MIPS AB (publ)

Good morning. My name is Max Dramwitz. I am the CEO of MIPS. And with me today, we also have our CFO, Karin Rosenthal. And we will take you through the presentation of the Q3 results presentation. So if we start with the key highlights of the quarter, it was another strong quarter with 61% growth in net sales. If we adjust for foreign impact, we were actually delivering an organic growth of 69%, which is a very strong number. And year to date, we have delivered 29% organic growth. We saw good development in all our three different categories. And just to remind you, we have a sports category, a motor category and a safety category. The consumer market remains challenging and the buying behavior is still very erratic. This is especially visible in the North American market. In Europe, we see that the consumer are coming back quicker and we also see that the consumer sentiment is improving. The interest in implementing MIPS safety system in new helmets remains high and market share and penetration of MIPS continue to increase throughout the world. And we are confident in our long-term strategy and our financial targets. If we then turn to next page in sports, We continue to see strong development in all subcategories. We saw 61% net sales growth in the quarter and all of the subcategories were growing. We experienced that the inventory levels are at the more healthier level, but market conditions are still challenging due to a weak consumer sentiment. And we also see, especially in retail, that there is a much higher emphasis on working capital. The long-term positive outlook in the sport category remains. If we then go to Moto, we did see strong growth in Moto. Good performance with 55% growth in the quarter and year-to-date now at 20%. The situation is much more normalized with customers buying from us again, but still challenging market conditions. No change in the long-term outlook, strong interest from MIPS in this category. And we're also very happy to see that the initiatives that we initiated in Moto is really starting to get traction. If we then go to next and safety, We did see good development. That was the largest quarter to date. We are rolling out new helmets equipped with MIPS, including the ones we have on the market. We now have a very good platform to start generating expected market demand. It was an intense quarter. We had two of the biggest fairs of the year. happening in this quarter with ASSP and NSE in the US taking place. And we saw very high interest for MIPS in those fairs. And we remain positive on the outlook of this category. If we look at the development in the different categories in sports, we did see 61% growth, net sales now at 27%, and we saw strong performance in all the three subcategories in sports. And in Moto, 55% growth in the quarter, and we see that the Moto category is improving quickly. And also, like I said, the initiatives that we started are also starting to generate results, which is positive. And then in safety, although small numbers, we are happy with the development that we see there and close to doubling the sales in the quarter versus last year. And with that, I hand over to our CFO, Karin Rosenthal.

So good morning, everyone. I'm Karin Rosenthal, CFO of MIB. And I will take you through the financial part of the presentation. We saw strong development in the third quarter with an increase in net sales of 61%. And adjusting for FX due to a weaker US dollar versus SEC, net sales increased with 69% organically. Gross profit increased with 62%. And we saw a gross margin of 73.4% versus 73.1% last year. And the increase was mainly due to increase in net sales and the product mix effect. And in OPEX, we continued to invest in our strategic priorities in the quarter. EBIT was up 219% to 48 million compared to 15 million last year. And EBIT margin increased with 19 percentage points to 38.5% versus 19.5% last year. And this show how scalable our business model is as net sales increases. It will have a positive effect all through our P&L. A good operating cash flow of 36 million in the quarter. And if we look at the financial KPIs, 69% organic growth, 39% EBIT margin and 36% operating cash flow. If we turn to next page and look at the development for the first nine months, net sales increased with 27% and adjusting for FX due to weaker dollar versus SEC, sales increased 29% organically. Gross profit increased with 29% with a gross margin of 72.3% versus 71.1% last year. And the increase is mainly due to the increase in the net sales. In OPEX, we continue to invest in our strategic priorities, the marketing and R&D. EBIT was up 112% to 113 million. An EBIT margin improved by 13.3 percentage points to 33.3% versus 20% last year. Operating cash flow amounted to 56 million. So the financial KPIs, 29% organic growth, 33% EBIT margin and 56% operating cash flow. If we then turn to the next page, and we are now on page 9, balance sheet and cash flow. We have a strong cash position with cash and cash equivalents of 296 million. We paid out a dividend of 159 million in May, corresponding to 6 SEC per share. And just to remind you that we don't hold any loans. And operating cash flow in the quarter amounted to 36 million, and the equity ratio was 87%. Over to you, Max.

So if we then summarize the quarter, we did deliver a strong quarter with 69% organic growth. Year-to-date performance now at 29% organic growth. Good performance in all our three categories, and we do see year-to-date growth in all our regions. We are experiencing positive development but it is important to remember that the market situation is neither fully normalized nor particularly stable. It's a very uncertain market out there. Our sales have started to reflect the market sell-out with less impact from our customers destocking their own inventory. We have a very strong financial position and confidence in our long-term strategy and our financial targets. And with that, we open up for questions.