October-December 2024
- Net sales increased by 58% to SEK 144m (91), organic growth amounted to 52% during the quarter
- Operating profit increased by 260% to SEK 62m (17)
- Operating margin improved by 24.1 percentage points to 42.9% (18.8)
- Cash flow from operating activities increased by SEK 55m to SEK 87m (31)
- Earnings per share, diluted, increased by 234% and amounted to SEK 1.99 (0.60)
January-December 2024
- Net sales increased by 35% to SEK 483m (357), organic growth amounted to 35%
- Operating profit increased by 148% to SEK 174m (70)
- Operating margin improved by 16.4 percentage points to 36.1% (19.7)
- Cash flow from operating activities increased by SEK 132m to SEK 142m (11)
- Earnings per share, diluted, increased by 120% to SEK 5.32 (2.42)
- The Board of Directors proposes a dividend of SEK 6.50 (6.00) per share, corresponding of 122% of net earnings during the year
- Updated long-term financial target to reach net sales >SEK 2 billion no later than 2029
Strong end to the year with solid growth in all our categories and all geographies
We ended the year with another strong quarter and organic growth of 52 percent compared to the same quarter last year. We achieved organic growth of 35 percent for the full year. I am pleased to see that our performance has been strong in all the categories we operate in, and that we have grown in all the geographies we sell to.
In the Sports and Motorcycle categories, we are now seeing a more normalized market situation. In these categories, where we have strong customer awareness, our focus is to drive increased penetration by equipping more helmet models from more helmet brands with Mips solutions. The rate of implementation of Mips technology in new helmets was the highest ever this year. Furthermore, we are still seeing great interest from our customers in all three of our categories in implementing Mips' safety system, also in the Safety category, which is significantly less mature in terms of implementing our type of solutions.
We have experienced that helmet inventory levels have largely normalized this year, and a lot of our growth is due to our customers once again starting to order products from us, rather than taking from their own stocks. We believe this will continue to contribute to our growth in 2025. The fourth quarter was our best quarter ever in the Safety category. This year we have almost doubled the number of helmet models on the market and have substantially strengthened our position in this category.
The increase in net sales that we saw this quarter has led to a considerable improvement in profitability compared to the same quarter last year. Operating profit improved by 260 percent to SEK 62m (17) this quarter, and the operating margin thereby improved to 43 percent (19). Looking at the entire year, operating profit has increased from SEK 70m to SEK 174m, and the operating margin has improved, reaching 36 percent (20). The operating cash flow amounted to SEK 87m (31) in the quarter, and for the full year the cash flow was SEK 142m (11).
The Board of Directors proposes a dividend of SEK 6.50 (6.00) per share for 2024, which corresponds to 122 percent of net earnings for the year. This well exceeds our target of distributing more than 50 percent of our net earnings.
Sustainability - continued focus on delivering against our long-term targets
In terms of our work with sustainability, we continued our journey towards our long-term goals this year. One of our targets was to reduce Mips' carbon dioxide emissions by 8 percent per solution sold this year, and we managed to deliver a total reduction of 18 percent. The second target was to expand the third-party auditing of our supply chain, and we have now audited five of our largest manufacturing suppliers and thus delivered on our target. Our third target was to increase the use of recycled materials in Mips' solutions by at least 10 percent, and we have successfully achieved an increase of 16 percent.
Helmet category Sports - strong progress in all sub-categories
We achieved growth of 56 percent in the Sports helmet category this quarter, and for the fifth quarter in a row we delivered growth in the bike sub-category, Mips' largest sub-category. Global inventory levels are now at a healthier level than during the very turbulent years following the pandemic. This does not mean that all inventory levels have now completely normalized though, and many retailers are still trying to come to terms with an unfavorable product mix.
According to current market data for the bike market in North America, there is a shift in the trend and volumes in the quarter have started to grow again compared to last year. Looking at the entire year, volumes are still down however positive to note is that the market recovery has begun. We are seeing a recovery in Europe where there is growth in many markets once again. However, it is important to remember that there are relatively weak comparative figures for this market as European consumers have faced a challenging situation in recent years. The high levels of inventory that followed the pandemic have made many helmet brands cautious about new product launches. It will therefore be interesting to see how all the new helmet models are received when they are launched during the upcoming season.
