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    MIPS   SE0009216278

MIPS AB (PUBL)

(MIPS)
  Report
Delayed Quote. Delayed Nasdaq Stockholm - 09/24 11:29:45 am
951.5 SEK   -1.96%
07/23MIPS : Interim Report
PU
07/22MIPS : Interim report January – June 2021
PU
07/22MIPS : Interim report January - June 2021
AQ
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MIPS : Interim Report

07/23/2021 | 03:48am EDT

Interim report January-June 2021

April-June 2021

  • Net sales increased by 115% to SEK 142m (66), organic growth amounted to 139% during the quarter.
  • Operating profit amounted to SEK 72m (20)
  • Operating margin was 50.7% (29.7)
  • Cash flow from operating activities amounted to SEK 56m (23)
  • Earnings per share, diluted, amounted to SEK 2.08 (0.61)

January-June 2021

  • Net sales increased by 84% to SEK 225m (122), organic growth amounted to 107%
  • Operating profit amounted to SEK 111m (36)
  • Operating margin was 49.5% (29.4)
  • Cash flow from operating activities amounted to SEK 125m (38)
  • Earnings per share, diluted, amounted to SEK 3.30 (1.07)

The MIPS Group in brief

Apr-Jun

Apr-Jun

%

Jan-JunJan-Jun

%

Full year

SEKm

2021

2020

2021

2020

2020

Net sales

142

66

Gross profit

105

49

Gross margin, %

73.8

74.2

Operating profit (EBIT)

72

20

Operating margin (EBIT-margin), %

50.7

29.7

Profit for the period

55

16

Earnings per share basic, SEK

2.10

0.61

Earnings per share diluted, SEK

2.08

0.61

Cash flow from operating activities

56

23

Dividend per share, SEK

3.50

3.00

115

225

114

165

-

73.3

266

111

-

49.5

246

87

246

3.33

243

3.30

146

125

17

3.50

122

84

365

89

86

265

72.7

-

72.8

36

209

167

29.4

-

45.8

28

211

129

1.09

206

4.96

1.07

207

4.93

38

231

116

3.00

17

3.00

For definitions and description of performance measures and alternative performance measures, please visit www.mipscorp.com

MIPS AB (PUBL) - INTERIM REPORT JANUARY - JUNE 2021

CEO's comments

Fantastic quarter with 139 percent organic growth

After a strong start of 2021, we managed to accelerate our growth even further during the second quarter and deliver an organic growth of 139 per- cent. This means that during the first six months of the year we delivered an organic growth of 107 per- cent. Despite a challenging, supply chain, we have managed the situation in a very satisfactory way.

The increase in sales was mainly from the Sport cat- egory, driven by high demand for solutions for bicycle helmets, where our existing customers continue to broaden their range with MIPS solutions. The growth numbers were helped by weak prior year comparator due to the pandemic situation. In the Motorcycle category, demand was strong, and we saw a very good development in the quarter. We are still in an early phase in our Safety category and therefore sales can be uneven between quar- ters. We see great interest within Safety and we are convinced that both the number of brands and volume will increase during the year, as previously communicated.

As in many other industries, we see cost increases in many of our key materials, therefore we announced price increases to our customers that will be effective from Q3 and onwards.

Operating profit increased by 266 percent during the quarter and amounted to SEK 72m (20). During the first six months of the year, Operating profit increased by 209 percent and amounted to SEK 111m (36). The Operating margin improved during the quarter to 51 percent (30) and amounted to 49 percent (29) during the first six months of the year. Operating cash flow developed very well and amounted to SEK 56m (23) during the quarter. During the first six months of the year, operating cash flow has strengthened significantly and amounted to SEK 125m (38).

Helmet category Sport - Very strong sales growth

We continue to see a high demand for our solutions in bicycle helmets and our assumption is that this strong demand will continue for the rest of the year. We are happy to note that our sales in snow helmets were significantly better than the total winter sport market. Two key contributors: 1) More models and brands being launched equipped with MIPS and 2) The geographic exposure of our largest helmet brands. Sales in Southern and Central Europe have been weak due to temporary shutdowns of many ski resorts. In our largest markets US and the Nordic countries, on the other hand, most of the ski resorts have been open and there we see relatively good sales of snow helmets. Our assumptions for 2021 is that we will see growth also

within snow helmets, compared our previous assumption of flat to declining sales.

