MIPS AB - Multi-directional Impact Protection System

Stocks
21

I like the MIPS story a lot, but the stretched-looking valuation has kept me on the sidelines for now. The revenue decline has slowed, and I understand that dealer inventory levels have normalized, although the high inventory levels in the Motorcycle category are still a burden. If I remember correctly, the CEO mentioned in the Q3 webcast that sales shouldn’t be compared to 2019 levels because the customer base has grown by about 150% since then, so the ingredients for a much better performance should definitely be present.

image

According to Quartr, the consensus expected revenue of 106 million and an operating profit of 35 million (actual: 91 million and 17 million). The share price reaction (-3%) seems so muted that buy-side expectations were likely lower than the consensus estimates, or else the market is already looking past the short-term challenges. Forecasts currently predict nearly 40% revenue growth for 2024, so the company is expected to return to a growth path with a fairly steep trajectory.

5 Likes
22

Let’s post Thule’s report here as well, since Mips is also heavily tied to cycling. Strong performance from Thule, especially in terms of results. Perhaps the worst is already behind us in this industry too?
https://www.thulegroup.com/sites/default/files/pr/20240209-4eb89cdb-8b7e-42c7-aece-137e0038774c-1.pdf

E: Nice to see someone else commenting, @Thomas_Westerholm. There is surprisingly little interest in this, even though there are surely many posters on the forum who use MIPS products. Expectations at current prices are quite high, and you can’t exactly call this cheap. Personally, my interest in Mips is focused on the progress in the safety segment. Once that market opens up, Mips could see a growth spurt an order of magnitude larger and gain a new solid segment alongside the old ones.

4 Likes
23

I wouldn’t be surprised if we saw an exceptionally strong bullwhip effect in the autumn after a cold winter, as retailers have now managed to run down their inventory levels and consumer confidence and purchasing power are expected to improve during the current year. Wiitta Oy is likely celebrating having bought Orthex’s snow toy business a couple of years ago.

MIPS is a really high-quality business case, but many (at least I) are likely bothered by the extremely strong growth required by the share price and, at the same time, the difficulty of assessing how the gradual expiration of current patents and the resulting possibility for competitors to copy MIPS’s features will affect the company’s future sales. Despite the expiration of patents, Gore-Tex has managed to differentiate itself from its competitors in the eyes of consumers through the power of its brand, which MIPS is also striving for alongside the development of new patents.

Safety is undeniably attractive, as the replacement cycle for the products is significantly shorter than for consumer products, which creates steady continuity for sales.

2 Likes
24
25

Q2 2024. Looking good and it seems to have handily beaten consensus. Positive commentary on the market as well.

1 Like
26

Q3 2024

4 Likes
27

Looks good. A turn for the better is starting to show. I don’t know if @Thomas_Westerholm’s bullwhip forecast has been hit yet?
Screenshot_20241024_193545

I’m also following the development of safety with interest, and it mentions: “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.”

Promising growth percentage, even though the volumes are still small.

Screenshot_20241024_194403

2 Likes
29

Clearly a bullwhip effect is noticeable IMO, but the acceleration in growth seemed to already be priced into the stock. It will be interesting to see if the growth rate accelerates significantly from here in Q4, as we face a weak comparison period and excess inventory in the distribution channels has been cleared :eyes:

30

Here’s a company I could get to know better. Luckily, there’s already a lot of material in the thread, but there’s even more below. :slight_smile:

https://x.com/Quartr_App/status/1883579558726934933
image
image

I haven’t had time to read it all myself, the text is challenging for me, etc. It will probably take about half an hour to read, though it could take longer, as it’s not the easiest text. :slight_smile:

Key Insights

  • Hans von Holst: The story of Mips began with neurosurgeon, professor, and Dr. Hans von Holst, whose expertise in brain trauma led to a revolutionary innovation.
  • The idea: Mips was founded on the realization that helmets did not provide sufficient protection against the most common type of accident – angled impacts.
  • The solution: With its background in science and engineering, Mips developed its Brain Protection System (BPS), a technology designed to be seamlessly integrated into any helmet model.
  • Ingredient brand: Mips operates as an ingredient brand which is one of its key competitive strengths.
  • Challenging market dynamics: In the post-pandemic years, the bicycle industry has faced significant challenges, with excess inventory levels impacting market conditions.
1 Like
31

Mipsin q4, reilua kasvua kaikissa tuotekategorioissa ja kaikilla maantieteellisillä alueilla. Isoimmaksi syyksi mainitaan markkinan normalisoituminen.

October-December 2024

  • Net sales increased by 58% to SEK 144m (91), organic growth amounted to 52% during the quarter
  • Operating profit increased by 260% to SEK 62m (17)
  • Operating margin improved by 24.1 percentage points to 42.9% (18.8)
  • Cash flow from operating activities increased by SEK 55m to SEK 87m (31)
  • Earnings per share, diluted, increased by 234% and amounted to SEK 1.99 (0.60)*

Päivitystä myös taloudellisiin tavoitteisiin:

  • Net sales >SEK 2 billion no later than 2029 (previously 2027)
  • EBIT margin >50% (no change)
  • .>50% dividend of annual net earnings (no change)*

mips-ab-year-end-report-january-december-2024.pdf (3,0 Mt)

Screenshot_20250205_200508
Screenshot_20250205_200508720×367 26.4 KB

4 Likes
32

Oh, the earnings report came after market close. I had tomorrow morning marked down, but this works out fine!

