Year-end report 2021
- Net sales increased by 41% to SEK 198m (140), organic growth amounted to 35% during the quarter
- Operating profit amounted to SEK 104m (76)
- Operating margin was 52.6% (54.4)
- Cash flow from operating activities amounted to SEK 81m (49)
- Earnings per share, diluted, amounted to SEK 3.00 (2.23)
- Net sales increased by 67% to SEK 608m (365), organic growth amounted to 72%
- Operating profit amounted to SEK 326m (167)
- Operating margin was 53.6% (45.8)
- Cash flow from operating activities amounted to SEK 277m (116)
- Earnings per share, diluted, amounted to SEK 9.64 (4.93)
- The Board of Directors proposes a dividend of SEK 5.00 (3.50) per share, corresponding to 51% of net earnings during the year
Strong fourth quarter closes a successful year
The fourth quarter closes a successful year, with our highest ever turnover and organic growth of 35%. We are particularly pleased about the growth given that the fourth quarter of 2020 saw growth of 77% compared with the same period in 2019. We have thereby delivered organic growth of 72% for the 2021 full year.
Our scalable business model was a contributing factor to our continued progress during the quarter; despite major investments in marketing and product development, operating profit increased by 37% to SEK 104m (76). During the year, operating profit has increased by 95% to SEK 326m (167).
The operating margin amounted to 53% (54) during the quarter. For the full year, the operating margin increased to 54% (46). The operating cash flow continued to develop well amounting to SEK 81m (49) during the quarter. Cash flow continued grow stronger during the year and amounted to SEK 277m (116) for the 2021 full year.
We are satisfied with the progress made in our sustainability work this year. This year, a major part of our work involved mapping out MIPS’ total climate impact which is essential for ensuring that we focus on the aspects where we can make the greatest difference. This work will form the most important building block for our future sustainability work.
The MIPS safety system is now part of 883 helmet models supplied by 143 customers
In total, we supplied the MIPS safety system to 12.6 million helmets during the year. Our largest customers have continued to expand their assortment of helmets equipped with MIPS solutions which has generated very good growth. During the year we continued to grow in all the geographic markets we operate in, and by the end of 2021 MIPS solutions had been implemented in 883 helmet models, compared to 729 helmet models the year before. The number of customers has also increased and at the end of the year we had 143 customers in total, an increase of 22 customers compared to the prior year.
Very good demand for our products, but global conditions remain unpredictable
Despite challenging times in the world, we have continued to deliver very good growth during the year. Supply chain has faced constant challenge, particularly in the fourth quarter. During the fourth quarter, many helmet factories in China were affected by the power restrictions implemented at the end of the third quarter. Consequently, the demand for helmets could not be fully met, in terms of manufacturing. Neither in the fourth quarter nor during the full year did MIPS fail to fulfil an order, but the general demand for helmets could not be met and the helmet factories have not been able to produce at full capacity. This means that global stock levels within the retail trade continue to be low and are expected to remain so at least during the first six months this year.
It is difficult to get a view of all the future challenges, but we're convinced that we will need to manage continued constraints within our supply chain. Nonetheless, our flexible business model equips us well for the next quarter and we still see strong demand for our products going forward.
Helmet category Sport – strong progress throughout 2021
The good progress made in the Sports category continued throughout the fourth quarter with 45% growth. Volumes were driven mainly by sales of bike helmets, but also snow helmets and riding helmets.
We believe that the positive trend in the bike subcategory will continue and that we will therefore still see good consumer demand in this category going forward.
Helmet category Motorcycle – continued strong level of interest in MIPS
In the Motorcycle category we saw a decrease of -22% in sales during the quarter, completely driven by the postponement of manufacturing as the production of bike helmets was given priority in the factories during the quarter. The category grew by 47% for the full year. Our positive outlook for the category remains and we see continued high demand for helmets equipped with MIPS safety system. This quarter we participated in the first trade fair for almost two years, EICMA in Italy. While this trade fair was smaller than previous years, we experienced fantastic interest and response from the industry. We still have a very positive outlook for the Motorcycle category.
Helmet category Safety – Strong customer base established
2021 was a successful year in the Safety category. Our goal during the year was to establish a
customer base, which we have achieved through a total of nine launched partnerships. We are also beginning to see a greater acceptance of and demand for MIPS products from end customers, such as large construction companies. Our focus for 2022 will be to drive sales together with our existing customers, but naturally also to establish collaborations with new customers.
Expansion of our customer offering
During the EICMA trade fair, we launched our new Virtual Testlab (VTL) concept. VTL is the name of the method we use to perform data simulations of the properties of a helmet and virtual testing of the helmet before it goes into production. VTL is a tool that provides our customers with support in their product development, as well as an opportunity to optimize their material usage, thus allowing them to work more sustainably, efficiently and cost-effectively.
At the start of 2022, we acquired the intellectual property rights for a technology designed to optimize the EPS foam that is often used in helmets. The technology enables reduced materials usage when manufacturing helmets while also decreasing the weight of the helmets. Through this acquisitions MIPS has taken another step forward in expanding our customer offering.
Marketing investments to increase awareness
During the quarter we also launched our new trade booth, designed with our new visual identity, which was extremely well received by the fair participants, customers and others.
During the quarter we welcomed a fifth athlete to Team MIPS, Marion Haerty. She is considered one of the best snowboarders in the world and is a four-time Freeride World Tour champion. Adding Marion to our team of MIPS ambassadors for helmet safety, which now includes five top athletes, has resulted in an even more complete team.
We also rolled out our first media campaign and launched our new training academy for our customers and store personnel. Both of these initiatives are important tools for raising awareness about MIPS and our technology around the world.
Fantastic progress during the year
I am very pleased with progress during a year in which we have managed the challenges we’ve faced, such as shortages in capacity and raw materials, in a good way. We have continued to strengthen our position in all our three categories, we have carried out more customer projects than in any other year, we have made great progress in our sustainability work, and we have accelerated our marketing investments to ensure that we continue to raise the awareness of MIPS around the world. These are all actions that can be difficult to implement even under normal circumstances – doing them during an ongoing pandemic and also delivering organic growth of 72% during the year is testimony to the responsibility and engagement shown by every MIPS employee during the year.
The combination of our great progress within our established categories, Sport and Motorcycle, and a new customer base within the Safety category, along with the fact that the global market for Sports helmets has grown during the pandemic, boosts our outlook for MIPS’ growth opportunities. We therefore intend to present our strategy and the updated financial targets during a Capital Markets Day on 9 June 2022.
Stockholm, February 2022
President and CEO