MIPS INTERIM REPORT JAN – MAR 2019

JAN - MAR

• Net sales increased by 91% to SEK 44.9m (23.6). Adjusted for currency exchange rate effects, the increase was 71%
• Operating profit increased to SEK 11.8m (1.8)
• Operating margin increased to 26.3% (7.6)
• Cash flow from operating activities decreased to SEK 7.7m (8.4)
• Earnings per share diluted, amounted to SEK 0.38 (0.07)

CEO’S COMMENTS

THE YEAR STARTED OFF STRONG
The year started off strong, with a first quarter that showed substantial improvements in both sales and profitability. Net sales increased by 91% to SEK 44.9m (23.6). Adjusted for currency effects, we grew organically by 71% in the quarter.
All helmet categories showed a positive development led by the Snow category. Comparative figures appear more positive since last year's first quarter was a somewhat weaker quarter than the other quarters.
Most of the growth came from our existing customers, but we also saw exciting launches from new customers during the quarter.
We continue to see great interest in all our categories from new customers, while existing customers continue to broaden their product offering with MIPS solutions.
EBIT for the quarter amounted to SEK 11.8m (1.8) and we achieved an operating margin of 26.3%.
I am very pleased to see that the first quarter, which has historically been our financially weakest, now shows good profitability driven by increased sales. Again, this confirms the scalability of our business model.

CONTINUING TO BE THE LEADING TECHNOLOGY
There was a lot of turbulence in the market as our customer Bontrager launched a "new" technology under the name "WaveCel" with bold claimed test results. MIPS has carried out rigorous tests of the technology but has not been able to validate the claimed results.
We are convinced that MIPS BPS is the leading technology for protection against rotational movements in the brain.
MIPS is unique as an ingredient brand with our ability to work with all brands and implement our technology in most types of helmets in a cost effective way.
It is positive that more and more helmet brands confirm the importance of reducing the effects of harmful rotational movements, but unfortunately there is still a lack of an industry-wide standard by an independent testing body, making it more difficult for both the industry and consumers to compare different technologies.

EXCITING LAUNCHES AT TRADE SHOWS
At the world's largest winter trade show, ISPO in Munich, five customers; Head, Vola, Cebe, Protec and Flaxta launched their first snow helmets with MIPS BPS. In total, 14 new helmet models equipped with MIPS solutions were launched at the trade show.
We also saw interesting launches in the Equestrian category at a trade show in Birmingham where two customers showed their new helmets with MIPS: Champion and Charles Owen. Together with Charles Owen, MIPS received the award as the best safety product.

FIRST QUARTER A BIG LEAP TOWARDS 2020
With this strong quarter behind us and an active project portfolio, together with new and existing customers, I look forward with confidence to the coming quarters and the continued journey towards our 2020 financial targets.

JOHAN THIEL
President and CEO

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