MIPS presentation of the year-end report for 2019 13 February 2020 - - PowerPoint PPT Presentation

mips presentation of the year end report for 2019
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MIPS presentation of the year-end report for 2019 13 February 2020 - - PowerPoint PPT Presentation

MIPS presentation of the year-end report for 2019 13 February 2020 KEY HIGHLIGHTS Good growth in the fourth quarter with +41% increase of net sales. Organic growth was +33% Production volumes are getting back to normal after


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SLIDE 1

MIPS’ presentation

  • f the year-end report for 2019

13 February 2020

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SLIDE 2

KEY HIGHLIGHTS

2020

  • Good growth in the fourth quarter with +41% increase of net sales. Organic growth was +33%
  • Production volumes are getting back to “normal” after trade tariff slowdown in the third quarter
  • Strong expansion in terms of models and brands during the year
  • Higher trust in the MIPS brand leading to more all-in MIPS commitments from brands
  • Key recruitments now completed within Marketing and Sales
  • Adjusted EBIT margin 41.2% for the year of 2019, above our long-term ambition
  • Proposed dividend of SEK 3.00 per share, 89% of net earnings, well above ambition of 50%
  • Good momentum in the quarter and strong platform for continued growth

2

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SLIDE 3

MIPS CONTINUES TO EXPAND ITS CUSTOMER BASE

3

  • In 2019, we have delivered MIPS BPS to 103 brands all over

the world, and all our top 10 customers grew with MIPS in 2019

  • We grew in all categories and all geographies
  • In 2019, we have delivered MIPS BPS to 583 different helmet

models

  • During 2019, we delivered 5.0m MIPS BPS units and 14.2m

since inception

  • We continue to have a high inflow of new projects and a

strong pipeline of new helmet models equipped with MIPS BPS

103 active brands (2019) 583 models (2019)

4 8 8 15 28 45 60 78 103 2011 2012 2013 2014 2015 2016 2017 2018 2019 15 23 30 66 121 212 302 448 583 2011 2012 2013 2014 2015 2016 2017 2018 2019 14 43 67 279 1 046 1 671 2 320 3 812 4 973 2011 2012 2013 2014 2015 2016 2017 2018 2019

5.0m units sold (2019)

Thousands

2020

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SLIDE 4

THE TRUST IN THE MIPS BRAND HAS INCREASED

  • The multisport brand Bollé and the lifestyle brand Nutcase have

communicated that they will offer MIPS BPS in all their helmet models

  • Both brands will convert their whole range, conversion projects already

started

  • Bollé is the first brand to offer MIPS BPS in all helmets both within snow

and bike

  • Nutcase is the first lifestyle brand committing to have MIPS BPS in all their

helmets

4 2020

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SLIDE 5

UPDATE REGARDING THE CORONA VIRUS

  • Both the main part of MIPS’ production and the helmet manufacturers are located in China
  • The helmet manufacturing sites are mainly located in the Guandong area (outside

Hongkong), over 1,000km from the Hubei area (Wuhan)

  • Factories have resumed production after the Chinese holiday but still with low capacity.

Will ramp up during the coming weeks provided no virus on site

  • As factories are just starting up the production, it is currently difficult to

foresee all effects from the virus outbreak

  • We are following the outbreak closely on a day-to-day basis

5 2020

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SLIDE 6

3 14 13 20 10 24 21 32 21 37 27 41 24 56 51 62 45 83 53 88 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019

Net Sales development (SEKm) and quarterly growth rates*

274% 70% 69%

55% 105% 55% 29% 29% 12% 52% 88% 53% 91% 49% 3% 41%

NET SALES DEVELOPMENT IN FOURTH QUARTER

  • Good performance with 41% growth in the quarter,

an organic growth of 33%

  • Growth mainly driven by existing customer base

expanding their assortment with MIPS

  • Growth in all our categories
  • Net sales growth of 39% year to date,
  • rganic growth of 29%

*No u underly lyin ing growt wth r rates a availa ilable le for 2 2015 15

6

Cha hang nges i in ne n net s sales % % 2019 19 2019 19 Oct-De Dec Jan an-Dec Organic growth 33% 29% Changes in exchange rates 8% 9% Structural changes 0% 1% Total al 41% 41% 39% 9%

2020

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SLIDE 7

DEVELOPMENT IN FOURTH QUARTER

  • Net Sales increased 41%, organic growth was 33%
  • Gross profit up 41%, gross margin flat, adjusting for acquisitions gross

margin up 90 bps to 75.8%

  • OPEX – continue to invest in strategic priorities
  • Negative impact under other operating income and expenses mainly from

currency derivatives and weakening of the USD with SEK 4.3m (1.8)

  • Adjusted EBIT was SEK 39.7m (28.7), adjusted EBIT margin 45.4% (46.1)
  • Cash flow – operating cash flow of SEK 19.7m (23.8)

7 2020

33%

Organic growth Adjusted EBIT margin Operating cash flow

(SEKm)

45.4% 19.7

MIPS Group (SEKm) Q4 19 Q4 18 %

Net sales 87.5 62.2 41 Gross profit 65.5 46.6 41 Gross margin % 74.9 74.9

  • Operating profit (EBIT)

39.0 28.7 36 Operating margin (EBIT) % 44.6 46.1

  • Adjusted Operating profit (EBIT)

