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Good day, and thank you for standing by. Welcome to the Mips Interim Report Q1 2026 Webcast and Conference Call. [Operator Instructions] 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.

So 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 3 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 as Mips has a very scalable business model, we see with the strong growth that we see, we also had a good improvement of the profitability.

And 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. And 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. And of course, we saw also positive development in the challenging U.S. 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. And of course, we all hear and heard that the snow and winter season in the U.S. market was not fantastic. So good to see that we could deliver growth also under those market conditions. And 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. And of course, we continue to roll out new innovations in Moto and of course, looking forward to quite an exciting 2026. And 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. Substantial reinforcement of the category achieved through the integration of Koroyd and of course, being able to offer also a lot more product, and 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. And 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.

And 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 performed really, really well in the U.S. 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. And then in Safety, 135% growth. Organic growth was 6%, which is, of course, a little bit slower than we expect. And 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 a 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 U.S. 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. And 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 equivalents of SEK 180 million in the quarter versus SEK 240 million end of last year, and 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. And net debt versus adjusted EBITDA for the last 12 months amounted to 0.3x, and that's well below our covenants of 2.0x. And the Board proposes a dividend of SEK 2.5 per share, and that corresponds to 55% of group's net earnings for 2025.

I then hand over to you, Max.

So 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 3 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. And 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. So 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 costs, 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. And we remain positive on our long-term outlook and of course, the delivery of our financial targets.

And with that, I open up for questions.

[Operator Instructions] Our first question for today comes from the line of Emanuel Jansson from Danske Bank.

A couple of questions from my side. And I think starting off with the market and the market demand. I think in the Q4 report, you mentioned that the U.S. market for the first time in several quarters stated or that you saw some volume growth in the market of a couple of percent. Can you perhaps give us some more color on what you have seen during Q1?

Yes. So of course, the Q1 market data is not announced until, I think, 26th of April. So 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. So 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, very well on the market. And of course, that drives our increase in demand despite the market being flattish.

And if you take Q4, for instance, there were 25 new helmets launched with -- on the addressable market and 20 of those had Mips. So really, really sharp increase of the penetration also on the bicycle market. And of course, that's what drives our growth. So long answer to your question, market will probably remain flattish or low single-digit growth at best. And of course, our growth is much, much driven by the increase of penetration of our customers' portfolio.

Perfect. And you continue to see quite low inventory levels, both at OEMs and the retailers, right?

Yes, that's correct.

Good. And then heading into the second quarter of this year, I mean, with the inventory destocking 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, given all else being equal so far?

Yes. I mean what -- 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. So we see good development on the market. And of course, we are facing in Q2 a little bit softer comparator, but long-term ambition, 30% plus.

Perfect. And jumping then to Safety. As you mentioned, 6% organic growth in this quarter, but 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?

Yes. So 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 U.S. market and especially related to full brim helmets. And 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?

Yes, 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. And what kind of growth did you see within safety for Koroyd in this quarter? Is that possible to give us that number?

Yes. 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. So we will not report per quarter because, of course, like I said, smaller companies doesn't sometimes report per quarter. And of course, if we haven't audited the quarter numbers, it's difficult to refer to them. So I can only like talk about the full year guidance, but we see good development also in that part of the portfolio.

Okay. Great. And just one last question regarding Koroyd then. I think we know that have a dilutive effect on your gross margin. Is it fair to assume also on the EBIT margin in this quarter that is a dilutive effect for EBIT margin from the addition of Koroyd?

Yes. And I think, I mean, most companies in our industry, of course, Q1 is historically a very, very small quarter. And 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. So having an EBIT margin like we saw with the Mips Group is, of course, not normal for any business. So yes, it had a negative impact in the quarter.

[Operator Instructions] And our next question comes from the line of Adela Dashian from Jefferies.

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 -- is it due to increased visibility? Or is this purely just timing and phasing related and your full year guidance still holds?

Yes. It's more timing and phasing related. Of course, we are extremely careful on how we spend money. That's also is, of course, when it comes to legal costs and so on, we will not spend $0.01 more than we need, but you will have swings between the quarter. 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 1 or 2 quarters, be maybe SEK 1 million or SEK 2 million more and sometimes it's SEK 1 million and SEK 2 million less. So no big drama around that.

Okay. And 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. What's -- like historically, I guess, has there been any pattern of repeat orders during the season? And 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?

Yes. I mean, historically, you're right. You see that customers produce a majority of their -- the goods that they need for the coming season in normally Q3 and Q4 with, of course, the 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. So 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. And then you have that, of course, for the spring launch when the season normally starts. And 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. So yes, a good season could probably mean that we get more repeat orders. So that could have an effect, of course.

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?

Yes. I mean we already have launched joint product because, of course, we are in the same helmets. But of course, we are also doing like joint integration where you have already prepared Mips and Koroyd integration. And yes, they will hit the market within a year. So that's right.

And then 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, I'm sorry, I don't have a perfect view on Section 232. So 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.

We will now take our next question -- this question comes from the line of Alexander Siljeström from Pareto Securities.

Congrats on a strong report. A couple of follow-ups from my side, just starting off with Koroyd. And I appreciate that it's the seasonally smallest quarter. But could you share the EBIT margin for Koroyd here in Q1 approximately? Was it breakeven or a bit positive? Yes, starting off there.

Yes. So in the quarter, it was basically flat. So 0 profit. What we got, of course, is the net sales, but no profit contribution. And as us, 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.

Yes. And then you -- I guess you're still sort of confident in the 45% EBITDA margin on a full year basis, right?

Yes, we are still confident that it is a very profitable business. Of course, nothing has changed in terms of that. And similar to Mips with Ingredients brand with growth normally comes to profitability.

