MIPS Interim report January - September 2021

July-September 2021

• Net sales increased by 81% to SEK 185m (102), organic growth amounted to 82% during the quarter
• Operating profit amounted to SEK 110m (55)
• Operating margin was 59.6% (53.6)
• Cash flow from operating activities amounted to SEK 71m (29)
• Earnings per share, diluted, amounted to SEK 3.33 (1.61)

January-September 2021

• Net sales increased by 82% to SEK 410m (225), organic growth amounted to 95%
• Operating profit amounted to SEK 221m (91)
• Operating margin was 54.1% (40.5)
• Cash flow from operating activities amounted to SEK 196m (66)
• Earnings per share, diluted, amounted to SEK 6.64 (2.69)

CEO’s comments

Strong progress in the third quarter with 82% organic growth
The third quarter continued as the year started with very good growth, and we saw organic growth of 82 percent during the quarter. We achieved this in spite of the exceptional comparative figures of 108 percent growth for the equivalent prior-year period. During the first nine months of the year we have delivered organic growth of 95 percent. Our increase in turnover was mostly driven by the strong demand for our solutions for bike helmets in the Sport category.
We saw continued fast growth rate in the Motorcycle category and continued high activity with a number of new partnerships in the Safety category.
Operating profit grew by 101 percent to SEK 110m (55) in the quarter. During the first nine months of the year the operating profit has increased by 144 percent to SEK 221m (91).
The operating margin also improved during the quarter, amounting to 60 percent (54). The operating cash flow continued to develop very well amounting to SEK 71m (29) during the quarter. During the first nine months of the year, the operating cash flow has strengthened substantially amounting to SEK 196m (66).

Very good demand for our products but the world remains unpredictable
So far this year we have delivered very good growth, in spite of very challenging circumstances in the world. This is proof that we have managed the situation very well and that we have a business model that works, even in a changing world. It is difficult to get a view of all the future challenges, but we're convinced that we will still need to manage challenges in our supply chain. We are well equipped for the challenges we see ahead with a great demand for our products and a very flexible business model.

Helmet category Sport – strong sales growth continues
During the third quarter the great demand for all kinds of helmets in the Sports category continued. This was mostly driven by high sales growth for solutions for bike helmets. All over the world, inventory levels in retail remain low and our assumption is that they will not return to normal levels in the immediate future. As communicated in the last interim report, we see continued high demand for our products in this category also going forward.

Helmet category Motorcycle – continued high demand
The strong growth in the Motorcycle category continued during the third quarter and we delivered growth of 117 percent in the quarter. Growth was still primarily driven by existing customers that have further penetrated their product ranges with MIPS solutions, but new customers also contributed to the growth. We see continued good demand in the Motorcycle category and are further strengthening our position in both motocross and road motorcycles.

Helmet category Safety – additional brands have launched MIPS solutions in their construction helmets
In the Safety category we continue to see a strong interest for our solutions. At the A+A trade fair, the largest trade fair in the world for workplace safety products primarily for the construction industry, another four new brands launched their partnership with MIPS. With these new partnerships, MIPS has now announced collaboration with a total of nine different partners in the Safety category. Our ambitions remain as previously communicated – to establish a customer base in 2021 and drive growth in volumes in 2022.

Very pleased with progress
The third quarter was another huge step forward in our journey towards our long-term goals. I am pleased with the progress made in all our categories this year and that we have continued to deliver in line with our strategic ambition. We see continued good demand for our products and I look forward to our onward journey towards achieving our long-term goals.

Max Strandwitz
President and CEO