Swedish helmet technology provider Mips AB said in saw a strong end to 2024 with solid growth in all our categories and all geographies. The company posted sales of SEK 144 million in the fourth quarter, a 58 percent increase from SEK 91 million in Q4 2023. The strong increase follows a 61 percent increase in the third quarter, driving full-year sales up 35 percent to SEK 483 million in 2024.
The company also tracks organic growth, which was reported as a 52 percent increase for the fourth quarter. The full-year organic growth was in line with the reported increase for the year.
Mips AB reports in Swedish krona (SEK) currency.
“I am pleased to see that our performance has been strong in all the categories we operate in, and that we have grown in all the geographies we sell to,” offered Max Strandwitz, president and CEO, Mips AB, in his letter to investors. “During the quarter, it has been exciting to see the shift in trends that has occurred in the important American market after a challenging period. 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 is the highest ever.”
The CEO said the company is now seeing a more normalized market situation in the Sports and Motorcycle categories.
“In these categories, where we have strong customer awareness, our focus is to drive increased penetration by equipping more helmet models from more helmet brands with Mips solutions,” Strandwitz noted. “The rate of implementation of Mips technology in new helmets was the highest ever this year. Furthermore, we are still seeing great interest from our customers in all three of our categories in implementing Mips’ safety system, also in the Safety category, which is significantly less mature in terms of implementing our type of solutions.”
Strandwitz went on to say that the company has seen helmet inventory levels “largely normalized” this year, and a lot of the company’s growth is due to customers once again starting to order products, rather than taking from their own stocks. He said they believe this will continue to contribute to the company’s growth in 2025.
Helmet Category | Sports
Mips achieved growth of 56 percent in the Sports Helmet category in the fourth quarter, the fifth quarter in a row the company delivered growth in the Bike sub-category, the company’s largest sub-category.
“Global inventory levels are now at a healthier level than during the very turbulent years following the pandemic,” Strandwitz said. “This does not mean that all inventory levels have now completely normalized though, and many retailers are still trying to come to terms with an unfavorable product mix.”
Strandwitz pointed to current market data for the bike market in North America, suggesting there is a shift in the trend and volumes in the quarter have started to grow again compared to last year.
Looking at the entire year, volumes are said to be down still, the CEO also said that the market recovery has begun.
“We are seeing a recovery in Europe where there is growth in many markets once again,” he explained. “However, it is important to remember that there are relatively weak comparative figures for this market as European consumers have faced a challenging situation in recent years. The high levels of inventory that followed the pandemic have made many helmet brands cautious about new product launches. It will therefore be interesting to see how all the new helmet models are received when they are launched during the upcoming season.”
Helmet Category | Motorcycle
Mips achieved growth saw strong growth of 57 percent for the fourth quarter in the Motorcyle Helmet category, boosting full-year sales growth to 25 percent for 2024.
“We are happy to see that the inventory situation has normalized, and also that the initiatives we launched have had the desired effect,” Strandwitz remarked. “As in the Sports category, growth has primarily been 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 growth ahead will mainly be driven by taking greater market share and the roll-out of new helmet models equipped with Mips technology.
“Our assessment is that the market has recovered substantially during this recent period, but we are still seeing a challenging consumer market and do not expect the general market situation in the Motorcycle category as a whole to materially contribute to our growth journey in the short term,” Strandwitz said.
Helmet Category | Safety
The Safety Helmet category delivered its best quarter to-date in the fourth quarter, growth up 119 percent year-over-year. Growth for the full year was 55 percent in the category. The company reportedly almost doubled the number of helmet models on the market and said it has substantially strengthened its position in this category.
“During the quarter we launched a new partnership, and a new helmet equipped with Mips technology, with the HexArmor brand in the U.S.,” Strandwitz shared. “HexArmor is an innovative-driven helmet producer in the American market and we look forward to seeing how the helmet will be received. Through this launch we have sharpened our offering even further, and it will be exciting to follow developments in 2025.”
He said larger volume sales with selected helmet brands have been slightly slower than expected, but said the company was delighted to see that growth has now taken off and they remain very positive about the category over the long term.
Income Statement Summary
The increase in net sales that we saw this quarter has led to a considerable improvement in profitability compared to the the prior-year quarter.
Operating profit improved by 260 percent to SEK 62 million, or 43 percent of sales, in Q4, compared to SEK 17 million, or 19 percent of sales, in the prior-year Q4 period. For the full year, operating profit increased to SEK 174 million, or 36 percent of nest sales, from SEK 70 million, or 20 percent of net sales, in 2023.
The operating cash flow for Q4 amounted to SEK 87 million, compared to SEK 31 million in the prior-year quarter. For the full year cash flow was SEK 142 million, compared to SEK 11 million in the prior year.
The Board of Directors proposed a dividend of SEK 6.50 per share for 2024, which corresponds to 122 percent of net earnings for the year.
“This well exceeds our target of distributing more than 50 percent of our net earnings,” Strandwitz.
Inventory
Progress against inventory was said to be strong in the fourth quarter.
Updated Long-Term Financial Target
Strandwitz said the company remains confident in the strategic plan communicated at its Capital Markets Day in June 2022. The plan is built on three strategic pillars to: grow the existing business, open up new channels and markets and capture new opportunities within helmet safety.
“After summarizing the year, we have assessed the possibilities of reaching our financial targets by 2027,” Strandwitz announced. “We have seen that it has taken longer for both the retail chain and helmet manufacturers to normalize their inventory levels than expected in connection with our Capital Markets Day. This, together with a relatively uncertain consumer market, geopolitical uncertainty and a new administration in the important U.S. market, means that our new assessment is that we will reach our net sales target of >SEK 2 billion no later than 2029, which is two years later than the target communicated in 2022. Our long-term profitability target and dividend target communicated in 2022 remain unchanged.
The new financial targets are now:
- Net sales >SEK 2 billion no later than 2029 (previously 2027)
- EBIT margin >50 percent (no change)
- >50 percent dividend of annual net earnings (no change)
“We will continue to grow our business with our strong market position in the helmet sector, our broad expertise and our patented technology. We will also continue to invest in research and development and in our brand to achieve our ambition,” the CEO concluded.
Image courtesy Mips AB