Yes. Got you. That's very clear. And then maybe just on sort of the strong sports performance. Would you mind breaking out the growth in snow how much here in the quarter?

Yes. So 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.

And then 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.

So 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 you actually need, what kind of rotation and 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 are of interest for rotation. So we see a lot of those customers coming to us. We also see that the new competition standard under FIM02. so the really high-performing helmets when it comes to MotoGP and so on, there is a very strong requirement.

And there, actually, the rotation threshold is quite high and the overall performance of the helmet is also required to be very, 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. Then we also realize that a lot of our innovation, of course, we like generic innovation sometimes because it's very easy to plug and play and you can use it in most products. But 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 DNA is, of course, in the fit.

So 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. And of course, we need to be able to accommodate that. So that's really where Mips as a company has become a lot more consumer-centric and also did a step change. And of course, we see the benefit of that change in terms of growth and the interest of the category.

[Operator Instructions] This question comes from the line of Carl Deijenberg from DNB Carnegie.

So yes, I'll start with a general question. I just -- I mean, 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 oil prices have moved and in turn plastic prices as well. Is that something you are starting to see materialize?

Not yet. I mean if you look at -- I mean, last year, it is quite a big history of price increases, of course, relating to tariff implementation in the U.S. So you've already seen 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, then we will be faced by cost increases.

And of course, then we need to do price increases in the market. But so far, that has not had an effect. So I think depending on what will happen, I would say, coming weeks and months, that, of course, could change the situation. Then, of course, when it comes to input costs, those are mainly related to plastics. So it's more in that space where we could see some cost increases. And if that happens, we will, of course, then need to do price increases as we always do.

Yes.

But nothing yet.

Yes. 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 -- yes, second question on the topic is if you have 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 setup for you here in Q1 and maybe going into Q2 as well?

Yes. No, we haven't seen any pre-buys and especially not since 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 3 months, something going to happen. And 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. But then, of course, we are an ingredient brand. So of course, as an ingredient brand, you will be part of the bigger product, which is the helmet. And if they start to be worried about that, then you could see an effect, but nothing we have seen or heard about so far.

Good. Then 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 4 previous quarters have been affected by the same or similar item, which you haven't adjusted for. So yes, a very simple question. Is there any specific reason behind the adjustment that you're starting to adjust for it now? Do you see it sort of approaching the end here...

For us, of course, it's always to be very transparent to investors. Of course, when it comes to legal costs, we saw it during last year, we had a discussion, should we adjust for it or not. And then, of course, we waited a bit for that. Then when we go into a new year, we saw that this will continue at least during 2026. Based on what we know now, then, of course, we felt that, that was the right time when we started the new year to do an adjustment. That's why you see an adjustment also backwards. So also '25 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. And then 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. I mean 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. But no change to the overall communication.

There are no more phone questions at this time. I will now hand the call back to management for web questions.

Yes. And I got one question around, are you able to provide some color of the nature of revenues when it comes to project.

And 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. So it's really that we see a big interest to do more helmets, of course, and then with that also increases the project revenues.

And when do you expect your -- the existing IP legal costs with your customer to end?

I mean, if we go to court, then that would be in '27. So of course, then we will probably see some change to the spending, but it all depends on how long the case will carry on.

Then someone asked if the 30% growth that we were talking about was excluding Koroyd. So when we talk about growth, I think the fair metric to talk about is organic growth. So yes, it's excluding Koroyd and 30% is the organic growth number that we expect to see.

So 30% is organic, not adding the inorganic number on top of that, of course.

Then we got the question, there is some evidence of -- to suggest a positive relationship between increased cycling and higher energy cost in some markets.

Yes, 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. And of course, when people are buying and riding an e-bike, they also have a big tendency of wearing helmets. So of course, we see a very positive effect of that. So 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, U.S. has still not shown the same trend. And of course, you see much less commuting and, of course, a very different infrastructure. But you do see positive effects coming out of that.

Other than that, I think we have covered most of the topics and so on. And of course, thank you all for listening in and speak to you again next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Mips Year-end Report 2025 Conference Call. [Operator Instructions] 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 of Mips. Please go ahead.

Thank you, operator. Good morning, everyone. My name is Max Strandwitz, and I am the CEO of Mips. With me today, I also have our CFO, Karin Rosenthal, and we will take you through the Mips presentation of the Q4 year-end report of 2025.

So if we start with the key highlights, it was a good end of the year. Strong development with 18% organic growth in the fourth quarter. We did grow in all categories despite the challenging conditions. And our year-to-date organic growth ended at 21%. Of course, with year-to-date, we mean full year. The good momentum in Europe continued. We saw an organic growth of Europe of a little bit more than 30%, which is, of course, a fantastic number given that we grew 137% the year before. So despite a very strong comparator, we continue to see good performance in Europe. And if we look at the full year split of sales, Europe actually contributed to 43% of the total net sales of Mips, which is something that we have been very happy about and of course, part of our ambition to be less dependent on the U.S. market and having a better sales split between Europe and U.S. market.

But also the U.S. sales developed well. We did grow close to 30% organically also on the U.S. market, which is a little bit surprising given the challenging consumer market that we see. We saw a little bit of a change in momentum when it comes to the U.S. market, and I will come back to that a little bit later in the presentation, but good performance also in the U.S. market. When it comes to the Asian market, not our biggest part of our sales, we saw a softer market with soft development, especially relating to the Chinese market, where we saw a very hesitant consumer. Of course, we did a very exciting acquisition in December through the ingredient brand Koroyd, great complementary portfolio to Mips and the brand with global potential, which is also something that we appreciate a lot.

