MIPS INTERIM REPORT JANUARY – JUNE 2018
7:30 am / August 16, 2018
APR – JUN
- Net sales increased by 52% to SEK 55.6m (36.6).
Adjusted for currency exchange rate effects the increase was 53%
- Operating profit increased to SEK 21.7m (11.0).
Adjusted operating profit* also increased to SEK 21.7m (11.5)
- Operating profit includes litigation costs of SEK 2.9m (1.9) relating to the patent infringement lawsuits** the company has been party to
- Operating margin increased to 39.0% (30.2).
Adjusted operating margin* also increased to 39.0% (31.5)
- Cash flow from operating activities increased to SEK 5.9m (0.0)
- Earnings per share diluted, amounted to SEK 0.67 (0.34)
JAN – JUN
- Net sales increased by 37% to SEK 79.1m (57.7).
Adjusted for currency exchange rate effects the increase was 42%
- Operating profit increased to SEK 23.4m (6.1).
Adjusted operating profit* also increased to SEK 23.4m (13.1)
- Operating profit includes litigation costs of SEK 4.1m (3.0) relating to the patent infringement lawsuits** the company has been party to
- Operating margin increased to 29.6% (10.6).
Adjusted operating margin* also increased to 29.6% (22.7)
- Cash flow from operating activities increased to SEK 14.3m (3.9)
- Earnings per share diluted, amounted to SEK 0.74 (0.19)
STRONG DEVELOPMENT IN THE QUARTER
With a growth of over 50% and an almost doubled operating profit during the quarter, I am pleased that MIPS continues to develop in line with its long-term plan. Net sales, adjusted for currency effects, increased during the quarter by 53% to SEK 55.6m. During the first six months, net sales, adjusted for currency effects, increased by 42% to SEK 79.1m. The sales increase is driven by the fact that more and more helmet models from leading brands are now being marketed with MIPS BPS. After a soft start at the beginning of the year in the snow category, sales for this category increased during the second quarter, while the important bicycle and motorcycle categories continued to grow strongly. Growth and our scalable business model contributed to improve our adjusted operating profit to SEK 21.7m (11.5) with an adjusted operating margin of 39.0% (31.5) during the second quarter. For the first half of the year, adjusted operating profit improved to SEK 23.4m (13.1) and the adjusted operating margin increased to 29.6% (22.7).
INCREASED PENETRATION WITH OUR KEY CUSTOMERS
Several world leading helmet brands have expanded their range of models with MIPS BPS during the year. Through close development cooperation and sales support training, we have succeeded in ensuring that several brands now offer product lines where MIPS BPS is largely implemented in all models.
MIPS BPS VALIDATED BY EXTERNAL TESTS
In United States, Virginia Tech University has developed a rating method for bicycle helmets that includes testing of rotational motion and its impact. The rating method is based on research and considers the forces that arise in an oblique fall. In the tests carried out, all top-rated helmets (5 stars) were equipped with MIPS BPS. Virginia Tech’s rating system is similar to the car industry’s Euro NCAP and will help guide consumers at the time of purchase. We have previously seen similar tests and results in Swedish tests conducted by Swedish insurance companies and other test institutes. It is positive to see that testing helmets for rotational motion is now also conducted internationally and that MIPS’ technology has once again been confirmed as having a positive impact.
INCREASED INTEREST IN SEVERAL AREAS
At Eurobike in Germany, the world’s largest bicycle fair, MIPS’ successful progress continued. More helmets than ever, equipped with MIPS BPS were exhibited and the major helmet manufacturers presented MIPS BPS in their product ranges in a more prominent way than previously. It is apparent that professional users are also increasingly concerned about their personal safety; half of all the cyclists in the two major bike races “Tour de France” and “Giro d’Italia” were using MIPS BPS helmets. We are proud to help ensure that so many more athletes have improved protection.
LEADING POSITION AND EXCITING FUTURE
During the first half of the year we have successfully protected our intellectual property rights and concluded legal processes. We will defend and strengthen our intellectual property rights. MIPS research is conducted in collaboration with the Royal Institute of Technology and together with our own ongoing product development activities, it gives us a unique position in the industry. We are a team that represents an unbeatable base of knowledge and experience that is highly appreciated by our partners. We are constantly working to provide an even better preventive protection for active people.
I am pleased with the company’s and our customers’ development. With MIPS ability to translate research results into commercially successful products, we have a strong foundation to achieve our 2020 goals.
President and CEO
FOR FURTHER INFORMATION, PLEASE CONTACT:
Johan Thiel, President and CEO
phone +46 73 399 65 88
Max Strandwitz, CFO
phone +46 70 961 17 54
This information is such that MIPS AB (publ) is obliged to disclose in accordance with the EU’s Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on 16 August 2018 at 7.30 a.m. CET. MIPS will present the Interim report at a teleconference on 16 August 2018 at 10.00 a.m. CET. To participate, please register at: http://emea.directeventreg.com/registration/6066408
MIPS is a world-leader in helmet-based safety and the protection of the brain. Based on an ingredient brand business-model, MIPS Brain Protection System (“BPS”) is sold to the global helmet industry. The BPS solution, which is patented in all relevant markets, is based on 20 years of research and development together with the Royal Institute of Technology and the Karolinska Institute, both located in Stockholm, Sweden.
MIPS headquarter with 26 employees engaged in research and development, sales and administration is in Stockholm, where its product and technology test facility is also located. Production and manufacturing operations take place at sub-contractor facilities. MIPS is traded on the Nasdaq Stockholm stock exchange. For more information, visit www.mipscorp.com.