MIPS AB (publ)

Good morning, everyone. My name is Max Strambits and I am the CEO of MIPS. With me today, we also have our CFO, Karin Rosenthal, and we will take you through the interim report of the first quarter. So if we look at the key highlights of the quarter Q1, it was a strong start of the year. 30% growth in the first quarter if we adjust for acquisition and impact of Forex. We did deliver an organic growth of 25%. We did see growth in all our three categories and all of the key regions. We did acquire the Koroid business in December last year, and that has been well received in the market with a lot of interest for their products. The sales development at MIPS has a very scalable business model. We see with the strong growth that we see, we also had a good improvement of the profitability. And if we look at our adjusted EBIT in the quarter, even though Historically, Q1 is the smallest quarter of the year. It's one of the best Q1s that we ever had, and we actually managed to deliver a 33% adjusted EBIT margin in the quarter, which also means that our EBIT increased with 50% versus prior year. We continue to see some impact by legal costs, so we did spend 7 million on the legal case and the legal dispute that we have in the US. And of course, we also see a negative impact from Forex headwind in the quarter, which of course also impacts the profitability. We are happy to see that our positive momentum that we see on the market is implemented and impacted by the overall implementation of our strategic initiatives. And of course, especially the actions on product development and marketing. Really good to see that all the actions that we have there has a really positive effect on our overall market performance. In sports, we saw good development, good quarter with 24% net sales growth. Adjusting for acquisition in Forex, the organic growth was 28%. We continue to see good performance in the European market. And of course, we saw also positive development in the challenging US market, which is of course good to see. We continue to see very strong performance in bike and actually managed to deliver volume growth in the 10th quarter in a row, which is quite a good streak, of course. Strong season in the snow subcategory, driven by a favorable European market. We did actually see strong sales also in the snow category in North America and market despite poor weather conditions, especially in the western part of the US. And of course, we all hear and heard that the snow and winter season in the US market was not fantastic. So good to see that we could deliver growth also under those market conditions. And we do see good interest in both MIPS and Koroid and the long-term positive outlook that we have in the sports category remains. If we then go over to Moto, we see continued growth in Moto. Good performance with 33% growth in the quarter, adjusting for acquisition and Forex. Organic net sales grew with 16% in the quarter. Motocross remains the key driver, but it's also encouraging to see that a lot of the hard work that we have done on the on-road subcategory starting to pay off with a lot more brands launching in this category. And of course, we continue to roll out new innovations in Moto and of course, looking forward to quite an exciting 2026. And also here, no change to the long-term outlook, good opportunity to continue to grow also in this category. If we look at safety, of course, inclusion of Koroid makes our relevance in this category even bigger. We saw an increased momentum in safety after a challenging period related to tariff uncertainty in the US. Net sales growth was 135% in the quarter, and adjusting for acquisitions and Forex, organic growth was 6% in the quarter. Substantial reinforcement of the category achieved through the integration of Koroid and of course being able to offer also a lot more product and we do see good interest both from new and current customers in both MIPS and Koroid's portfolio which now also includes body protection, gloves and footwear which gives us of course a lot of opportunities to continue to grow in the category. And we remain as excited about the opportunities in the category. No change to the long-term outlook and good opportunity to continue to grow in the category. And if we look at the development in our different categories, sports, We did see 24% growth. Organic growth was 28%. Good to see good performance across the geographies. Europe continues to be the powerhouse of our growth, but we also see that despite challenging conditions, we actually perform really, really well in the US market. Molto, we did see 33% growth. Organic growth was 16% in the quarter. Still a very strong position in motocross, but also good that the important on-road subcategory is starting to accelerate. And then in safety, 135% growth. Organic growth was 6%, which is, of course, a little bit slower than we expect. And of course, we expect that to pick up through the year. With that, I hand over to Karin.

Good morning, I'm Karin Rosenthal, CFO of MIPS, and I will take you through the financial part of the presentation. We saw good development in the first quarter with an increase in net sales of 30%. Koroid added 18% sales growth in the quarter and adjusting for that and the negative Forex effect of 13% due to a stronger SEC versus US dollar. Net sales increased 25% organically. Gross profit increased with 29% with a gross margin of 71.1% versus 72.1% last year. We saw good underlying improvement in profitability. and adjusted EBIT, which is adjusted for the legal cost, increased by 50% with an adjusted EBIT margin of 33.2% versus 28.8% last year. And OPEC was impacted by legal cost of 7 million in the quarter and 9 million in the quarter last year, which was adjusted. Operating cash flow amounted to 18 million and was impacted by higher customer receivables, driven by a later invoicing due to the Chinese New Year. If we look at our financial KPIs, 25% organic growth, 33% adjusted EBIT margin, and 18 million in operating cash flow. If we then turn to the next page and look at the balance sheet and cash flow, We have a cash and cash equivalence of 180 million in the quarter versus 240 million end of last year. And we have done an amortization of 50 million. As you already know, we made an acquisition last year and we have a revolving credit facility and that is now amounting to 250 million. And net debt versus adjusted EBITDA for the last 12 months amounted to 0.3 times. And that's well below our covenants of 2.0 times. And the board proposes a dividend of 2.5 SEK per share. And that corresponds to 55% of group's net earnings for 2025. I then hand over to you, Max.

So if we then summarize the quarter, good development in the quarter with 30% net sales growth, organic net sales growth adjusted for acquisition and Forex was 25%. We did grow in all the three categories despite challenging conditions. We continue to see strong performance in Europe, but also the North American market continues to develop well. Asian market has actually stabilized and as you remember that has been quite soft performance in Asia especially related to the Chinese consumer market and we start to see that that has stabilized and actually if we look at this quarter the organic growth for the Asian market was up a little bit Only 6%, but 6% is still, of course, better than decline that we have seen before in the Asian market. So good to see that that market seems to be also coming back. The integration of Koroid is working well. Good interest from current and new customers for the acquired portfolio. Good underlying improvement in profitability despite Q1 being the smallest quarter of the year. Profitability partly offset by legal costs, of course, and unfavorable Forex headwind. We will continue to support our customer in the defense of the legal dispute that we flagged before. at a similar rate as we did in 2025. And we remain positive on our long-term outlook and, of course, the delivery of our financial targets. And with that, I open up for questions.