I will talk a bit more about that also later in the presentation. We had a good development of the underlying profitability. A lots of ins and out in the quarter. The decrease in EBIT that we saw is fully explained by the impact of legal cost, the ForEx headwind and transaction cost. And if we would adjust for the negative impact of the legal cost and the transaction cost related to the acquisition of Koroyd, we would actually be very close to a 40% EBIT margin, actually 39.8%. We have had a legal dispute that will continue. And we will continue to support our customers in the defense of the legal dispute, similar level to 2025 expected also in 2026. And just as a reminder, in 2025, we spent SEK 43 million in this legal dispute.

The Board of Directors is proposing a dividend of SEK 2.50 per share, which is corresponding to 55% of net earnings, a little bit ahead of our financial ambition of having a dividend distribution of at least 50% of net earnings. And of course, also adding Koroyd to our business, we remain confident in our long-term strategy and the journey towards our financial targets. So if we start with the Mips Group's acquisition of Koroyd and a summary of what we actually did acquire. We see it much more as a merger rather than acquisition because, of course, it's 2 great companies coming together. But first of all, strategically, really important to look at the strategic fit. And actually, when it comes to the acquisition, we actually see that it strengthened 2 out of 3 already existing strategic pillars.

The first one, of course, of our pillars is to grow our existing business of rotational protection solutions in helmets for Sports, Moto and the Safety category. That, of course, will remain unchanged because that's Mips key focus areas. But if we look at other areas like capture new opportunities within helmet safety, of course, Koroyd and impact technology is a great addition to that. And also the third one when it comes to opening up new channels and markets, of course, having the opportunity to expand into body protection, also having customers in tactical and so on, of course, opens great opportunities for further growth.

If we look at the culture fit, which is, of course, extremely important when you look at acquisitions, Koroyd has many similarities to Mips. First of all, it is a very vision and purpose-driven company to make active life safer. It's market leader within its niche. Ingredient brand, which is, of course, trusted by consumers and leading product brands. It's very much a science-led and technology-driven company. They have world-class testing and simulation capability, just like Mips. Scalable asset-light supply chain, high EBIT margin despite significant R&D spend. Important to note that Koroyd will continue to operate as an own brand. The current strong leadership and operational team will continue to lead the Koroyd business. But of course, both brand teams see many synergies when it comes to product development and of course, product portfolio expansion.

If we look a little bit more on the details of the transaction, the purchase price amounts to EUR 40 million on a cash and debt-free basis, corresponding to a multiple of 8x adjusted 2025 EBITDA. In addition, the sellers have the possibility for an additional earn-out up to EUR 25 million, corresponding to a multiple in total of 13x if we compare against the same adjusted EBITDA of 2025. The transaction was financed through a combination of existing cash, and we also have arranged with a credit facility. And of course, the acquisition is expected to contribute positively to Mips earnings per share, EBIT sales growth, both on a short and a long-term basis. And I think it's also important to note that Mips and Koroyd will be consolidated under the same group first time in the Q1 reporting.

If we look at another very important area for us, it's, of course, what we do in sustainability, and we are really proud about the work that we have done there. We have had great development also in 2025. First of all, Mips was ranked #1 in Carnegie's sustainability rankings within consumer goods, which is something that we are extremely happy about. AAA rated at MSCI and also top rated at small and mid-cap enterprises at CDP. So really starting to get also great recognition externally for our sustainability work. Of course, when it comes to sustainability, it's not the awards that really makes a difference. It's what you actually do.

And of course, we have 3 key targets, which we delivered against. And the first one is, of course, to continue to reduce our emissions, and we did that during the year. And including 2025, we have now delivered 49% of our 2030 ambition. And that, of course, is in line with our long-term ambition. We have also been quite successful when it comes to increase the usage of recycled materials in our products. And today, and that is, of course, in 2025, the usage amounted to 34% of our total usage. And Mips has also, of course, a well-developed factory audit program. And we have increased our average score from social audits to above 90%, which is actually ahead of our 2030 ambition. So really happy with the progress that we did in sustainability.

In Sports, we see that the progress continues. We are happy with the development that we see there. Good quarter with 17% organic net sales growth in Sports. We did see strong growth in the European market. And like I said, that's on the back of a very strong comparator last year where we actually grew 137% in total. So we now had 6 really, really strong quarters in Europe and of course, start to see that the impact, of course, also showing up in the total sales of Mips as a company. We did see also good growth when it comes to the challenging U.S. market. We saw in terms of market data, a little bit of a trend shift when it comes to Mips addressable markets.

And if you look at bike, for instance, we saw actually for the first time in a long time that the addressable market grew 1% when it comes to volume in bike, and it actually grew 5% when it comes to price. So of course, a lot of the customers have initiated and taking price increases to compensate for tariffs, but good to see that also in terms of volume growth in bike helmets, we saw that there was a positive progress. Then when it comes to snow, same ratio, 2% volume growth. If we look at the total market when it comes to U.S. dollar and price, it actually grew with 6%. So of course, still soft market, but at least it has started to go into positive territory. We also see that our customers coming from quite a low inventory level, now have started to refill their inventory. Every one of them, as you have seen in previous quarter, has been a little bit careful in terms of filling up their inventory because of the uncertain tariff situation.

And of course, it's also good to see that bike continues to develop well overall. We had the ninth quarter in a row with growth in bike, which is something that we're also happy about. And of course, we continue to see good volume growth also in snow, both in the quarter and year-to-date. We did launch our collaboration with Mikaela Shiffrin, of course, the greatest Alpine skier of all time. So something that we think is a great ambassador for the Mips brand that also can help us to increase the awareness of Mips globally and of course, committing to the overall vision of Mips of driving the world to safer helmets. And I think it's also important to note that the shift that we have really been doing in snow, where you only take a difference of the last Olympic versus the current Olympics.

