Incap is an asset-light, working-capital-heavy EMS provider (PCBA + box-build) for industrial and cleantech OEMs across India, Estonia, Slovakia, the UK and the US. It earns genuinely high returns — 19.2% adjusted ROIC, EP +€11M — on a net-cash, 68%-equity-ratio balance sheet, with a clean APM (only the PPA add-back we reject).
The franchise is concentrated: the largest single customer is 44.7% of revenue (top-4 = 61%) — simultaneously the scale advantage and the dominant risk. The forward story is the transformational Lacon acquisition (closed Feb 2026, ~€66M revenue, ~€50M price, €30M new debt) adding defence/railway/medical and a German base. We analyse FY2025 standalone because Lacon loads the Q1 balance sheet (IC) with only weeks of earnings — an LTM would spuriously crush ROIC.
On adjusted NOPAT capitalised at WACC−g, the reverse-DCF base sits ~€11–12 versus ~€9, with PEBV 0.92 — reasonable-not-cheap for a 19% ROIC business; EV/IC ~2.2x and NOPAT/EV ~8.9%.
Base €11 on Lacon margin-accretion and ex-FX organic re-acceleration; bull €13 if Lacon integrates well and customer concentration eases; bear €8 on integration setbacks or a customer-loss shock.
The market pays today’s enterprise value for roughly -9.3% NOPAT growth over 5 years. The business earns 19% on capital against a 8% cost of capital (spread +11.2 pp); the no-growth value is €11/share (126% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | €13 | +5% | +44% | 30% | Lacon integrates well; concentration eases |
| Base | €11 | -1% | +22% | 45% | Lacon accretion + ex-FX organic recovery |
| Bear | €8 | -14% | -11% | 25% | Integration setback or anchor-customer loss |
| Prob-weighted | €11 | — | +20% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 15 | 16 | 17 | 19 | 20 | 24 |
| 7.25% | 13 | 14 | 15 | 16 | 17 | 20 |
| 8.00% (base) | 11 | 12 | 13 | 14 | 15 | 17 |
| 8.75% | 10 | 11 | 12 | 12 | 13 | 15 |
| 9.50% | 9 | 10 | 10 | 11 | 12 | 13 |
Green = fair value above the current price of €9.01. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Adjusted ROIC 19.2% > 8% WACC, EP +€11M — strong value creation for an EMS, net cash.
~€66M revenue added, new German base + defence/railway/medical end-markets — the forward growth + de-concentration lever.
Deep design-in / qualified lines create switching costs with the anchor customer.
68% equity ratio, net cash pre-Lacon — funds growth and absorbs the deal.
Incap is a high-return, net-cash EMS provider whose value creation is genuine but concentrated, now pivoting on the Lacon acquisition. Reasonably valued at PEBV 0.92. HOLD, medium conviction; base €11.
Re-rate to BUY on H1 2026 evidence of Lacon margin accretion, ex-FX organic re-acceleration, and customer de-concentration.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Revenue | 215 | Consolidated income statement; Note 3 (p103) 📄 p.92 | Consolidated income statement line 'Revenue' EUR 214,592k for 1 Jan-31 Dec 2025. Note 3 confirms 'Revenue from the sale of goods' 214,592 and the geographic split (Europe 125,229; North-America 63,681; Asia 11,254; Africa 3,881; Australia 10,547). NB this is the audited statutory figure; the Borsdata anchor (216.956) and the Q1-2026 key-figure table (which rounds to 214.6) both reconcile to this report number. |
| EBIT (reported) | 25.294 | Consolidated income statement 'Operating profit' 📄 p.92 | Operating profit EUR 25,294k (2024: 29,186k), an 11.79% margin. Matches the Borsdata anchor (25.294) exactly and the Q1-2026 key-figure 1-12/2025 column (25.3). |