Helmet category Motorcycle - strong growth in the quarter
In the Motorcycle helmet category we delivered sales growth of 57 percent for the quarter, and growth of 25 percent for the full year. We are happy to see that the inventory situation has normalized, and also that the initiatives we launched have had the desired effect. As in the Sports category, growth has primarily been driven by customers buying from us again rather than focusing on reducing their inventories, coupled with market launches of new helmet models equipped with Mips' safety system.
Our assessment is that the market has recovered substantially during this recent period, but we are still seeing a challenging consumer market and do not expect the general market situation in the Motorcycle category as a whole to materially contribute to our growth journey in the short term. Our growth will mainly be driven by taking greater market share and the roll-out of new helmet models equipped with Mips' technology.
Helmet category Safety - best quarter so far
We delivered our best quarter so far in the Safety helmet category and we saw good growth of 119 percent. Growth for the full year was 55 percent in this category.
During the quarter we launched a new partnership, and a new helmet equipped with Mips technology, with the HexArmor brand in the US. HexArmor is an innovative, driven helmet producer in the American market and we look forward to seeing how the helmet will be received. Through this launch we have sharpened our offering even further, and it will be exciting to follow developments in 2025. While larger volume sales with selected helmet brands have been slightly slower than we had hoped, we are delighted to see that growth has now taken off and we remain very positive about this category over the long term.
Continued normalization of inventory levels
Progress was strong in the fourth quarter. I am pleased that all of our sub-categories and geographies grew during the quarter. During the quarter, it has been exciting to see the shift in trends that has occurred in the important American market after a challenging period. Our customers are still showing plenty of interest in developing new helmets equipped with Mips' safety system in all three categories, and the number of completed helmets developed with our technology is the highest ever.
The new American president has now taken office, and it remains to be seen how his administration will affect the business relationships with international companies and the geopolitical landscape. Mips sells all products based on Incoterms Ex Works, which means that the buyer takes responsibility for transport costs, fees, taxes, tariffs and so on.
Updated long-term financial target
We remain confident in the strategic plan communicated at our Capital Markets Day in June 2022. The plan is built on three strategic pillars to 1) grow the existing business, 2) open up new channels and markets and 3) capture new opportunities within helmet safety.
We see that we have successfully continued to gain market share and increase the penetration of the number of helmet models equipped with Mips' technology among our customers through our market-leading safety solution.
After summarizing the year, we have assessed the possibilities of reaching our financial targets by 2027. We have seen that it has taken longer for both the retail chain and helmet manufacturers to normalize their inventory levels than expected in connection with our Capital Markets Day. This, together with a relatively uncertain consumer market, geopolitical uncertainty and a new administration in the important US market, means that our new assessment is that we will reach our net sales target of >SEK 2 billion no later than 2029, which is two years later than the target communicated in 2022. Our long-term profitability target and dividend target communicated in 2022 remain unchanged. This means that our financial targets now are:
- Net sales >SEK 2 billion no later than 2029 (previously 2027)
- EBIT margin >50% (no change)
- >50% dividend of annual net earnings (no change)
We will continue to grow our business with our strong market position in the helmet sector, our broad expertise and our patented technology. We will also continue to invest in research and development and in our brand to achieve our ambition.
Stockholm, February 2025
Max Strandwitz
President and CEO
For more information, please contact:
Max Strandwitz, President and CEO
Max.Strandwitz@Mipsprotection.com
tel +46 709 61 17 54
Karin Rosenthal, CFO
Karin.Rosenthal@Mipsprotection.com
tel +46 768 34 63 66
About Mips
Mips specializes in helmet-based safety and is a world-leader in this area. Based on an ingredient brand business-model, Mips' safety system is sold to the global helmet industry. The technology is based on over 25 years of research and development together with the Royal Institute of Technology and the Karolinska Institute, both located in Stockholm, Sweden. Mips' headquarter with 85 employees engaged in research and development, sales, marketing and administration is in Stockholm, where its product and technology test facility also is located. The Mips share is listed on Nasdaq Stockholm. For more information: www.mipscorp.com
This information is information that Mips AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-02-05 18:10 CET.