When we look at our athletes this time, we actually see that more -- a majority of the people that are wearing a ski helmets is actually a helmet equipped with Mips. So something that, of course, we are very happy to see. And the long-term positive outlook in the Sports category remains. If we look at the development in Moto, we saw good development also there. 32% organic net sales in Moto in the quarter, year-to-date net sales now amounting to 22% organic growth. And we saw good development also in both off-road and on-road category. And good to see that the volumes are coming back in Moto after a challenging period and the impact of the U.S. tariffs. We continue to roll out a lot of new innovations in the Moto category and, of course, are quite excited about 2026. And no change to the long-term outlook, good opportunity to continue to grow in the category.

In Safety, we saw organic net sales growth of 41% in the quarter. If we look at the year-to-date performance, it's 42%. We, of course, have seen during the year and also the quarter that performance is impacted by the implementation of tariff and related cost increases where we have seen some delay in ordering. If we look at the underlying in-market performance, we actually see that we have great sellout with new brand wins and also new products. And of course, during the quarter, it was also the world's largest fair when it comes to occupational health and safety. In Germany, it's only every second year. And there, of course, again, the interest for Mips in the industry was confirmed. The long-term ambition remains unchanged. It's also good to see that the acquisition of Koroyd can also accelerate our growth in this category and make our offering even more relevant in the category as such.

So if we look at the category performance, like I said, in Sports, Q4, 17% organic growth, 20% full year. In Moto, 32% in the quarter and 22% full year; and Safety, 41% and 42% full year.

With that, I hand over the presentation 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 a good development in the fourth quarter with an increase in net sales of 2% and adjusting for FX due to a stronger SEK versus U.S. dollar, net sales increased 18% organically. Gross profit increased with 2% and a good gross margin of 72.9%, same as last year. We saw an underlying improvement in profitability. EBIT was down 24% to SEK 47 million versus SEK 62 million last year, which is fully explained by legal cost of SEK 7 million, transaction costs due to the acquisition of Koroyd of SEK 5 million and ForEx.

EBIT margin decreased by 11 percentage points to 31.8% versus 42.9%. Excluding legal costs and transaction costs, EBIT margin was 39.8% in the quarter. The higher spend in OpEx is fully explained by the legal costs, the acquisition costs and the ForEx. So we have also continued to invest in our strategic priorities. We had a good operating cash flow in the quarter with SEK 52 million. And if we look at the financial KPIs, organic growth of 18%, 32% EBIT margin and operating cash flow of SEK 52 million.

If we turn to next page and look at the development for the full year. Net sales increased with 10% and adjusting for the FX due to a stronger SEK versus U.S. dollar, net sales increased 21% organically. Gross profit increased with 12%, and we saw a gross margin of 73.4% versus 72.5% last year. And the increase was mainly explained by the increase in sales and the sales mix. We have an underlying improvement in profitability. EBIT was down 11% to SEK 156 million versus SEK 174 million, which is mainly explained by the legal costs of SEK 43 million and the FX. EBIT margin decreased 6.9 percentage points to 29.2% versus 36.1%. And excluding legal costs and transaction costs, EBIT margin was 38.2% for the full year. So the higher spend in OpEx is fully explained by legal costs and the ForEx, and we have continued to invest in R&D and marketing during the year. We had a strong operating cash flow of SEK 148 million versus SEK 142 million last year. So the financial KPIs, 21% organic growth, 29% EBIT margin and operating cash flow of SEK 148 million.

If we look at the balance sheet and cash flow, we have cash and cash equivalents of SEK 214 million versus SEK 382 million last year. During December 2025, Mips obtained a revolving credit facility of SEK 300 million to finance the acquisition of Koroyd. The net debt versus adjusted EBITDA amounted to 0.5x. The operating cash flow in the quarter was SEK 52 million, and the Board proposes a dividend of SEK 2.5 per share, corresponding to 55% of net earnings.

And then over to you, Max.

Yes. So if we then summarize the quarter and the full year, good year -- good development in the quarter with 18% net sales growth. We did grow in all our 3 categories despite challenging conditions. Good performance also year-to-date, of course, with 21% organic growth. And of course, as we are growing significantly faster than the market, we are gaining market share, of course, both in U.S. and the important European market. We do expect the positive development to continue with, of course, less hampering effects from the tariffs, which we saw in 2025. Good to see also, I wouldn't say it's a turnaround, but a little bit positive signs of the U.S. consumer in Q4 when it comes to helmet. And of course, good to see also that the U.S. brands are also refilling their inventory again.

Of course, the exciting complementary acquisition of the ingredient brand, Koroyd, will, of course, strengthen our position in helmet safety further and offer possibilities for product extensions in adjacent categories, which is, of course, something that we are quite excited about. Good underlying improvement in profitability. The decrease that we saw is fully explained by legal cost, ForEx headwind and transaction costs. And we remain positive on our long-term outlook and of course, the delivery of our financial targets.

And with that, we open up for questions.

[Operator Instructions] The first question comes from the line of Emanuel Jansson of Danske Bank.

Hope you can hear me. And a couple of questions from my side. And on the organic growth seen here in the quarter, can you provide some color on the sequential development during the quarter, maybe especially regarding the U.S. market. And so did you see any acceleration or de-acceleration over month-over-month?

Yes. I think, I mean, overall, it was relatively equally spread. I would say that in the end of the quarter, we saw a little bit of an uptick of the U.S. market, of course, potentially also from a little bit stronger sales, at least than we anticipated from the U.S. market and, of course, refilling the stock. So it ended a little bit better than it started.

And given that the Chinese New Year falls later this year versus what it did in 2025, can we assume that some of the normal Q4 sales has shifted into the first quarter of 2026 regarding especially bike sales or bike helmet sales?

