January-March 2024
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Net sales decreased by 6% to SEK 83m (88), organic growth amounted to -6% during the quarter
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Operating profit amounted to SEK 14m (15)
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Operating margin was 16.5% (17.5)
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Cash flow from operating activities amounted to SEK -10m (-42)
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Earnings per share, diluted, amounted to SEK 0.44 (0.55)
A stable start to the year
Total net sales decreased by 6 percent this quarter compared with the prior year. This is because we faced strong comparative figures in the snow sub-category, which has a proportionally heavier impact in this quarter. The positive developments that we started to observe at the end of 2023 continued in most of our categories in the first quarter, which is typically the quietest season for Mips.
In our most important sub-category, bike, the growth trend continued with a more normal start to the year. There was growth in the Motorcycle category too and we're happy to see that our sales initiatives with the major brands are starting to bear fruit. We also saw continued positive developments in the Safety category with many new products certified and ready for sales during this spring, which will drive growth forward.
In line with our long-term strategy, we continued our investment in both product development and marketing. The costs associated with these activities, combined with lower net sales, had a negative effect on the profits in the first quarter. Operating profit amounted to SEK 14m (15) during the quarter, a decrease of 12 percent. In the first quarter, the operating margin amounted to 16 percent (17), and the operating cash flow amounted to SEK -10m (-42).
Helmet category Sport - growth in bike, tough comparative figures for snow
For the second quarter in a row we delivered growth in the bike sub-category, and we are seeing that inventory levels of helmets at our customers and at retailers have started to return to more healthy levels.
Sales of snow-sport helmets to consumers were solid and the sub-category is generally still developing well. We didn't manage to achieve growth in the quarter though, as we had strong comparative figures of 60 percent growth last year. We remain positive about the long-term growth opportunities in this sub-category and believe there are good prospects for the next season as inventory levels are generally at normal levels.
In the equestrian sub-category, the Gothenburg Horse Show, one of the largest horse-riding competitions in the world, was held during this quarter and Mips participated as the Official Safety Partner for the second year in a row. It was inspiring to interact with so many representatives from the world of equestrian sports and thereby also get confirmation that Mips has enhanced its position in this from a market size point of view small, yet very important sub-category.
Based on the market signals we've seen during the quarter, our assessment is that the large bike sub-category will develop well in 2024. As we have previously communicated, we believe that inventory levels in the entire bike sector, at the helmet brands and retailers, have now largely normalized across the board. For that reason, after 18 months of major de-stocking by both helmet manufacturers and retail stores, we are now expecting our sales to resemble end-consumer market patterns more closely.
Helmet category Motorcycle - return to growth during the quarter and somewhat better market outlook
Developments improved in the Motorcycle category compared to the last few quarters and we delivered growth this quarter.
Also in this category we have seen inventories start to return to more normal levels. We are happy that, after clearing their stocks of older models, a number of major helmet brands have now chosen to launch new helmet models equipped with Mips solutions developed during 2023. Our focus going forward will still be on working efficiently and closely with the helmet brands to integrate our solutions, and also launch even more solutions that we've developed recently for the sector, thereby driving sell-through volumes with our customers.
During the spring we announced a new partnership with the organizer of the FIM Motorcross World Championship (MXGP) event where Mips will be the Official Safety Partner. We view this as an important platform for continuing to educate the world of motorsports in helmet safety and the risks associated with rotational motion.
Helmet category Safety - many new helmets now certified and ready for roll-out
In the Safety category we have kept up a good pace in terms of launching partnerships with new customers and new helmet models together with these customers. The certification process for new helmet models has taken a longer time than we had anticipated a year or so ago. Many important models have now been certified and we are looking forward to gradually increasing the volumes in this category.
Our collaboration with Husqvarna was launched in April, marking our entry into the market for forestry helmets. So far Mips has launched partnerships with 16 different brands in the category, and last year we doubled the number of helmet models equipped with Mips' safety system in the Safety category. Now that we have established a solid platform of strong partners, our focus in 2024 will be on driving volumes and we look forward to an exciting year of growth.
Confidently looking forward to an exciting year
While we are in the early stages of our recovery, we are satisfied with the progress we've made so far. For instance, during the quarter we have driven growth in most of our sub-categories despite the market remaining uncertain and challenging. Over and above that, we are still seeing a great deal of interest from our customers in developing new helmets equipped with Mips' safety system in all three categories.
We are convinced that we have the right long-term strategy, with a major focus on innovation and steadily building a well-recognized ingredient brand that makes us an essential partner to the helmet sector. This strategy will also underpin our long-term plan going forward and our journey towards achieving our financial targets.
Stockholm, April 2024
Max Strandwitz
President and CEO
MIPS AB 
