Good day, and thank you for standing by. Welcome to the Mips Interim Report Q1 2026 Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Alternatively, you may submit your questions via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Max Strandwitz, CEO. Please go ahead.
Thank you operator, and good morning, everyone. My name is Max Strandwitz, and I am the CEO of Mips. With me today, we also have our CFO, Karin Rosenthal, and we will take you through the interim report of the first quarter. If we look at the key highlights of the quarter, Q1, it was a strong start of the year. 30% growth in the first quarter if we adjust for acquisition and impact of Forex. We did deliver an organic growth of 25%. We did see growth in all our three categories and all of the key regions. We did acquire the Koroyd business in December last year, and that has been well-received in the market with a lot of interest for their products. The sales development at Mips has a very scalable business model.
With the strong growth that we see, we also had a good improvement of the profitability. If we look at our Adjusted EBIT in the quarter, even though historically Q1 is the smallest quarter of the year, it's one of the best Q1s that we ever had, and we actually managed to deliver a 33% Adjusted EBIT margin in the quarter, which also means that our EBIT increased with 50% versus prior year. We continue to see some impact by legal costs, so we did spend SEK 7 million on the legal case and the legal dispute that we have in the U.S. Of course, we also see a negative impact from Forex headwind in the quarter, which of course also impact the profitability.
We are happy to see that our positive momentum that we see on the market is implemented and impacted by the overall implementation of our strategic initiatives, and of course, especially the actions on product development and marketing. Really good to see that all the actions that we have there has a really positive effect on our overall market performance. In sports, we saw good development, good quarter with 24% net sales growth. Adjusting for acquisition in Forex, the organic growth was 28%. We continue to see good performance in the European market. Of course, we saw also positive development in the challenging US market, which is, of course, good to see. We continue to see very strong performance in bike and actually managed to deliver volume growth in the 10th quarter in a row, which is quite a good streak, of course.
Strong season in the snow subcategory, driven by a favorable European market. We did actually see strong sales also in the snow category in North American market despite poor weather conditions, especially in the western part of the U.S. Of course, we all hear and heard that the snow and winter season in the US market was not fantastic. Good to see that we could deliver growth also under those market conditions. We do see good interest in both Mips and Koroyd, and the long-term positive outlook that we have in the sports category remains. If we then go over to moto, we see continued growth in moto. Good performance with 33% growth in the quarter, adjusting for acquisition and Forex. Organic net sales grew with 16% in the quarter.
Motocross remains the key driver, but it's also encouraging to see that a lot of the hard work that we have done on the on-road subcategory is starting to pay off, with a lot more brands launching in this category. Of course, we continue to roll out new innovations in moto, and of course, looking forward to quite an exciting 2026. Also here, no change to the long-term outlook. Good opportunity to continue to grow also in this category. If we look at safety, of course, inclusion of Koroyd makes our relevance in this category even bigger. We saw an increased momentum in safety after a challenging period related to tariff uncertainty in the U.S.
Net sales growth was 135% in the quarter, and adjusting for acquisitions and Forex, organic growth was 6% in the quarter. A substantial reinforcement of the category achieved through the integration of Koroyd, and of course, being able to offer also a lot more product. We do see good interest both from new and current customers in both Mips and Koroyd's portfolio, which now also includes body protection gloves and footwear, which gives us, of course, a lot of opportunities to continue to grow in the category. We remain as excited about the opportunities in the category. No change to the long-term outlook and good opportunity to continue to grow in the category. If we look at the development in our different categories, sports, we did see 24% growth. Organic growth was 28%. Good to see good performance across the geographies.
Europe continues to be the powerhouse of our growth, but we also see that despite challenging conditions, we actually perform really well in the US market. Moto, we did see 33% growth. Organic growth was 16% in the quarter. Still very strong position in motocross, but also good that the important on-road subcategory is starting to accelerate. In safety, 135% growth. Organic growth was 6%, which is, of course, a little bit slower than we expect. Of course, we expect that to pick up through the year. With that, I hand over to Karin.
