Incap to focus on core business

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 will continue 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 both 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."