Yes. Given that, of course, during my 10 years at Mips, I don't think that the Chinese New Year has been so late, which means that they have at least 1.5 months more to produce and, of course, ship. So yes, we see a good momentum also into Q1 when it comes to order momentum and so on. And part of that is, of course, attributed to a later Chinese New Year. When you normally see an earlier Chinese New Year, of course, then to be able to make the season, of course, you produce maybe a little bit more in Q4 because, of course, then the Chinese New Year comes and you don't have time to hit the market before the season starts.

That's very clear. And jumping back to the U.S. market, where I think the growth was quite impressive. And can you maybe share us some insights on which categories or customers that drove this growth most strongly in this quarter?

Yes. I think, I mean, first of all, if we look at the total market, which means, of course, not only the addressable market for Mips, it was actually shrinking with 1%. So it was slightly down and the addressable market was up. And when we look at the addressable market for Mips, we look at helmets above USD 30. There is a couple of brands that is doing really well on the market at the moment. Giro, which is one of our bigger customers is doing exceptionally well, and they're gaining a lot of shares. Also, we see Smith Optics also doing well, especially in the mountain bike segment, and we also see that the Fox brand is doing well. So a couple of brands that is really outperforming at the moment. And of course, all of those are heavy Mips customer, and that helps a lot.

And should that also be attributable to more premium type of helmets that are doing better versus the -- towards the end consumer?

Yes. I think when we segment the market, and of course, there is different ways of slicing the market. I would say top premium market, we have never seen actually especially weak market. It seems like that consumer is immune to whatever setbacks happen. So they seem to buy products anyway. And then we talk really premium product. What was a little bit of a shift in this quarter is that we also see in mid-price levels that the consumer is coming back, which is a bit of a change. And of course, with that consumer also comes quite a lot of volume. And of course, that has a direct contribution to the volume development.

Perfect. That's really interesting. And heading then back to -- heading to Europe, I mean, 50% organic sales growth during 2025 and you increased your market share and increased market penetration, what should we think is a sustainable growth rate in 2026, you think, given that you have grown into size, but you still have plenty more to do in that region?

Yes. I think, I mean, we do have fantastic momentum in Europe, would be fantastic even if Europe can pass ahead of the U.S. market would be really a good sign of the really establishment that we have done in the European market. So I do expect continued good growth in Europe. There is a couple of regions where we have started, of course, in a fantastic way. Germany has been very favorable for us. We see good development there. Then, of course, we also see in France that the market development is really, really good for us. Switzerland, of course, not a lot of market data, but really high penetration. Nordic is a good region. What has been the key change also is that we see that the south of Europe is starting to also appreciating, first of all, helmet use and of course, also helmets with rotational technologies like Mips.

I think what also was a bit fantastic for 2025 is, of course, that in Italy, they also started to mandate helmets when you're skiing and so on. And of course, that, in general, of course, start to increase the awareness on helmet safety in general, but also, of course, these type of mandates from governments also help to make people more safety conscious. So there were a couple of different things helping, and we see that trend continuing. And also what has been a big change for us in Europe is that we don't only sell well in premium helmets, but we see also that we can reach down and, of course, target consumers also in lower price points. And again, with lower price points comes also higher volumes.

Perfect. And last 2 questions here. On the Koroyd acquisition, can you share anything about how the business developed during Q4?

Yes. I mean we do not comment too much about it because, of course, it was not owned by Mips as such. And of course, those numbers has not been audited by us as was not part of the due diligence and so on. They continue to see good momentum. They have developed well when it comes to safety and of course, also sports, and that was the key growth driver. So no change to the momentum than they have seen prior quarters. And of course, we expect that to continue also into 2026.

And then, of course, we do see some customer synergies across the board, both ways, where, of course, we have been talking to a lot of customers, a lot of brands are excited of combining both Mips and Koroyd into helmets, which is something that, of course, is part of the strategic rationale of the acquisition. For us, Koroyd will always be a premium offering. And of course, we will work with a select amount of brands, but at least the start of the discussion has been very positive. So I think we can also get some sales synergies and of course, really excited to show what we can do both in 2026. But of course, as helmet project sometimes takes a little bit time, of course, also in 2027.

Perfect. And final question here. And correct me if I'm wrong, but I just think that the previous communication regarding legal costs indicated that it would gradually decrease during 2026. But I mean, given now the rhetoric now in Q4, it seems to be more or less in line with 2025. Has anything changed? Or what should we expect here going forward in the nearest quarter when it comes to legal costs?

No, you're correct when it comes to the previous communication, we did expect slowdown of cost, which you partly saw already in Q4. We are, of course, still preparing for the case. We are doing a lot of investigations and of course, preparing us to make sure that we are as prepared as possible. It's always difficult when it comes to legal cases. Sometimes they can end very quickly. And of course, that's normally the best resolution. But since we do not know exactly how long it will go, we decided to take a little bit more cautious communication on this. So I wouldn't say that nothing have materially changed. It's more us being a little bit more cautious on the communication. The only thing we know is what we spend in 2025. And then, of course, it's probably the best to assume a similar kind of momentum in '26. I hope I'm wrong, but I think the cautious view is probably better at this moment.

The next question comes from the line of Carl Deijenberg of DNB Carnegie.

So a couple of questions from my side. First of all, if I could ask on the quarterly seasonality in the acquired entity, how does that compare relative, let's say, legacy Mips when we look at the quarterly distribution going into '26? Is that a material difference on net sales and earnings contribution on a quarterly level? Or how should we think about that?

Yes. Just to make sure I understand. So it was in terms of the quarterly phasing when it comes to Koroyd.

Right. Exactly.

Sorry. So yes, you do see a similar pattern to Mips, where you have the smallest quarter when it comes to Q1. Of course, that's normally the case all the time because, of course, you have Chinese New Year, factories close and so on. So it has a similar phasing pattern than Mips when it comes to Q1. When it comes to the rest of the quarter, which means Q2 to Q4, given that they are a little bit more exposed to safety, they have a more, I would say, flat phased, maybe that's not the right word, but they have a more equally spread sales across the rest of the 3 quarters.