Helmet category Motorcycle - Very strong sales development in the second quarter

In the Motorcycle category, we delivered growth of 370 percent during the second quarter. During the first six months, we achieved a strong growth of 76 percent. Growth continues to be driven by existing brands that broadens their range with MIPS solu- tions, but we also see a positive effect of new brands launching helmets with MIPS solutions. We view the development in this category very positively going forward.

In Motocross, we have continued to advance our positions and we are not far behind the one we have in bicycle and snow helmets. We still have some way to go before MIPS solutions are the expected solution in road motorcycle helmets, but we see increased interest in the category and with several new brands, we advance our positions in this type of helmets as well.

Helmet category Safety - Increased interest for MIPS solutions in construction helmets

Early in July, the American helmet manufacturer PIP (Protective Industrial Products) launched its collaboration with MIPS. With the partnership with PIP, we have begun our establishment in the important American market. PIP is a leader in protective equipment, especially in hand protection, and the launch with MIPS is an important step for PIP and their continued expansion in construction helmets.

We have previously communicated that more brands within construction helmets will launch products with MIPS solutions during 2021. At the end of October, the world's largest trade fair for personal protective equipment will take place in Düsseldorf. I am happy to announce that during the fair, several new safety helmets with MIPS solutions will be launched. MIPS will thus be present in the safety category in several large European markets.

2

MIPS AB (PUBL) - INTERIM REPORT JANUARY - JUNE 2021

Continued good development in 2021, our financial goals remain unchanged

2021 has continued in a very satisfactory way. I am pleased with the development in all three of our categories and that we have continued to deliver against our strategic ambitions. We see continued strong demand for our products and I look forward to the journey towards achieving our long-term goals.

Stockholm, July 2021

Max Strandwitz

President and CEO

"Very strong quarter with 139% organic growth"

3

MIPS AB (PUBL) - INTERIM REPORT JANUARY - JUNE 2021

Financial performance

April - June

Net sales

Net sales for the second quarter amounted to SEK 142m (66), an increase by 115%. Adjusted for exchange rate effects, the organic growth was 139%. The increase in net sales is mainly explained by an increased demand from existing customers.

Changes in net sales

Apr-Jun

Jan-Jun

%

2021

2021

Organic growth

139

107

Change in exchange ra-

-24

-23

tes

Total

115

84

Gross profit

Gross profit increased by 114% to SEK 105m (49). The gross margin decreased by 0.4 percentage points to 73.8% (74.2). The decrease in the gross margin is mainly due to changes in the sales mix.

Operating profit (EBIT)

Operating profit increased to SEK 72m (20), corresponding to an operating margin of 50.7% (29.7). The increase in operating profit is mainly explained by increased sales during the quarter partly mitigated by higher costs related to strengthening of the organization, initiatives within marketing and forex.

Selling expenses increased to SEK 14m (11). The increase in selling expenses is mainly explained by costs related to strengthening the organization and initiatives within marketing. Administrative expenses amounted during the quarter to SEK 13m (9). The increase in administrative expenses is mainly explained by costs related to strengthening the organization. Research and development costs amounted to SEK 7m (5).

Profit for the period and earnings per share Profit before tax amounted to SEK 72m (20). Tax expenses for the quarter amounted to SEK -17m(-5), corresponding to an effective tax rate of 23.1% (22.1). Profit for the period was SEK 55m (16). Diluted earnings per share amounted to SEK 2.08 (0.61).

Cash flow

Cash flow from operating activities increased and amounted to SEK 56m (23). The increase is mainly explained by higher operating profit due to the higher sales and higher account payables, partly mitigated by an increase in account re- ceivables.

Cash flow from investing activities was SEK -3m(-2). Cash flow from financing activities was SEK -93m(-63) attributable to dividend payment of SEK -92m(-79).

January - June

Net sales

Net sales for the first six months amounted to SEK 225m (122), an increase by 84%. Adjusted for exchange rate effects, the organic growth was 107%. The increase in net sales is mainly explained by an increased demand from existing customers.

Gross profit

Gross profit increased by 86% to SEK 165m (89). The gross margin increased by 0.6 percentage points to 73.3% (72.7). The increase in the gross margin is mainly due to changes in the sales mix.