Good figures, and I guess we’ve already returned to a “normal” market after the last lingering effects of the corona pandemic. This certainly lasted surprisingly long, even though management has commented on it repeatedly.

I’m definitely following this with interest.

“Helmet category Safety – best quarter so far
We delivered our best quarter so far in the Safety
helmet category and we saw good growth of
119 percent. Growth for the full year was 55 percent in this category”

3 Likes
34

This thread has almost fallen into oblivion. A few thoughts of my own about the company.

If I have understood correctly, the company’s goal is to achieve a similar position to Gore-Tex.

The total market is huge, of which only the surface has been scratched. For example, in the construction industry, penetration is very low. From my own personal experience, coincidentally, my new helmet is a Guardio branded helmet with a Mips feature.

The helmet is the best helmet of my career so far in terms of fit. However, the Mips feature was not familiar to most of my colleagues, but I believe that as understanding increases, it will be easy to justify choosing a helmet with Mips for safety reasons. One person who recognized the feature had spotted it on NHL teams’ helmets.

One worrying factor is, of course, the patent expiring in the relatively near future. On the other hand, the company apparently aims to obtain various patent combinations to protect its moat.

Other manufacturers also have their own similar features; it would be nice to hear if anyone has more detailed information about them?

Then the problem. Valuation; the company has been loaded with quite significant growth expectations.

At least with these multiples, I can’t get enough margin of safety to feel comfortable making a purchase.

Screenshot_2025-09-16-20-46-15-42_40deb401b9ffe8e1df2f1cc5ba480b12
Screenshot_2025-09-16-20-46-15-42_40deb401b9ffe8e1df2f1cc5ba480b121079×1730 159 KB

Furthermore, looking purely at the stock price, we are in some kind of downward trend. So I’m waiting for better buying opportunities.

E. Let me add that, at least in the construction industry, popular helmet models have come and gone in 3-5 year trends. So, if things go well, a helmet with the Mips feature could trend in the coming years. Of course, the market and sample (Finland) is small, but still.

2 Likes
35

Many different manufacturers have marketing jargon in their product information about why their helmet is designed to be the safest. At least POC had a rotating inner part of the helmet with a similar operating principle in some models, but now that I checked again, POC has also moved under the MIPS sticker. When regularly renewing the helmets in our household, I have noticed that the MIPS sticker no longer doubled the price of the helmet on the last buying round, as it once did. Now it seems you can get the cheapest MIPS-certified helmets for an RRP of 30 euros.

In motorcycle helmets, Kask work helmets, and climbing gear, a yellow sticker has already appeared on the back, but that disc helmet was new to me.

The story behind this invention is great, but it inevitably brings to mind Volvo and the seat belts given to everyone for free, or whether the minimization of rotational motion can be covered by patents and make large customer masses pay a significant extra price for this.

Our household’s helmets are MIPS, and fortunately, my wife had a new helmet on her head a few years ago when an excavator driver swung the bucket in front of her on the bike path. The helmet had MIPS, but the more important thing was that the helmet was new and undamaged, so it still had its tension intact.

3 Likes
36

This also came up in a discussion with a colleague.

The price has been brought down. A MIPS helmet is not necessarily even more expensive. In any case, the helmet has some internal component. So the product doesn’t necessarily come as an addition to the helmet but replaces a component.

2 Likes
37

Mips itself gets about 5 dollars per helmet, meaning manufacturers’ margins have been quite hefty previously. Mips has been a selling point used to justify the prices of premium helmets.

image
image744×133 7.41 KB

The obvious development is a shift from a safety solution only for the premium class towards a market standard at lower price points. This shift is accelerated by increasing consumer awareness, and at best, Mips would be a mandatory requirement for helmets in consumers’ eyes. So if and when the development path is from premium → “standard”, prices will indeed have to come down, especially regarding manufacturers’ margins. From Mips’ perspective, it’s good that volumes are growing, but at the same time, this might eventually erode Mips’ pricing power.

2 Likes
38

Q3

image
image1227×651 116 KB

5 Likes
39

An acquisition is underway. The products of the acquired target seem to be specialized in extreme sports.

2 Likes
40

Tomorrow is earnings day

Consensus expects Q4 sales of 155 and EBIT of 64

Screenshot_2026-02-10-18-03-08-38_40deb401b9ffe8e1df2f1cc5ba480b12
Screenshot_2026-02-10-18-03-08-38_40deb401b9ffe8e1df2f1cc5ba480b121080×1848 126 KB

And for the full year :backhand_index_pointing_down:

Screenshot_2026-02-10-18-02-41-38_40deb401b9ffe8e1df2f1cc5ba480b12
Screenshot_2026-02-10-18-02-41-38_40deb401b9ffe8e1df2f1cc5ba480b121079×1851 123 KB

2 Likes