Okay. Perfect. And then I also wanted to ask on a similar topic. I mean when you look at their '25 development, did they have any quarters that were exceptional in any way when we look at the sort of quarterly comparisons also going into '26. Did they, for example, see a similar development as you did in Q2 on Liberation Day and so forth or anything to keep in mind there when we model the quarters?

Yes. I mean everyone in the industry, of course, had quite a hiccup when it comes to liberation. They -- at least the ones that have U.S. exposure. And of course, they have a big U.S. exposure and so on, even bigger than we had. So of course, they saw an impact of that. So I wouldn't say it's materially different. It's difficult for us, of course, to comment too much of the quarters because, of course, -- this is a relatively small company and, of course, focused mainly on full year delivery and so on. We have a quarterly split, but without having audited quarter-by-quarter, it's, of course, difficult to give too many comments. But it seems like quite a normal seasonality from a business exposed to industrial safety and snow as such.

Okay. Good. Then I also wanted to just follow up on the sort of guidance on the legal costs going into '26. And then, yes, for the full year, you were right about SEK 40 million and roughly SEK 7 million here in Q4. And I'm also just wondering a little bit on the phasing here because annualizing that guidance, that's obviously quite a step-up relative to the exit rate of SEK 7 million here in Q4. So is the run rate now going forward, is that going to be around SEK 10 million per quarter? Is it going to be come up already here in Q1? Or could you say?

No, I think SEK 10 million is probably a fair assumption. And of course, given that these costs tend to fluctuate, I think it's much better to have like an even phasing of SEK 10 million per quarter.

Okay. Great. Then finally, also, I just wanted to ask geographical development for you or at least what you disclosed. Just if you could share a little bit more details on the development in China, particularly given it's obviously a quite big contraction here year-on-year and also sequentially relative to Q3 despite the seasonality. So any further granularity to add there?

Yes. I think, I mean, as any company exposed to the Chinese market, of course, especially when it comes to consumer demand, you see a very hesitant Chinese consumer. It's not a huge part of our business. It's actually quite a small part of our business. We see that the Chinese consumer is much more hesitant. You have also seen at some of the big retailers shutting down a lot of shops because, of course, the Chinese consumer, a lot of them has a lot of money invested into property. And that, of course, has been everyone's pension retirement plan and so on.

Now there is a big uncertainty what happens on the property market. The Chinese consumer appreciate cash and, of course, have started to save a lot of cash, and that means that they are not spending. You see that across the board when it comes to all consumer brands. Some of the partners we talk to, they say that the market is down 70% to 80%. I think that's a little bit rough, but at least we see a very soft Chinese market at the moment. There has been some initiatives by the Chinese government, but they don't seem to have that effect yet. But of course, we know that China normally can change a lot of things. And of course, we see quite a lot of excitement when it comes to winter sports. We also start to see that Viking is a big category. So I think the Chinese consumer will come back. But for me, it's very difficult to speculate exactly when. So I will continue to have quite a negative view at least on the Chinese consumer for 2026.

There are no further questions via the phone. I will now hand over for questions via the webcast.

Yes. So the first question was about legal costs, which we have explained. Then the second question is, what is the medium term to expand in Moto industrial segment? And what is the impact of tariffs that you see in U.S. in 2026? And then the third, based on the same question, do you see demand supply pricing has normalized.

So when it comes to Moto, like I said, we started to see an uptick in volume already after the implementation of tariffs. I think it's great to see that the off-road category is really coming back also in terms of volume. And we start to see more customers also on the on-road segment, which is something that has been lagging behind. We do see a lot of attention to the new standards that is coming into play and making it a lot tougher for helmet brands to pass the new standards without the rotational technology. And of course, that's what we do. And that, of course, is supporting the plan. And of course, this is not something that has happened overnight. But when it comes to development in motorcycle helmets, development time can easily be 3 years. So a lot of these projects has already been done. And of course, that's what we are rolling out, and that will generate the growth that we have been seeing.

When it comes to industrial safety, I think most companies will probably 41% in the quarter organic growth, 42% full year is a great number. I think we should be able to do more. Of course, we were a bit surprised by the tariff implementation and of course, the pricing effect. And it's not so much about the helmet, but it's normally quite big companies. And of course, helmets is a small portion of what they actually sell. And sometimes, of course, they need to price up their whole segment when it comes to tariffs and so on. And then, of course, the attention to helmet is pushed back. We have a couple of really big volume projects with so-called round or brim helmets, full brim helmets for the U.S. market, which is very much what is in style. They will be launched during -- or have already been launched, but will start to be produced in Q1 and onwards. And that, of course, will generate a lot more volume.

Then, of course, adding Koroyd business, also industrial safety, we were a lot more relevant. And of course, we can do even more when it comes to helmet. So I think in industrial safety, when it comes to our customer acquisition plan, I think we have all the customers that we need in order to reach the plans that we have set. For us, it's really making sure that we support the sell-through of the Mips equipped product and making sure that we get bigger penetration in their total portfolio. So quite excited about what happens in safety. Like I said, 42% is a good organic growth. But of course, I'm not always known as a patient man and of course, want to have more, and that's what we are gearing up for in 2026.

And then when it comes to our recruitment plan for 2026, of course, Mips is a company that is growing. We also plan to grow the Koroyd business. And of course, the key focus that we have at the moment is to add more people in R&D. We have always had a ratio of Mips and a ratio I like because it's very simple, one engineer, one person in the rest of the company, and that's really a ratio that I think is effective. when you are a company which is very innovation focused and so on. Koroyd is 1 to 3 at the moment.