Operating profit (EBIT)

Operating profit increased to SEK 111m (36), corresponding to an operating margin of 49.5% (29.4). The increase in operating profit is mainly explained by increased sales during the first six months partly mitigated by higher costs related to strengthening of the organization, initiatives within marketing and forex.

Selling expenses increased to SEK 26m (22). The increase in selling expenses is mainly explained by initiatives within marketing and costs related to strengthening the organization. Administrative expenses amounted during the first six months to SEK 23m (18). The increase in administrative expenses is mainly explained by costs related to strengthening the organization. Research and development costs amounted to SEK 12m (9).

Profit for the period and earnings per share Profit before tax amounted to SEK 112m (36). Tax expenses for the first six months amounted to SEK -25m(-8), corresponding to an effective tax rate of 22.5% (22.6). Profit for the period was SEK 87m (28). Diluted earnings per share amounted to SEK 3.30 (1.07).

Cash flow

Cash flow from operating activities increased and amounted to SEK 125m (38). The increase is mainly explained by higher operating profit due to the higher sales and decreased operating re- ceivables.

Cash flow from investing activities was SEK -4m(-7). Cash flow from financing activities was SEK -93m attributable to dividend payment of SEK -92m. Last year amounted to SEK -11m mainly explained by paid dividend of SEK -79m, new share issue of SEK 52m and premium received from issue of warrants of SEK 18m.

4

MIPS AB (PUBL) - INTERIM REPORT JANUARY - JUNE 2021

Financial position

The group's total assets as of 30 June 2021 amounted to SEK 524m (377). Short-term investments of SEK 224m (149) are in their entirety invested in interest-bearing funds. The equity/as- sets ratio was 79% (84). Cash and cash equiva- lents, including short-term investments, as of 30 June 2021 amounted to SEK 302m (212).

Reported values for assets and liabilities are in all material aspects consistent with fair market value. In order to reduce the group's short-term currency exposure, certain currency derivatives have been entered into with a bank. The derivatives are valued at fair market value and are treated as a financial asset, amounting to SEK

2m (2) as of 30 June 2021. Hedge accounting is applied, whereby the unrealized change in the fair value of the derivatives is primarily reported in Other comprehensive income.

SEKm

Net sales, LTM

Adjusted EBIT-margin* % LTM

241

243

193

214

41%

41%

39%

171

38%

147

34%

26%

Q2

Q3

Q4

Q1

Q2

Q3

2018

2019

Investments

During the second quarter, investments amounted to SEK 3m (2). Investments in intangible fixed assets were SEK 2m (1). Investments in tangible fixed assets amounted to SEK 1m (1). During the first six months, investments amounted to SEK 4m (7). Investments in intangible assets amounted to SEK 2m (3) and investments in tangible assets amounted to SEK 2m

(4).

The Group had no significant commitments as of 30 June 2021 related to investments.

Parent company

Net sales during the first six months for the parent company amounted to SEK 163m (94). Profit for the same period was SEK 82m (25).

Employees

The average number of employees during the second quarter was 67 (53), of whom 18 (14) were employed in the Chinese subsidiary. The number of employees at the end of the period was 74 (55), of whom 21 (14) were employed in the Chinese subsidiary.

467

365

391

312

52%

279

268

49%

263

46%

41%

41%

42%

37%

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2020

2021

* For information and derivation of adjusted items please see pages 16-18

Disclaimer

MIPS AB published this content on 23 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 July 2021 07:47:03 UTC.


ę Publicnow 2021
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Financials
Sales 2021 535 M 61,8 M 61,8 M
Net income 2021 215 M 24,9 M 24,9 M
Net cash 2021 393 M 45,5 M 45,5 M
P/E ratio 2021 116x
Yield 2021 0,47%
Capitalization 24 908 M 2 875 M 2 880 M
EV / Sales 2021 45,9x
EV / Sales 2022 35,7x
Nbr of Employees 74
Free-Float 97,6%
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Mean consensus OUTPERFORM
Number of Analysts 2
Last Close Price 951,50 SEK
Average target price 990,00 SEK
Spread / Average Target 4,05%
EPS Revisions
Managers and Directors
Max Strandwitz President & Chief Executive Officer
Karin Mari Bohlin Rosenthal Chief Financial Officer
Jan Magnus Welander Chairman
Hans Peter Halldin Chief Science Officer
Shuyi Isaksson Head-Operations
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