Good morning. I'm Karin Rosenthal, CFO of Mips, and I will take you through the financial part of the presentation. We saw good development in the first quarter with an increase in net sales of 30%. Koroyd added 18% sales growth in the quarter, and adjusting for that and the negative Forex effect of 13% due to a stronger SEK versus US dollar, net sales increased 25% organically. Gross profit increased with 29%, with a gross margin of 71.1% versus 72.1% last year. We saw a good underlying improvement in profitability and Adjusted EBIT, which is adjusted for the legal cost, increased by 50%, with an Adjusted EBIT margin of 33.2% versus 28.8% last year. OpEx was impacted by legal cost of SEK 7 million in the quarter and SEK 9 million in the quarter last year, which was adjusted.
Operating cash flow amounted to SEK 18 million and was impacted by higher customer receivables, driven by a later invoicing due to the Chinese New Year. If we look at our financial KPIs, 25% organic growth, 33% Adjusted EBIT margin, and SEK 18 million in operating cash flow. If we then turn to next page and look at the balance sheet and cash flow, we have a cash and cash equivalent of SEK 180 million in the quarter versus SEK 214 million end of last year. We have done an amortization of SEK 50 million. As you already know, we made an acquisition last year and we have a revolving credit facility, and that is now amounting to SEK 250 million. Net debt versus Adjusted EBITDA for the last 12 months amounted to 0.3 x. That's well below our covenants of 2.0x
The board proposes a dividend of SEK 2.5 per share, and that corresponds to 55% of the group's net earnings for 2025. I hand over to you.
If we then summarize the quarter, good development in the quarter with 30% net sales growth, organic net sales growth adjusted for acquisition and Forex was 25%. We did grow in all the three categories despite challenging conditions. We continue to see strong performance in Europe, but also the North American market continues to develop well. Asian market has actually stabilized, and as you remember, that has been quite soft performance in Asia, especially related to the Chinese consumer market, and we start to see that that has stabilized. Actually, if we look at this quarter, the organic growth for the Asian market was up a little bit, only 6%, but 6% is still, of course, better than decline that we have seen before in the Asian market. Good to see that that market seems to be also coming back. The integration of Koroyd is working well.
Good interest from current and new customers for the acquired portfolio. Good underlying improvement in profitability despite Q1 being the smallest quarter of the year. Profitability partly offset by legal cost, of course, and unfavorable Forex headwind. We will continue to support our customer in the defense of the legal dispute that we flagged before. At a similar rate as we did in 2025. We remain positive on our long-term outlook and, of course, the delivery of our financial targets. With that, I open up for questions.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please type it into the box and click submit. Our first question for today, just one moment, comes from the line of Emanuel Jansson from Danske Bank. Please go ahead.
Good morning, Max and Karin. Hope you can hear me. A couple of questions from my side. I think starting off with the market and the market demands, I think in the Q4 report, you mentioned that, for the first time in several quarters, you saw some volume growth in the US market of a couple of percent. Can you perhaps give us some more colors on what you have seen during Q1?
Yeah. Of course, the Q1 market data is not announced until, I think, 26th of April. Still a couple of days before we see that, but of course, we still see the market indications and so on. We start to see a little bit of potential market growth, but still very much in line with the flattish market. If we see growth, it will probably be low single-digit number. What we have seen and also been surprised if we take, for instance, the Q4 data is, of course, that the Mips penetration continues to do very well on the market. Of course, that drives our increase in demand despite the market being flattish. If you take Q4, for instance, there were 25 new helmets launched on the addressable market, and 20 of those had Mips.
Really sharp increase of the penetration also on the bicycle market, and of course, that's what drives our growth. Long answer to your question, market will probably remain flattish or low single-digit growth at best. Of course, our growth is much driven by the increase of penetration of our customers' portfolio.
Perfect. You continue to see quite low inventory levels, both at OEMs and the retailers, right?
Yes, that's correct.
Okay, good. Heading into the second quarter of this year, with the inventory de-stocking behind us and probably also lower Forex headwind going into the second quarter, is it fair to expect that revenue and earnings growth will continue to accelerate from here, giving all else being equal, of course?
Yeah. When we look at Q1 performance, we had actually 33% volume growth, so organic volume growth, of course. Organic growth was 25%, so there was a bit of price mix effect. We did see very strong performance in bike, where the average price is a little bit lower. I would say that for the full year, like we said, we expect to deliver in line with our long-term ambition, which means that we need to grow with a little bit more than 30% organic per year, and there is no reason why we shouldn't be able to do that also in 2026. We see good development on the market. Of course, we are facing in Q2 a little bit softer comparator, but long-term ambition, 30%+.