So I really hope that we can get that up to the same ratio as Mips and continue to do a lot of innovations. And like I also explained in the report, we are doing a lot when it comes to creating a lot more innovation. We're also stepping up in terms of the amount of innovation. So we see a lot of new great Mips products coming out. Koroyd has a fantastic portfolio, especially when it comes to adjacent areas like body protection, gloves and so on. So really happy to share what we are going to do there.

So key recruitments will be engineers. And then, of course, as any company that scales up, even though we both have a fantastic scalable business model, we need to add also resources everywhere else, but it, of course, will be in a much more scalable way. We are an asset-light model and so on. And of course, the amount of headcount will not increase in line with the growth that we expect to see in 2025.

And then it's -- can you provide any update on project volumes versus the prior period, given that the revenues came down a little bit during the year. So we actually saw in Q2 and it started to stabilize in Q3 that a lot of our brands, they focus very much their engineering resources around relocations. So relocations outside China. And then, of course, we start to see that the volume is coming back again. And already in Q3, we saw on par with previous year and so on. And at the moment, we have great project momentum, and we can actually not do all the projects that we have in the pipeline. And of course, that's why we're also recruiting more engineers.

And then, of course, it's a question on you can talk about the developments of new safety models or customers over the period, given the significant trade shows like World of Concrete that took place over the quarter. And of course, World of Concrete was in January. There, of course, we supported a lot of our brands. And the key focus there was, of course, to really drive the rollout of the full brim helmet. Full brim helmets is a big thing in the U.S. That's where you have the main part of the volume. Mips was first implemented in more like climbing style helmets. And now we see that we also go into full brim helmets. That's where you also see a much bigger part of the volume. And that's also where you see a big part of Koroyd's business is in full brim helmets. That's where they see most part of the volume.

So I think that's basically all the questions that we have. Of course, if there is any follow-ups or you need to find out more, you know where to find us. If not, then speak again next quarter. Thank you for listening in.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Mips Investor Presentation Webcast and Conference Call. [Operator Instructions]

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. Hello, everyone. Welcome to the Mips presentation of the KOROYD acquisition. My name is Max Strandwitz. I am the CEO of Mips. And with me today, I also have Karin Rosenthal, who is the CFO of Mips. The presentation today will be about the acquisition of KOROYD, but for me, it's much more than an acquisition. It's a merger of two great companies with two great brands and a very strong cultural fit. It is seldom that you can find really two complementary acquisitions with great strategic fit. But this one has, for sure, a lot of those elements.

And I will explain why in the coming part of the presentation. So I think first of all, it's important to look at the acquisition logic. Why are we doing this? Mips strategy is built on 3 pillars. As you remember, and actually, the acquisition of KOROYD strengthens 2 out of 3, which is, of course, great.

Yes, there's a reminder of what is our strategy. Of course, the most important one so far has been about growing our existing business of rotation protection solutions in helmets for sports motor and our safety category.

Second has been to capture new opportunities within helmet and safety. And there, of course, KOROYD ticks that box and, of course, opening up new channels and new markets, and it does tick also those boxes. So really 2 out of 3, which is normally a great fit. And then indeed, KOROYD has a lot of similarities to Mips, vision and purpose driven to make active life safer, market leader within its niche, ingredient brand trusted by consumers and leading product brands, science and technology-driven companies, world-class testing and simulation capabilities scalable, asset-light supply chain and high EBIT margin despite a significant R&D spend and investment in product development. This could be Mips and very similar to what we do.

And then, of course, KOROYD, it will continue to operate as an own brand. We think the team has done it great. And of course, we will continue to support them on that journey. There is a very current, strong, very capable leadership and operational team that will continue to drive the KOROYD business. But of course, both brand teams see many synergy opportunities on product development and product portfolio expansion. And we will talk a little bit more of that coming slides.

I think it's always important to start with the history to understand a company, and of course, KOROYD has a great history. It started and was founded in 2010 by the founder, John Lloyd. Then in 2012, the first product came out with KOROYD, which was actually a Nitro superlight snowboard, which was, of course, game changing in this industry and a game changer when it came.

In 2013, they launched their first bike helmet with KOROYD, which was together with the Smith brand. And 2015, the first Skis with KOROYD dampening was launched with Salomon. In 2017, the first motor helmet with KOROYD was launched to the market with KLIM. And then in 2019, the first award winning mountain bike helmet with both Mips and KOROYD was launched with the brand Endura. In 2021, the first Child Car Seat with KOROYD, Uppababy was the brands that launched that.

And then, of course, in 2023, KOROYD hand protection for gloves was introduced. And then in 2024, the first type II full-brim helmet with KOROYD was launched on the market, which has been a great success. And then in 2025, body protection was introduced to the market. And of course, this say something KOROYD has always stayed very curious, but it also shows how versatile the technology is and the many application areas it could address.

And I think also important to understand what is the basic of the technology, KOROYD is very technology-driven similar to Mips and to really understand what they do, it's really important to understand what the technology does. So KOROYD and energy-absorbing technology built from thermally welded extruded tubes that crumble on impact. So it actually collapses that impact, and you can manage density in a very versatile way.

So if you want to manage a tougher impact, then you need to make the density harder, of course, and a softer impact, then you make it softer. So really a lot of great advantages when it comes to energy absorption. And that, of course, is why we have the presentation today.

If we then look at their product portfolio, and this is, of course, only 3 out of in 5 total areas. But today their main business is on what we call the KOROYD original. So the original business, and that was what I just explained, which is, of course, applications for helmets, child restraint system and ballistic vests and that's very much on energy absorption.

And then the second one, which is a very interesting area for us when it comes to body protection. And when we talk about the body protection market, it's, of course, enormous. It's actually bigger than the helmet market in total with a lot of different areas of application. And there, of course, KOROYD has developed a unique body armor with a patented structure and also custom TPE formulation which is, of course, a thermoplastic elastomer, which makes it really good to manage energy. At the same time, it maintains an extremely high ventilation and also flexibility, which also makes the product unique on the market.

