Translation: Original published in Finnish on 08/06/2026 at 07:00 am EEST

Incap announced on Wednesday that it will launch a share buyback program of a maximum of 15 MEUR. We consider the share buyback program a sensible allocation of capital at the share's current valuation and believe the program has good potential for value creation. With a relatively good financial position, Incap's precondition to execute a buyback program of this size is excellent.

The share buyback program is of a good size

A maximum of approximately 1.47 million shares will be acquired under the program, which corresponds to approximately 5% of the company's total share capital, making the buyback program substantial in size. Buybacks will commence in early August at the earliest and will continue until April 2027 at the latest. The acquired shares are to be canceled monthly to develop the company's capital structure.

We believe the buyback program represents a sensible allocation of capital

As we wrote in our recent Q2 post-earnings company report, Incap's balance sheet remains strong even after the Lacon acquisition, with its net gearing only slightly positive (4% at the end of H1'26). Thus, the company has significant leeway in terms of capital allocation, and its financial position would allow it to continue acquisition-driven growth. In our view, the viability of acquisitions is limited by the available potential acquisition targets and, in particular, their valuation levels, also considering the current valuation of Incap's own shares. Further, the company has its work cut out for it in the near term with the integration of the Lacon acquisition.

Incap's own share valuation, based on current and especially next year's multiples, is clearly below the median of the previous five years, and we consider it cautiously attractive (2026-2027e P/E 13-11x and EV/EBIT 6-8x). Based on the LTM earnings, the valuation is reasonable, but if our estimated earnings growth materializes, it will push the valuation multiples to very moderate levels next year. Thus, the scale of the company's earnings growth in the coming years will largely determine the value creation of the share buyback program. Overall, the current valuation level of the share, combined with Incap's financial position, provides good conditions for value creation through a share buyback program.

With our estimates, the company's financial position will remain roughly net debt-free despite the buyback program, considering our estimated free cash flow development and the presumably fully implemented buyback program. Thus, despite the buyback program, the company has leeway in terms of capital allocation due to its financial position.