MIPS AB (publ)

Good day, and thank you for standing by. Welcome to the MIPS Interim Report, third quarter, 22.25, conference call and webcast. At this time, all participants are in listen-only mode. After this speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, one, one, on the top of the keypad. You will hear an automatic message advising your hand is raised. To withdraw a question, please press star, one, and one again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the live event. Please be advised that this conference has been recorded. I would like to hand the conference over to our first speaker today, Max Stramlitz. Please go ahead.

Thank you, operator. Good morning, everyone. My name is Max Stramlitz. I am the CEO of MIPS, and with me today I also have Karin Rosenthal, who is the CFO of MIPS, and we will take you through the presentation of the Q3 2025 interim report. And if we start with the key highlights, it was good development with 19% organic growth in the third quarter. Good to see that we did deliver growth in all the categories we are in despite the challenging conditions. Year-to-date organic growth now at 22%. We did see very strong development in Europe with 73% growth. And this was the fourth consecutive quarter where we actually managed to deliver more than 50% growth in Europe. And of course, it's also great to see that we are delivering on our ambition, but also that the proportion of sales getting higher from Europe and of course contributing to the whole growth agenda at MIPS. US market was a bit more challenging, but we actually managed to deliver a small organic growth also on that market and continue to gain market share. The profitability also continued in the right direction. So we had a good underlying improvement in profitability. And the decrease in EBIT that you saw in the quarter is fully explained by legal costs and Forex headwinds. And actually, if we adjust for the legal costs in the quarter, we managed to deliver 42% EBIT margin. So clearly in line with our ambition to get back to the 50% EBIT margin, which is also our long-term target. We have managed the erratic and uncertain communication around tariffs well, but we expect that there will continue to be some uncertainty for some time going forward. And we remain confident in our long-term strategy and our financial target. So if we start with a very short update on tariffs, the implementation of tariffs have brought uncertainty to the short-term outlook in all our three categories in the U.S. market. Price increases from helmet brands to mitigate the cost increases have started to have an effect on the U.S. market, and we see that they are effective from Q3 onwards. We have also seen that helmet brands have started to relocate production outside of China to de-risk potential impact of further tariffs. And of course, the main to-go-to country is Vietnam. But we also see factories opening up in other places in Asia to decrease the overall exposure from the China situation. And then, of course, we also expect that the uncertainty of tariffs is expected to continue also going forward. If we look at sport, we are happy to see that the progress continues. We had a good quarter with 8% net sales in sports, very strong growth in the European market. we'd actually managed to deliver 98% growth, which is, of course, a fantastic number. US and Asia challenged by macro and geopolitical situations, so a little bit softer performance there, but still managed to gain market share. And it's good to see also that we managed to deliver volume growth in bike for the eighth consecutive quarter in a row. Snow was slightly down in the quarter, more relating to facing. If we look at the year-to-date performance, we still show strong growth in snow, which is good to see. And we remain positive on the outlook in the sports category. If we then look in Molto, Molto had a little bit soft quarter in last Q2. And of course, with the impact coming from tariffs, then of course, we have quite the heavy exposure to the US market. So it was good to see that the performance bounced back and that we managed to deliver 28% net sales growth in the quarter. And we did see good development in both the off and the on-road subcategory. Also during the quarter, we launched our new event concept at the MXGP competition in Lommel, Belgium to further increase our activation towards end consumers. And of course, in our brand story and also making sure that we bring the awareness up We have started with a lot more to consumer marketing. We did invest in a trailer. And of course, we will be very active with that coming year to make sure that we also bring the end consumer awareness up. And this was clearly a good test and shows that it's, of course, in the right direction and what we want to do on the market. No change to the long-term outlook, good opportunity to continue to grow in Motos. In safety, we saw a little bit more moderate performance with 26% growth in the quarter. Moderate sales in the quarter was driven by uncertainty from the implementation of tariffs and cost increases with some delays in ordering. If we look at the Underlying in-market performance with new brands and new products, we actually see good performance. It's important to realize that about 90% of our sales in safety goes to the US market and therefore, of course, the tariff and the cost impact is significant. It was good to see in NSE Safety Show that we actually got listed for four helmets to the best in show and actually one of the helmets managed to get awarded best in show. And that clearly demonstrates how strong the product portfolio that we have coming in safety. And of course, disappointing to see the performance in the quarter. But we have a long-term ambition that remains unchanged. And the soft sales that we saw in the quarter, we expect that to be temporary. So if we then summarize the development in the different categories, we start with sports. Good performance despite a very challenging environment. Really happy to see the 98% growth that we had in sports. Moto, good to see that we bounced back in the way we did with good performance in both off and on road. And of course, safety, disappointing, but of course, more to come. And with that, I hand over to Karin.

Good morning. I'm Karin Rosenthal. I'm CFO of MIPS. And I will take you through the financial part of the presentation. We saw good development in the third quarter with an increase in the net sales of 10%. And adjusting for FX due to a weaker US dollar versus stake, net sales increased 19% organically. Gross profit increased with 11%, and we saw a strong gross margin of 74.2% versus 73.4% last year. and the increases mainly explained by the sales mix. We had a good underlying improvement in our profitability year over year. EBIT was down 7% to 44 million, fully explained by legal costs and Forex. And the EBIT margin decreased by six percentage points to 32.6% versus 38.5% last year, And excluding the legal cost, EBIT's margin was 42.1%. In OPEX, the higher spend was fully explained by the legal cost of 13 million in the quarter. And we continued to invest in our strategic priorities. We had a good operating cash flow of 41 million in the quarter. And looking at the financial KPIs, 19% organic growth, 33% EBIT margin and 41 million in operating cash flow. If we then look at the development for the first nine months, net sales increased with 14% and adjusting for FX due to a strong SEC versus US dollar, net sales increased 22% organically. Gross profit increased with and we had a gross margin of 73.6% versus 72.3% last year. And the increase is mainly explained by sales mix. And we have underlying improvement in the profitability. EBIT was down 4% to 109 million, and that's fully explained by the legal cost and the forex. EBIT margin decreased 5.1 percentage points to 28.2% versus 33.3%. And excluding legal cost, EBIT margin for the first nine months amounted to 37.5%. In OPEX, the higher spend was fully explained by legal cost of 36 million and we continued to invest in strategic priorities, marketing, and R&D. We had a really strong operating cash flow of 96 million. Financial KPIs, 22% organic growth, EBIT margin of 28%, and 96 million in operating cash flow. If we then look at the balance sheet and cash flows, We have a strong cash position with cash and cash equivalents of 280 million. And just to remind you that MIPS don't hold any loans. We paid out dividend of 172 million in May, corresponding to 6.5 SEC per share. And operating cash flow in the quarter was 41 million. And we had the equity ratio of 86%. And then I hand back to you, Max.