Perfect. Jumping then to safety, as you mentioned, 6% organic growth in this quarter. You're also mentioning the expectation for significantly higher growth ahead. What do you think will drive this organic acceleration, and when should we expect it to kick in?
Yeah. If you take the 6% growth, I think a lot of companies would be happy with that. Of course, it's a little bit shy of the ambition we have. We have bigger expectations than that. We also have launched a very strong portfolio, especially for the US market and especially related to full brim helmets. We expect to start to see those picking up already coming quarter and of course, Q3 and Q4 also during the year.
What do you think is a fair target to assume for 2026 in terms of sales?
Yeah. At least substantially more than 6%. Last year we grew 43% and our overall communication is that we expect to grow a little bit faster than that in safety for the Mips-related portfolio in 2026.
Fair enough. What kind of growth did you see within safety for Koroyd in this quarter? Is that possible to give us that number?
Yeah. We haven't disclosed that because, of course, a smaller company, and also when you acquire a company, you don't audit per quarter, and that's why we didn't divide the growth per quarter. We said, of course, that we have an ambition to grow the business for the full year in line and above what we have seen so far, which has been 15%, and we stick to that guidance. We will not report per quarter because, of course, like I said, smaller companies doesn't sometimes report per quarter. Of course, if we haven't audited the quarter numbers, it's difficult to refer to them. I can only talk about the full year guidance, but we see good development also in that part of the portfolio.
Okay, great. Just one last question regarding Koroyd then. I think we know that they have a dilutive effect on your gross margin. Is it fair to assume also on the EBIT margin in this quarter, that is some dilutive effect for your EBIT margin from the acquisition of Koroyd?
Yeah. I think most companies in our industry, of course, Q1 is historically a very, very small quarter. The ones that have been with us in Mips, we were really surprised if we actually had a profit in the Q1 because of Chinese New Year and the factory closed and so on. Having an EBIT margin like we saw with the Mips group is, of course, not normal for any business. Yes, it had a negative impact in the quarter.
Thank you very much, Max and Karin. That was all for me for now. Thank you very much.
Thank you, Emanuel.
Thank you. We will now move to our next question. Our next question comes from the line of Adela Dashian from Jefferies. Please go ahead.
Thank you. Good morning, Max and Karin. My first question relates to the legal costs, which were slightly lower this quarter versus the guidance that we received late last year. Would you say that this is it due to increased visibility or is this purely just timing and phasing related, and your full-year guidance still holds?
Yeah, it's more timing and phasing related. Of course, we are extremely careful on how we spend money. That also is, of course, when it comes to legal cost and so on, we will not spend a penny more than we need, but you will have swings between quarters. We said a similar amount to last year in legal cost, and that still stands. We said that around SEK 10 million per quarter is reasonable to assume, and there will probably, in one or two quarters, be maybe SEK 1-2 million more, and sometimes it's SEK 1-2 million less. No big drama around that.
Okay, thanks for that clarification. Then if we think about your normal selling pattern, especially for bike helmets and the fact that you produce them in H2 for sell through in H1. Historically, I guess, has there been any pattern of repeat orders during the season? What's been the weight of that if you're able to quantify? Because I'm just thinking if some of these retailers are starting off the season with lower than normal or maybe normal inventory levels, then let's say it does progress better and you are increasing your share then, could there be a positive potential surprise during the peak season?
Yeah. Historically, you're right. You see that customers produce a majority of the goods that they need for the coming season in normally Q3 and Q4, with, of course, a majority in Q4. That has changed a little bit, and also, of course, as the Chinese New Year came quite late this year, you also saw production spilling into Q1 and so on. You also see that cash is, of course, a lot more expensive, so people optimize their balance sheet in a very different way than they have done before. They try to really produce as close to the season as possible. Historically, 70%, potentially 80% of the portfolio and the assortment is secured before you enter into the new year. Then you have that for, of course, for the spring launch when the season normally start.
Then depending if you sell well or not, you have repeat orders with the factories and so on. Of course, you can't wait too long with those because, of course, they need to hit the market before the season is over. Yes, good season could probably mean that we get more repeat orders. That could have an effect, of course.