| Company adjusted EBIT (APM) | 26.1 | Board of Directors' Report; APM definition p127 📄 p.35 | BoD Report states 'Adjusted operating profit (EBIT) was EUR 26.1 million' (margin 12.1%). Definition on p127: 'Operating profit before non-recurring costs and purchase price allocation (PPA) amortisation.' This adds back PPA amortisation, which mttssn rejects — the sole APM divergence. |
| PPA amortisation | 0.704 | Note 13 Intangible assets; Note 7 (p103) 📄 p.106 | Note 13 amortisation of 'Other intangible assets' = EUR 704k; the note states other intangibles 'consist mainly of customer relationships ... recognised in connection with the acquisitions of AWS (current Incap UK and Slovakia) and Pennatronics Inc (current Incap US)'. Note 7 splits it as Other intangibles 704 + Other capitalised expenditure 13. Kept in opex (add-back rejected). |
| One-off: acquisition costs | 1.7 | BoD Report p35; Note 31 (p116) 📄 p.35 | BoD Report: 'In 2025, non-recurring items comprised EUR 1.7 million in acquisition-related costs ...' (Lacon deal). Note 31 separately states EUR 1.0m of acquisition-related costs were 'recognised in other operating expenses' — the EUR 1.7m BoD total is the figure that ties to the EUR 26.1m company adjusted EBIT, so it is used for normalization. Added back. |
| One-off: insurance compensation | -1.5 | BoD Report p35; Note 4 (p103) 📄 p.35 | BoD Report: '... and EUR 1.5 million in insurance compensation related to the roof repair at the US factory.' Note 4 'Other operating income' shows Insurance compensation EUR 1,690k total. As a one-off GAIN in operating income it is removed (-1.500), reducing adjusted EBIT. The compensation funded leasehold improvements (Note 4 / Note 12). |
| Lease liability | 5.573 | Consolidated balance sheet; Note 28 (p114) 📄 p.93 | BS lease liabilities = 3,767k (non-current) + 1,806k (current) = 5,573k. Note 28: leased production facilities in Estonia, UK, Slovakia + offices; ROU interest EUR 0.39m (already below EBIT under IFRS 16). EXCLUDED from IC: ROU assets 5,066k are only ~16% of PP&E+ROU (PP&E 26,163k), so leases are not the primary operating asset. |
| Interest-bearing debt | 21.879 | Consolidated balance sheet; Note 22 (p110); BoD p36 📄 p.93 | Borrowings 19,593k (non-current) + 2,286k (current) = 21,879k, EXCLUDING leases. Note 22 / BoD p36: core is a EUR 19m loan from the company's Finnish bank; covenant net-debt/EBITDA 0.89, equity ratio 67.9%. (BoD's 'interest-bearing liabilities EUR 27.9m' includes the 5.573m leases.) |
| Cash and equivalents | 80.755 | Consolidated balance sheet; Note 18 (p108) 📄 p.93 | Cash and cash equivalents EUR 80,755k (2024: 72,172k). Note 18 confirms 'Cash and bank accounts' 80,755 (no short-term investments in 2025). Drives the net-cash position; excess cash 76.463m subtracted from IC (operational cash = 2% x revenue = 4.292m retained). |
| Total equity | 135 | Consolidated balance sheet; Note 19 / changes in equity (p95) 📄 p.93 | Total equity attributable to parent EUR 135,235k (no NCI — all subsidiaries 100%-owned, p102). Statement of changes in equity (p95) gives the components: share capital 1,000 + unrestricted equity reserve 23,652 + exchange/translation differences -16,577 + retained earnings 127,160. The -16,577k translation reserve is the accumulated OCI stripped out for IC. |
| Income tax / effective rate | -8.342 | Note 10 Income tax; BoD p35 📄 p.104 | Income tax expense EUR 8,342k on PBT 22,311k = 37.4% effective rate. Note 10 reconciliation shows it is inflated by a one-off Withholding tax EUR 2,450k on an intra-group dividend (BoD: 'EUR 2.5 million withholding tax arising from intra-group dividend distribution'). Domestic statutory rate 20%; Pillar Two confirmed not applicable. NOPAT normalized at 26.41% = (8,342-2,450)/22,311. |
How the mttssn view has evolved — each prior dated note is preserved.