Swedish helmet technology provider Mips said it saw another strong quarter in Q3 with “good growth” in all categories, but was particularly pleased with the growth in its Safety category and the overall organic sales growth of 69 percent compared with the prior-year Q3 period. Mips said the growth is mainly being driven by the Sports category, which is its largest category in terms of sales.
“In the Sports and Motorcycle categories, we are seeing that the more normal inventory levels at retailers and at helmet brands mean that they have started to order products from us again rather than taking products from their own stocks,” offered Max Strandwitz, president and CEO, in his Q3 letter to investors. “At the same time, Mips continues to win new customers and grow the number of helmet models at existing customers, and the rate of new projects is still at an all-time high. We are now seeing the effect of the fast rate of implementation of Mips’ technology in new helmets being reflected in sales. The decrease in revenue from services this quarter is entirely attributable to the prior year’s revenues from tools development for specific projects, and is not due to a reduction in the number of projects started.”
Sales Summary
Consolidated net sales increased 61 percent to SEK 123 million in the third quarter, compared to SEK 77 million in the prior-year third quarter, with organic growth amounting to 69 percent during the quarter.
Helmet Category | Sports
The company said it continued strong progress in all sub-categories.
“We achieved growth of 61 percent in the Sports helmet category this quarter, and for the fourth quarter in a row we delivered growth in the bike sub-category, our largest sub-category,” Strandwitz detailed.
He said global inventory levels are now at a healthier level than in the very unstable years during and just after the pandemic. “However, many retailers are still trying to come to terms with an unfavorable product mix in the Bike category as a whole, but the situation is now far better than during the last two years,” he added.
“According to current market data for North America, the growth in volumes has been better than the growth in sales, which indicates that there is still high pressure on clearance sales on bikes in this important market for Mips,” Strandwitz acknowledged.
Strandwitz said the Eurobike trade fair took place during the quarter and visitor numbers were said to be high, with a continued great level of interest in Mips.
“The trade fair reinforced our sense that the sector is starting to feel more positive after a challenging period of high inventory levels and reduced sales,” he shared. “These high levels of inventory have meant that many helmet brands have not launched as many products as usual. It will therefore be interesting to see how all the new helmet models are received as they are launched during the upcoming season.”
Helmet Category | Motorcycle
Mips saw strong strong growth in the quarter in the category.
“In the Motorcycle helmet category we delivered sales growth of 55 percent for the quarter, and we are happy to see our growth taking off again in this category too,” Strandwitz said. “As in the Sports category, growth was primarily driven by customers buying from us again rather than focusing on reducing their inventories, coupled with market launches of new helmet models equipped with Mips’ safety system.”
The CEO said the company’s assessment is that the market has recovered slightly during this recent period, but is still seeing a challenging consumer market and it does not expect the general market situation in the Motorcycle category as a whole to contribute to the company’s “growth journey” in the short term.
“Our growth will mainly be driven by taking greater market share and the roll-out of new helmet models equipped with Mips’ technology,” Strandwitz said.
Helmet Category | Safety
Strandwitz noted that Mips had delivered its “best quarter ever” in the Safety category.
“Here we are seeing that the roll-out of all the new helmet models equipped with our technology is starting to generate the expected market demand,” he said.
“We delivered our largest quarter so far in the Safety helmet category and we see good growth of 92 percent,” he detailed. “The two largest trade fairs, ASSP and NSC, were held in the U.S. during the quarter. At these events we saw that interest in Mips’ technology is still on the rise, above all amongst end users who increasingly demand helmets with our safety system. While larger volume sales with selected helmet brands have been slightly slower than we had hoped, we are delighted to see that growth is now starting to take off and we remain very positive about this category over the long term.”
Strandwitz said that developments in the third quarter were strong, and in line with expectations.
“I’m pleased that all of our sub-categories grew during the quarter, despite a challenging consumer market. Our customers are still showing plenty of interest in developing new helmets equipped with Mips’ safety system in all three categories, and the number of completed helmets developed with our technology will be the highest ever this year,” he said. “It is nevertheless important to point out that the consumer market is still challenging and even though Mips is experiencing positive developments, the consumer market is still neither fully normalized nor particularly stable.”
Image courtesy Mips AB