39.7 28.7 38 Adjusted Operating margin (EBIT) % 45.4 46.1

  • Cash flow from operating activities

19.7 23.8

  • 17
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SLIDE 8

FULL YEAR 2019

  • Net Sales increased 39%, organic growth was 29%
  • Gross profit up 40%, gross margin +20 bps, adjusting for acquisitions

gross margin up 140 bps to 75.3%

  • OPEX – continue to invest behind strategic priorities
  • Negative impact under other operating income and expenses mainly

from currency derivatives of SEK 9.8m (3.4)

  • Adjusted EBIT was SEK 110.5m (73.0), adjusted EBIT margin 41.2%

(37.9)

  • Cash flow – operating cash flow of SEK 63.2m (69.1)

8 2020

29%

Organic growth Adjusted EBIT margin Operating cash flow

(SEKm)

41.2% 63.2

MIPS Group (SEKm) YTD 19 YTD 18 %

Net sales 267.9 192.5 39 Gross profit 198.4 142.2 40 Gross margin % 74.1 73.9

  • Operating profit (EBIT)

108.0 73.0 48 Operating margin (EBIT) % 40.3 37.9

  • Adjusted Operating profit (EBIT)

110.5 73.0 51 Adjusted Operating margin (EBIT) % 41.2 37.9

  • Cash flow from operating activities

63.2 69.1

  • 8
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SLIDE 9
  • 4.1

1.5 1.6 3.8

  • 3.3

7.4 6.4 13.7 1.6 11.5 0.1 14.6 1.8 21.720.8 28.7 11.8 38.0 20.9 39.7

11.2% 12.7% 18.9%

  • 31.8%

31.2% 30.3% 43.5% 7.4% 31.5% 0.3% 36.0% 7.6% 39.0% 40.7% 46.1% 26.3% 46.0% 39.5% 45.4%

  • 7.0
  • 2.0

3.0 8.0 13.0 18.0 23.0 28.0 33.0 38.0 43.0

  • 50.0%
  • 30.0%
  • 10.0%

10.0% 30.0% 50.0% 70.0% 90.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019

ADJUSTED EBIT AND ADJUSTED EBIT MARGIN DEVELOPMENT IN FOURTH QUARTER AND FULLYEAR

  • EBIT increased with SEK 10.3m to SEK 39.0m (28.7)
  • Adjusted EBIT increased with SEK 11.0m

to SEK 39.7m (28.7). Adjusted EBIT margin was 45.4% (46.1)

  • Increase in Adjusted EBIT mainly explained by higher

sales partly offset by investments in organization, negative effect from currency derivatives/fx and increase spend in marketing

  • Adjusted EBIT for the year increased by SEK 37.5m

to SEK 110.5m (73.0) from higher sales partly offset by investments in organization and negative effect from currency derivatives

  • Adjusted EBIT margin 41.2% (37.9)

Adjusted EBIT (SEKm) and adjusted EBIT margin development

  • 149.6%

9 2020

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SLIDE 10

BALANCE SHEET AND CASH FLOW

  • Cash flow from operating activities in the quarter

SEK 19.7m (23.8), full year SEK 63.2m (69.1)

  • Cash and Cash Equivalents at SEK 191.6m (242.5)
  • Dividend of 3.00 SEK (2.50) being proposed
  • Equity ratio 87% (86)
  • 3.4 -1.6

7.4 0.7 3.1

  • 8.8

11.89.8 3.9 0.0 6.3 0.9 8.4 5.9 31.0 23.8 7.7 24.2 11.6 19.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019

Cash flow from operating activities (SEKm)

Q2 10

Key balance sheet items and cash flow

2020

MIPS Group (SEKm) FY 19 FY 18

Total Assets 342.6 319.4 Equity 297.9 275.6 Equity ratio % 87 86 Cash & Equivalents 191.6 242.5

MIPS Group (SEKm) FY 19 FY 18

Cash flow from operating activities 63.2 69.1

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SLIDE 11

SUMMARY

*Adjusted for costs in connection with the company's IPO during 2016 and 2017 and costs relating to acquisitions during 2019. Adjusted EBIT margin includes legal costs relating to company’s litigation processes.

  • Good performance in the fourth quarter ends a very

successful year

  • Significant increase in models and brands
  • More trust in MIPS brand and more 100%

commitments

  • No major impact from Corona virus yet, will have

phasing effects, however difficult to predict full

  • utcome
  • Organization in place to deliver on strategic

initiatives

  • Good position to deliver according to the 2025 plan

11

57 57 67 67 75 75 87 87 97 97 110 110 117 117 126 26 128 28 147 47 171 71 193 93 21 214 24 241 24 243 268 68

7% 7% 14% 4% 19% 9% 28% 8% 30% 0% 30% 0% 23% 3% 22% 22% 22% 22% 26% 26% 34% 4% 38% 8% 39 39% 41 41% 41 41% 41 41%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50 100 150 200 250 300

Q1 16 1 16 Q2 Q2 1 16Q3 16 16Q4 1 4 16 Q1 17 1 17 Q2 Q2 1 17 Q3 17 17 Q4 1 4 17 Q1 18 1 18 Q2 Q2 1 18Q3 18 18Q4 1 4 18 Q1 19 1 19 Q2 Q2 1 19Q3 19 19Q4 1 4 19

Net s sales a and a d adjuste ted E d EBIT-mar argin 1 n 12 m mont nths hs r rolling ng Net Sales SEKm Adjusted EBIT-margin*

2020

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SLIDE 12

Q&A

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SLIDE 13

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 presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. Statements in this presentation, which are not historical facts, such as expectations, anticipations, beliefs and estimates, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. This presentation may contain various forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Company’s control and may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. These risks include but are not limited to the Company’s ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brand, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

13 2020