Thank you, Max. On Koroyd, I'm sorry if I missed, but I do remember you saying that you expect to have launched joint products towards the end of this year. Is that still on track?
Yeah. We already have launched a joint product because, of course, we are in the same helmets. But of course, we are also doing joint integration where you have already prepared Mips and Koroyd integration. Yes, they will hit the market within a year. That's right.
Lastly, if I may.
Do you know if your customers are at all exposed to the change in Section 232, or does that mainly apply to industrial companies that sell metal-related content?
No, sorry, I don't have a perfect view on Section 232. If that's important, of course, I can come back to that, but it's not something that we have been highlighted of, or it has not been flagged as an issue.
Perfect. Thank you, Max.
Thank you.
Thank you. We will now take our next question. This question comes from the line of Alexander Siljeström from Pareto Securities. Please go ahead.
Good morning, guys, and congrats on a strong report. A couple of follow-ups from my side, just starting off with Koroyd. I appreciate that it's their seasonally smallest quarter, but could you share the EBIT margin for Koroyd here in Q1 approximately? Was it break even or a bit positive? Yeah, starting off there.
Yeah. In the quarter it was basically flat, so zero profit. What we got, of course, is the net sales but no profit contribution. As usual, they have a very scalable business model, but at that level, they don't make any profit in the first quarter, which is normal for them.
Yeah. I guess you're still sort of confident in the 45% EBITA margin on a full year basis, right?
Yeah, we are still confident that it is a very profitable business. Of course, nothing has changed in terms of that. Similar to Mips with ingredient brand, with growth normally comes the profitability.
Yeah, got you. That's very clear. Maybe just on sort of the strong sports performance, would you mind breaking out the growth in snow helmets here in the quarter?
Yeah. We saw a growth in snow of a bit more than 20% in the quarter, which is, of course, a little bit stronger in the European market and a little bit softer in the North American market, but good growth overall.
Thanks. Maybe just the last one from my side, quite encouraging growth in Moto as well, and you mentioned that on-road is picking up a bit as well. Just wondering if you could shed some light into the growth in on-road as that has been, as I think at least, slow for a period.
When it comes to on-road, of course, the category has gone through a lot of regulatory changes which have created a lot of confusion in the industry. What do you actually need, what kind of rotational protection do you need, and so on. Originally, we thought that was actually quite beneficial for us because, of course, rotation is what Mips has been doing. Now, when brands and helmet manufacturers understand what the future standard requirement is, of course, we have a lot of interest for rotation, so we see a lot of those customers coming to us. We also see that the new competition standard under FIM O2, so the really high-performing helmets when it comes to MotoGP and so on, there is a very strong requirement.
There, actually, the rotational threshold is quite high, and the overall performance of the helmet is also required to be very high. That, of course, helps us with the discussion with a lot of the brands, and of course, that's really driving the interest. We also realized that a lot of our innovation, of course, we like generic innovation sometimes because it's very easy, it's plug and play, and you can use it in most products. Moto, especially on-road, is a little bit particular animal, where you really need to have specific innovations for the category. That's something that we have launched, and we have come out with a couple of different, where you can keep your same padding or we develop the padding for you, which is, of course, something that has been highly appreciated by a lot of the brands.
A lot of the brand DNAs is, of course, in the fit. If you take really strong players on the market, a lot of their customers buy a certain type of helmet because they want to have a certain type of fit, and so on. Of course, we need to be able to accommodate that. That's really where Mips, as a company, has become a lot more consumer-centric and also did a step change. Of course, we see the benefit of that change in terms of growth and the interest of the category.
Cool. That sounds promising. That's it from my side. Many thanks for taking my question.
Thank you, Alexander.
Thank you. We will now move to our next question. This question comes from the line of Carl Deijenberg from DNB Carnegie. Please go ahead.
Thank you very much. Good morning. Yeah, I'll start with a general question. I read what you said in the report around limited impact from what's happening in the Middle East and so forth, but I was just curious on pricing in the overall market for, let's say, entire helmets and maybe adjacent products, given how o il prices have moved and in turn, plastic prices as well. Is that something you are starting to see materialize?
