MIPS presentation of the Q1 interim report 2020 29 April 2020 KEY - PowerPoint PPT Presentation

MIPS’ presentation of the Q1 interim report 2020 29 April 2020

KEY HIGHLIGHTS • 25% net sales growth (16% organic) in the quarter despite challenging situation. Strong improvement in EBIT and cash flow • Continued high activity with more helmet projects than ever. Per today, 30,000 tests have been performed. Two new brands within the Sports category • Relocated to new office premises and test lab – increased capabilities mainly in Safety • Key recruitments in Sales and Marketing finalized. Interim CFO in place, search for long-term solution initiated • Long-term financial ambition 2025 remains intact 2 2020

WE EXPECT A VOLATILE MARKET THE COMING QUARTERS • All third-party manufacturing units are fully up and running, no third-party capacity shortages • The sales development the coming quarters is fully dependent on the lock-down situation and government restrictions Strong increase in online sales channels, however not mitigating shortfall in traditional sales • channels Close dialogue with customers regarding their cash flow situation • Record high inflow of new helmet projects. No change in the long-term underlying • demand of MIPS’ products 3 2020

DEVELOPMENT IN OUR DIFFERENT CATEGORIES SPORTS MOTO SAFETY First quarter 2020 First quarter 2020 First quarter 2020 50 Revenue, SEKm 6 Revenue, SEKm 0 Revenue, SEKm 23% Growth, % - Growth, % Growth, % 39% 98 (+2) No. of brands 1 No. of brands No. of brands 20 • MIPS has in total 105 buying customers* 4 2020

NET SALES DEVELOPMENT IN FIRST QUARTER • Good performance with 25% growth in the quarter, an organic growth of 16% Net Sales development (SEKm) and quarterly growth rates* Growth mainly driven by existing customer base • expanding their assortment with MIPS 41% 49% 87 83 • Sports category remains the key driver in absolute 53% 25% terms 52% 88% 3% 62 56 56 91% 53 51 29% 55% 45 55% 41 29% 37 12% 70% 69% 32 105% 27 24 24 Jan an-Mar ar Jan an-Mar ar 274% 21 21 2020 2020 201 2019 Chan ange i e in n net et s sal ales es, % % 10 Organic growth 16.0 71.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Changes in exchange rates 7.9 19.4 2016 2017 2018 2019 2020 Structural changes 1.0 - Total tal 24.9 90.8 90. *No u underly lyin ing growt wth r rates a availa ilable le for 2 2015 5 2020

DEVELOPMENT IN FIRST QUARTER Net Sales increased by 25%, organic growth was 16% • 16% • Gross profit up 22%, gross margin down 200 bps to 70.8%. Adjusting for acquisitions, gross margin down 90 bps to 71.9% Organic growth • OPEX – continue to invest in strategic priorities Adjusted EBIT was SEK 17m, adjusted EBIT margin 30.1% • 30.1% • Cash flow – operating cash flow of SEK 15m Adjusted EBIT margin MIPS Group (SEKm) Q1 20 Q1 19 % Net sales 56 45 25 Gross profit 40 33 22 Gross margin % 70.8 72.8 - 15 Operating profit (EBIT) 16 12 38 Operating margin (EBIT) % 29.1 26.3 - Adjusted Operating profit (EBIT) 17 12 43 Operating cash flow Adjusted Operating margin (EBIT) % 30.1 26.3 - (SEKm) 15 8 95 Cash flow from operating activities 6 2020

BALANCE SHEET AND CASH FLOW Cash flow from operating activities increased in the • Key balance sheet items and cash flow quarter with 95% to SEK 15m (8) MIPS Group (SEKm) Q1 2020 Q1 2019 Total Assets 421 333 Equity 356 284 Cash flow from financing activities was SEK 52m (-0) • Equity ratio % 85 85 Cash & Equivalents 255 249 attributable to the new issue of shares following the exercising of warrants under incentive programs MIPS Group (SEKm) Q1 2020 Q1 2019 Cash flow from operating 15 8 activities Cash and Cash Equivalents at SEK 255m (249) • Cash flow from operating activities (SEKm) 31 • Equity ratio 85% (85) 24 24 20 15 12 12 10 8 8 Q2 6 6 4 3 1 0 • The Board’s proposal regarding a dividend of SEK 3.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 per share for 2019 remains unchanged 2016 2017 2018 2019 2020 -9 7 2020

SUMMARY Good growth despite a challenging quarter • Net s sale les a s and nd a adjus usted E EBIT-margin in 1 12 m mont nths r rolli lling ng 300 45% • Healthy profit, EBIT margin and cash flow 41% 41 41 41% 41% 41 41% 41 39% 9% 40% 38% 8% 27 279 improvements 268 26 250 34% 34 35% 243 43 241 41 30% 0% 26% 6% • High helmet project activity, more brands coming 200 30% 214 21 193 19 23% 3% 25% onboard 171 71 22% 22% 22% 22% 150 20% 147 47 128 28 126 26 117 117 Short-term demand fluctuations likely, long-term 100 15% • 110 110 10% demand unchanged 50 5% New office premises and test lab increase our • 0 0% Q2 Q2 1 17 Q3 17 17 Q4 Q4 1 17 Q1 18 1 18 Q2 1 Q2 18 Q3 18 18 Q4 1 Q4 18 Q1 19 1 19 Q2 Q2 1 19 Q3 19 19 Q4 Q4 1 19 Q1 2 Q1 20 capabilities Net Sales SEKm Adjusted EBIT-margin* *Adjusted for costs in connection with the company's IPO during 2016 and 2017 and costs relating • Sales and marketing organization fully in place to acquisitions during 2019 and 2020. Adjusted EBIT margin includes legal costs relating to the company’s previous litigation processes Good position to deliver according to the 2025 plan • 8 2020

Q&A

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. 10 2020