MIPS AB (publ)

Good morning, everyone. My name is Max Stramnitz, and I am the CEO of MIPS. With me today, I also have MIPS CFO, Karin Rosenthal, and we will walk you through the Q2 results presentation. And if we start with the first quarter and the key highlights, it was a strong quarter with 31% organic growth. Year to date, organic growth is now at 14%. We saw good development in all categories and in all regions, which is, of course, very good to see in these times. The interest in implementing MIPS safety system in new helmets remained high. You see that also in the project revenues in the quarter. And we continue to increase the market share and the penetration of MIPS throughout the world. No change of previous assumption of a gradual recovery of growth in 2024 and that of course continue also into the second quarter. And we remain confident in our long-term strategy and our financial targets. If we then start with sport, we saw strong development in bike and snow with 33%, but also good performance in the little smaller subcategory equestrian. We continue to see positive order momentum in bike, and our previous assumption of recovery in bike remains. And we have now seen three quarters with consecutive growth in bike, which we are, of course, happy to see after quite a tough market situation. We see that inventory levels have returned to a more healthy level, but the market conditions are still challenging around the world. And we are long-term positive on the outlook in the sports category. If we then look at Moto, we continue with a positive momentum there, also good performance with 14% growth in the quarter. The retail environment has improved a little bit, especially for the important US market, but it is still softer than normal. We did implement quite a lot of initiatives and they start to have an effect. especially through new launches. We also have improved sell-through activities on the market. And of course, we also signed new partnerships. We did also host a safety symposium together with MXGP and FIM in the end of May, where we saw great interest from both media and brands. And this is a really important event. to improve awareness in the category. And of course, we also joined as the main sponsor of MXGP. So a very important event to drive awareness in the category and especially around safety. And also here, we see no change to the long-term outlook. We continue to see a really strong interest of MIPS in the category. And then if we look in safety, We saw good development with two important launches in the quarter. First of all with MSA, which is one of the bigger brands in the safety category. And also we did launch forestry helmets with Husqvarna. And we're really happy with the platform we have where we can continue to drive growth and deliver volume in the category. The volume development, even though it's a record quarter for us, it's somewhat slower than we expected, despite that we see very good interest on both the US and the European market. But of course, we expect that to change and already coming quarters, we expect that volume will start to increase more and we will see even stronger development in this category. If we then look at the category performance in a little bit more in detail, sports were up 33% in the quarter year to date is now 14% driven by both bike and snow. We see very good performance in the question, but of course, being a very small subcategory, it has limited effect on the total performance, but really happy with the development that we see in sports. In motorcycle, We continue to develop well, and we see that numbers are increasing again after quite tough market conditions. And we had 14% growth in the quarter. And if we look at the year-to-date performance, 8%. And of course, safety, small numbers. But of course, we see that that is going to change. And with that, I hand over to our CFO, Karin Rosenthal.

Good morning. I'm Karin Rosenthal, CFO of MIPS, and I will take you through the financial part of the presentation. We saw great development in the second quarter with an increase in net sale of 31%, and no change after adjusting for FX. Net sales also increased 31% organically. Gross profit increased with 37% and we had a gross margin of 72.9%. And that's up three percentage points versus last year. And the increase is mainly due to lower share of fixed costs and product mix effect. In OPEX, we continued to invest in our strategic priorities during the quarter. A strong EBIT that was up 125% to 52 million. And the EBIT margin increased with 16.3 percentage points to 38.9% versus 22.6% last year. And this shows how scalable our business model is as net sales increase it will run through and have a positive effect all through our P&L. And good operating cash flow of 29 million in the quarter. And looking at our financial KPIs, 31% organic growth, an EBIT margin of 39%, and 29 million in operating cash flow. We then turn to next page and look at the development for the first six months. Net sales increased with 14% and no changed after adjusting for FX. Sales also increased 14% organically. Gross profit increased 16% and we had a gross margin of 71.6% versus 70.4% last year. In OPEX, we continue to invest in our strategic priorities, marketing and R&D. And EBIT was up 70% to 65 million. And the EBIT margin improved by 10.1 percentage points to 30.3% versus 20.2%. And operating cash flow was 20 million. And then looking at the financial KPIs, organic growth of 14%, EBIT margin of 30%, and operating cash flow of 20 million. If we then look at next page, and we are now on page 9, balance sheet and cash flow, we have a strong cash position with cash and cash equivalent of 266 million. We paid out dividend of 159 million in May. Corresponding to six SEC per share. And just to remind you that MIPS don't hold any loans. And operating cash flow in the quarter amounted to 29 million. And we had an equity ratio of 85%. Over to Max.

Thank you, Karin. So if we then summarize the quarter, it was a very good quarter with 31% growth. And we're really happy to see that we grew in all categories and also in all geographies, which is, of course, really good to see in these times. We see year-to-date sales now in positive territory with 14% growth year-to-date. And it was also really good for us to see that we actually, during the quarter, celebrated that we have delivered more than 50 million units to Helmet equipped with MIPS, which is, of course, a fantastic number and something to be really, really proud about. Our assumption remains the same as previous quarter. We do expect gradual recovery of growth throughout 2024. Our view is that our sales will reflect market sell-out with less impact from our customers' destocking of their own inventory. So what does that actually mean? I think it's really important to realize that the market that we see out there is not super strong. It's still a very challenged consumer. We see that in all markets, of course. What happened in 2023, which of course was the key results of us declining in sales, was that a lot of our customers, they were, instead of buying from MIPS, taking from their own inventory. Now, when the situation has normalized, they start to buy from us again. And of course, if you have soft comparators, they start not to deplete their own inventory, but start buying from us again. Of course, that has an immediate effect in our numbers. And of course, that's one of the key drivers of growth. And if you then also add that we are stealing market shares in all regions and implementing a lot of new helmets equipped with the MIPS technology, then, of course, you get a good, strong growth number. And that's what we're seeing at the moment. We're really happy with our strategy that we have. And you see that also during the quarter, we have a strong financial position and we have confidence in our long-term strategy and the delivery of our financial targets. And with that, we open up for questions.