Not yet. If you look at last year, it is quite a big history of price increases, of course, relating to tariff implementation in the U.S. You're already seeing inflated prices in the helmet industry related to that. When it comes to what will come going forward, we haven't seen a lot yet. Of course, the partners that we work with and our suppliers, they have said that if we see that the conflict in the Middle East will last for a longer period of time, then of course our industry, like any other industry, will be impacted. We will be faced by cost increases and, of course, then we need to do price increases in the market. So far that has not had an effect.
I think depending on what would happen, I would say coming weeks and months, that, of course, could change the situation. Of course, when it comes to input costs, those are mainly related to plastic. It's more in that space, where we could see some cost increases. If that happens, we will of course then need to do price increases as we always do.
Yeah.
Nothing yet.
Yeah. No, the reason for asking, and I was a little bit late into the call, so apologies if this question was already asked, but, my second question on the topic is if you have sensed any pre-buys in any of your categories or adjacent categories in anticipation of future price hikes, or have you just seen a normal monthly seasonal set up for you here in Q1 and maybe going into Q2 as well?
Yeah, no, we haven't seen any pre-buys and especially no price increases normally have been flagged. Normally when we do price increases, of course, there is normally a window, so then at least you will probably say within three months something going to happen. Then, of course, if you see any pre-buying effect, it will be under that window. I don't think anyone will buy because of speculation. Of course, we are an ingredient brand. Of course, as an ingredient brand, you will be part of a bigger product, which is the helmet, and if they start to be worried about that, then you could see an effect. Nothing we have seen or heard about so far.
Yeah. Good. I also just wanted to ask, I note that you report an Adjusted EBIT number, where you adjust for the legal fees. I think this is the first time, where you've had the four previous quarters have been affected by the same or similar item, which you haven't adjusted for. Very simple question. Is there any specific reason behind the adjustment that you're starting to adjust for it now? Do you see it approaching the end here?
No.
Faster, or?
For us, of course, it's always to be very transparent to investors. Of course, when it comes to legal costs, we saw during last year we had a discussion should we adjust for it or not? Of course, we waited a bit for that. When we go into a new year, we saw that this will continue at least during 2026 based on what we know now. Of course we felt that that was the right time when we started a new year to do an adjustment. That's why you see an adjustment also backwards. Also 2025 has been adjusted of course to have a fair comparison. We have gotten a lot of feedback of course from a lot of investors that it's sometimes difficult to track what is really the results of the underlying business and that's what we want to show.
Okay, very well. Just maybe finally on the same topic, is it possible to share any further details how that is progressing since we spoke last time?
No, we are still preparing for court of course. In all kind of cases there is always discussions back and forth, but at the moment, of course, we are preparing for court like we say, and that's why we spend a good amount per quarter to really make sure that we are preparing in the best possible way. No change to the overall communication.
Okay. I think that was all from me, so thank you very much.
Thank you, Carl.
Thank you. There are no more phone questions at this time. I will now hand the call back to management for web questions.
Yeah, I got one question around are you able to provide some color of the nature of revenues when it comes to project? Of course everyone saw that project revenues increased. That's relating both to Mips and of course Koroyd as we saw increased amount of projects going and so on. The key driver of that is Mips. It's really that we see a big interest to do more helmets of course and then with that also increases the project revenues. When do you expect the existing IP legal costs with your customer to end? If we go to court then that would be in 2027. Of course then we will probably see some change to the spending but it all depends on how long the case will carry on. Someone asked if the 30% growth that we were talking about was excluding Koroyd.
When we talk about growth, I think the fair metric to talk about is organic growth. Yes, it's excluding Koroyd, and 30% is the organic growth number that we expect to see. 30% is organic, not adding the inorganic number on top of that, of course. We got the question, there is some evidence to suggest a positive relationship between increased cycling and higher energy cost in some markets. Yeah, we hear a little bit about that. You also see fantastic sales when it comes to e-bike in Europe. You see a very positive trend. You saw that last year, they sold more than 5 million e-bikes in Europe. Of course, when people are buying when riding an e-bike, they also have a big tendency of wearing helmets. Of course, we see a very positive effect of that.
The whole e-mobility trend that is happening, of course, that's one of the key drivers that you see in the European market. So far, the U.S. has still not shown the same trend, and of course, you see much less commuting and, of course, a very different infrastructure. You do see positive effect coming out of that. Other than that, I think we have covered most of the topics and so on. Of course, thank you all for listening in, and speak to you again next quarter.