of next year or even earlier or later. I won't give a timeline.

Let's see how it goes. Currently it goes very well, perhaps sooner than later.

Thank you. I think we can take a final question here and maybe combining a little bit two ideas here is that how has the Q2 now started?

How would you comment on that? After this a little bit soft Q1, what gives you the confidence that you can still achieve the '26 guidance?

No, already March was was up in that sense, and so the so the end of of Q3 Q1, sorry, was was up, and and Q2 have continued in the same same line. That gives me confidence, and of course the orders that that backs that up that that we were talking about here before on the order book.

In generally, we see and we don't see any, how to say, other trends or so that that would impact this negatively. Far and so so far, everything is is going according to plan now now when it comes to to moving forward here in in in the second quarter.

I'm excited about about yeah, the outlook of the year and and and so. It looks looks stable and good, and and I'm quite sure we will we'll with the information on hand currently that that we will achieve the outlook that we have set.

Thank you, and thank you, everyone, for good questions and being active. I think we have now covered the questions, and before I hand it back over to Otto, I would like to remind that a recording of this webcast will be available on Incap's website later today.

There will also be a Q&A material that will be published later on. Remember that you can subscribe to Incap's stock exchange releases, press releases, and the IR calendar on Incap's web pages.

Once more, Otto, would you like to end this webcast by wrapping up the Q1? Yes,

thank you very much, Pauliina. Once more, as always, thank you, guys, for following us and having an interest in Incap.

We are always happy to answer questions, and if there was something you didn't get answered here, then reach out to us, and we always try to meet investors and analysts and so on in where we can. Yes, slow start, but at the same time, we still believe in a positive outlook for the year, and we have seen good trends when it comes to order intake and other things to support that.

We are quite confident. I think if I would take one takeaway from this report then the topic that Antti brought up about the customer balance.

With the one customer dependency, this is behind us now, and I think this changes the risk profile on Incap quite significantly that where, as you remember, used to be basically a one-customer company, and now these percentages are down in very healthy numbers, I would say. In the EMS business, it's always so that you have perhaps some customers there that is bigger, up to, I don't know, 20%, 30% of the business, I would still consider very, very normal, and we're well in that range now.

This I think is one key takeaway when you look at Incap, to understand that this is now in our past, and moving forward, we are a quite nicely balanced company. Thank you very much from my side as well, and I want to wish you all a happy Vappu in Finland and Valborg in Sweden and Volbri in Estonia.

Enjoy the time with your families and bring in the spring.