Slide 1: MIPS Q4 2018
MIPS Q4 2018 14 February, 2019
Slide 2: Q4 Highlights
Q4 Highlights • Net sales growth at +53% in the quarter, +44% organic growth adjusted for currency effects • The good momentum continues especially in Bike and Moto, mainly with existing customers • EBIT margin 46.1% • Specialized announced in November 2018 that they will offer MIPS in all their dif
Slide 3: Continue to expand model and customer base
Continue to expand model and customer base 78 • Delivered to 78 Brands all over the world 78 45 60 active • We delivered to 448 different helmet models brands 4 8 8 15 28 equipped with MIPS BPS 2011 2012 2013 2014 2015 2016 2017 2018 • During 2018 we delivered 3.8m units, 448 9.2m since 2011 448 212
Slide 4: 78 brands in 2018
78 brands in 2018 GNEAL ORBEA Oxman iS) SENA ate TRE Tribe Bice x everest qaD MOOSE RROING. TSG PRO-TEC |STIGR. (nh | © Cyel Tec SGIANT VGIRO GHOST comes Luo @® & occano OAKLEY —=_@ © #8 ase : 2a GH Pron
Slide 5: Specialized launches MIPS in all their models
Specialized launches MIPS in all their models • In November, Specialized announced that they are introducing MIPS in all their models • Specialized is an existing Customer • They are offering four different MIPS solutions to enable products at different price points • Good example of how the penetra
Slide 6: Virginia Tech extends test report to 50 helmets
Virginia Tech extends test report to 50 helmets • In December, Virginia Tech released an updated test report now covering 50 helmets vs. previous 20 • University of Virgina Tech have introduced tangential forces in their test methods • The first 13 places in the ranking are held by MIPS equipped hel
Slide 7: Continued investment in patent portfolio
Continued investment in patent portfolio We have continued to invest in R&D activities and our patent portfolio has expanded to: • 29 patent families (18) • 139 granted/allowed patents (72) • 76 pending applications (71) • We are not party in any legal disputes at the moment Granted Application stag
Slide 8: MIPS financial targets
MIPS financial targets >SEK 400m >40% net sales EBIT margin 2020 2020 8
Slide 9: Q4 Net Sales development
Q4 Net Sales development • Strong growth in the quarter +53%, Net Sales development (SEKm) and quarterly growth rates* organic growth +44% • Good performance mainly in the Bike and Moto category. 52% 53% 62 88% • Growth primarily through existing customers 56 51 29% 55% 55% 41 37 29% 70% 32 12% 69%
Slide 10: Q4 development
Q4 development 44% • Net Sales increased +53%, currency adjusted +44% • Gross profit up 53%, gross margin down with -0.3 p/p Organic growth • Lower OPEX, mainly from litigation costs in prior year • EBIT SEK +28.7m, 46.1% EBIT margin • Cash – strong operating cash flow of SEK 23.8m (0.9) 46.1% MIPS
Slide 11: Full year development
Full year development 50% • Net Sales increased +53%, currency adjusted +50% • Gross profit up 52%, gross margin down with -0.4 p/p Organic growth • Adjusted EBIT SEK +73.0m, 37.9% adjusted EBIT margin. No adjustment of EBIT in 2018 • Cash – Strong operating cash flow of SEK 69.1m (11.1) 37.9% • Goo
Slide 12: Q4 Gross profit and margin development
Q4 Gross profit and margin development • Gross profit up 53% to SEK 46.6m Gross profit (SEKm) and gross margin development • Gross margin down -0.3 p/p vs. Q4 2017 to 74.9% 80.0% 40.9 46.6 40.0 75.3% 75.2% 37.4 37.4 75.8% 73.6% • 74.9% Different sales mix key reason for the lower 74.2% 70.0% 70.6% 7
Slide 13: Q4 EBIT development
Q4 EBIT development • EBIT increased with SEK 14.1m Adjusted EBIT (SEKm) and adjusted EBIT-margin development to SEK 28.7m (14.6) • EBIT margin 46.1% 90.0% 28.7 35.0 30.0 70.0% • 25.0 Increase is mainly explained by higher sales, 50.0% 43.5% 21.7 20.8 46.1% 20.0 litigation costs in prior year compar
Slide 14: Balance sheet and cash flow
Balance sheet and cash flow • Tax losses carried forward now fully consumed • Strong improvement in operating cash flow mainly from improvement in EBIT • Cash and Cash Equivalents at SEK 242.5m, Cash flow after operating activities (SEKm) Equity ratio 86% 31.0 23.8 Key balance sheet items and cash f
Slide 15: Dividend proposal
Dividend proposal • The positive development during the year enables the Board of Directors for the first time in MIPS history to propose a dividend to it’s shareholders • Proposed dividend is 2.50 SEK per share • Total dividend amount is SEK 63.2m • Proposal equals 112% of earnings per share in 201
Slide 16: Summary
Summary • Organic growth at +44% with an EBIT margin of 46.1% for the quarter Ne t sa les a nd a djusted EBIT-margin 1 2 months rolling 200 50% • Full year organic growth of 50% with an EBIT 180 160 171 19 3 38% 45% 40% margin of 37.9% 3 4% 140 14 7 35% 3 0% 3 0% 28 % 26% 120 126 128 30% 117 • Propo
Slide 17: Disclaimer
Disclaimer Important message from MIPS AB ▪ This presentation has been prepared by MIPS AB (publ) (the “Company”) solely for use at this presentation and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. The presenta