MIPS Interim report January - June 2021
- Net sales increased by 115% to SEK 142m (66), organic growth amounted to 139% during the quarter.
- Operating profit amounted to SEK 72m (20)
- Operating margin was 50.7% (29.7)
- Cash flow from operating activities amounted to SEK 56m (23)
- Earnings per share, diluted, amounted to SEK 2.08 (0.61)
- Net sales increased by 84% to SEK 225m (122), organic growth amounted to 107%
- Operating profit amounted to SEK 111m (36)
- Operating margin was 49.5% (29.4)
- Cash flow from operating activities amounted to SEK 125m (38)
- Earnings per share, diluted, amounted to SEK 3.30 (1.07)
Fantastic quarter with 139 percent organic growth
After a strong start of 2021, we managed to accelerate our growth even further during the second quarter and deliver an organic growth of 139 percent. This means that during the first six months of the year we delivered an organic growth of 107 percent. Despite a challenging, supply chain, we have managed the situation in a very satisfactory way.
The increase in sales was mainly from the Sport category, driven by high demand for solutions for bicycle helmets, where our existing customers continue to broaden their range with MIPS solutions. The growth numbers were helped by weak prior year comparator due to the pandemic situation. In the Motorcycle category, demand was strong, and we saw a very good development in the quarter. We are still in an early phase in our Safety category and therefore sales can be uneven between quarters. We see great interest within Safety and we are convinced that both the number of brands and volume will increase during the year, as previously communicated.
As in many other industries, we see cost increases in many of our key materials, therefore we announced price increases to our customers that will be effective from Q3 and onwards.
Operating profit increased by 266 percent during the quarter and amounted to SEK 72m (20). During the first six months of the year, Operating profit increased by 209 percent and amounted to SEK 111m (36). The Operating margin improved during the quarter to 51 percent (30) and amounted to 49 percent (29) during the first six months of the year. Operating cash flow developed very well and amounted to SEK 56m (23) during the quarter. During the first six months of the year, operating cash flow has strengthened significantly and amounted to SEK 125m (38).
Helmet category Sport - Very strong sales growth
We continue to see a high demand for our solutions in bicycle helmets and our assumption is that this strong demand will continue for the rest of the year. We are happy to note that our sales in snow helmets were significantly better than the total winter sport market. Two key contributors: 1) More models and brands being launched equipped with MIPS and 2) The geographic exposure of our largest helmet brands. Sales in Southern and Central Europe have been weak due to temporary shutdowns of many ski resorts. In our largest markets US and the Nordic countries, on the other hand, most of the ski resorts have been open and there we see relatively good sales of snow helmets. Our assumptions for 2021 is that we will see growth also within snow helmets, compared our previous assumption of flat to declining sales.
Helmet category Motorcycle – Very strong sales development in the second quarter
In the Motorcycle category, we delivered growth of 370 percent during the second quarter. During the first six months, we achieved a strong growth of 76 percent. Growth continues to be driven by existing brands that broadens their range with MIPS solutions, but we also see a positive effect of new brands launching helmets with MIPS solutions. We view the development in this category very positively going forward.
In Motocross, we have continued to advance our positions and we are not far behind the one we have in bicycle and snow helmets. We still have some way to go before MIPS solutions are the expected solution in road motorcycle helmets, but we see increased interest in the category and with several new brands, we advance our positions in this type of helmets as well.
Helmet category Safety – Increased interest for MIPS solutions in construction helmets
Early in July, the American helmet manufacturer PIP (Protective Industrial Products) launched its collaboration with MIPS. With the partnership with PIP, we have begun our establishment in the important American market. PIP is a leader in protective equipment, especially in hand protection, and the launch with MIPS is an important step for PIP and their continued expansion in construction helmets.
We have previously communicated that more brands within construction helmets will launch products with MIPS solutions during 2021. At the end of October, the world's largest trade fair for personal protective equipment will take place in Düsseldorf. I am happy to announce that during the fair, several new safety helmets with MIPS solutions will be launched. MIPS will thus be present in the safety category in several large European markets.
Continued good development in 2021, our financial goals remain unchanged
2021 has continued in a very satisfactory way. I am pleased with the development in all three of our categories and that we have continued to deliver against our strategic ambitions. We see continued strong demand for our products and I look forward to the journey towards achieving our long-term goals.
President and CEO