And also explains why it has been received in such a great way, especially in reviews, but most important also by the end user.

And then the third area, which is also completely new to Mips, which is KOROYD Plus which is a glove system. It can be used in other areas, but today, it's used in gloves where they combined the KOROYD tubular technology with a flexible elastomer to manage energy and reduce hand fatigue. So a really glove for heavy-duty work, but still maintaining flexibility, which not a lot of other products can manage today. So just an example of 3 great product areas where KOROYD is making an expansion in today.

If we look at the business model and the way the business is structured, of course, KOROYD operates as an ingredient brand in close partnership with a leading product brands. They have a large share of the staff work in R&D and product development, 11 out of 25 employees in total. And of course, they have a state-of-the-art test facilities in Monaco, really strong innovative product portfolio with, of course, supported by heavy IP protection and our production is outsourced to trusted long-term supply partners, where KOROYD the key manufacturing equipment at core product suppliers in Europe and post-processing and molding located geographically very close to the customers.

If we look at the sales split, today, the biggest part of the business is safety, so 58%. Then if we look at the other product category, which is sport and family, 37% and then 5% being in the motorcycle business.

I will then hand over to Karin, which will talk a little bit about that transaction and a bit of the financial summary.

Good afternoon. I'm Karin Rosenthal, CFO of Mips. And looking at the financials in the transaction, the purchase price amounts to EUR 40 million on a cash and debt-free basis and that corresponds to a multiple of 8x on adjusted EBITDA for 2025. And in addition, the sellers also have the possibility of an additional earn-out of up to EUR 25 million, corresponding to a total multiple of 13x adjusted EBITDA.

The transaction will be financed through a combination of existing cash and a credit facility. The acquisition is expected to contribute positively to Mips earnings per share, the EBIT and also the sales growth, both on the long-term and short-term basis. The acquisition is conditional upon Mips entering into financial agreement regarding the credit facility and also other customary conditions, and it is expected to be completed during December 2025. And then I hand over to you again, Max.

So if we then look at the vision, culture and the strategic fit, which is, of course, the most important things. If we start with the vision of the company, of course, Mips vision is to reduce head injuries and save more lives. And of course, KOROYD protecting life in Motion is 2 visions that resonates very well with each other. And of course, that's a very good start. If we then look on how the companies are structured, as you know, from Mips, we are heavy in engineers, especially in product development and R&D with almost 60 people working in that functions, of course. Similar to KOROYD, if the size of the business, they today have 11 people in product development and R&D. So also very innovation focused.

Both companies, of course, have products that has been internationally validated by third-party testing and of course, by numerous product brands. And then, of course, both have unique capabilities with advanced simulation and also a state-of-the-art validation in their own test labs. So a lot of similarities and very purpose-driven companies with great innovation focus.

If we then look at the customers' position today, of course, Mips has a unique position with more than 150 brands as partners today. KOROYD has about 25. And of course, we have a fantastic possibility of a great overlap between the 2 companies. KOROYD has a very close relationship with a lot of their customers. Mips has a lot of great customers. And of course, that will be a great customer fit for a lot of our partners.

So if we then summarize the acquisition and a little bit where I almost started, strategic fit, great. We really tick 2 out of the 3 most important boxes, which is, of course, our strategic ambition. If we look at the company as such, a lot of similarities to Mips, very vision and purpose-driven to make active life safer. That's why we do it. And then, of course, really important, we will continue a 2-brand strategy. KOROYD will continue to operate as an own brand. And of course, then we will collaborate and leverage our synergies where it makes sense. At first glimpse, of course, in product development, having even more integrated products together and then, of course, marketing where we also see a lot of synergies.

With that, we will end the actual presentation, but of course, open up for questions.

[Operator Instructions]

And now we're going to take our first question on audio line and it comes from the line of Carl Deijenberg from DNB Carnegie.

So first question is on Slide #9. Just curious why the revenue growth has been -- we've seen such an uplift here year-to-date in 2025 relative to previous years. Is that similar to what you've seen in Mips as well with the sort of production rates coming back? Or is there any definite sort of product launches or yes?

No, I think, I mean, it's two different things, of course. First of all, it's a very successful business. They have had a lot of success in the safety category. And of course, that has been ramping up a lot of the growth. And then as other brands in our industries, we see that inventory situation has also normalized and that, of course, also fueled growth.

Okay. Great. Then I also wanted to ask a little bit on the sort of mix relative to your own mix. Obviously, KOROYD has a much, let's say, tangible mix relative to safety. And I just wonder if you could spend some time on talking about the history behind this and yes, did you enter this space much later relative to them? Or yes, could you give a little bit of the sort of background here? Because obviously, the expansion into safety is one which is quite important for Mips as well. So I just wanted to understand that.

No, I think -- I mean, first of all, of course, their solutions into the safety space is a little bit different because, of course, they make a bigger part of the product in safety. And they, of course, also have been very successful in the full-brim assortment where Mips is launching the first products now. And there, of course, you see that, that has generated a lot of growth. So they have done it really, really well. And we are, of course, launching similar type of products in the full-brim area.

Okay. Great. Then I also wanted to ask on Slide #12. I mean, you highlight these brands where you have a sort of already overlapping partnership in one sense. And is it possible -- I just wanted to understand sort of on also a model level, how much -- I mean, I understand that these brands seem to be more sort of bike-oriented relative to the other ones that I can see on this list. But could you talk a little bit about sort of model penetration? Also maybe how many models for these 6 brands together do you have both the Mips and KOROYD solution integrated in one piece?

Yes. I think the most -- the one that has the most penetration, of course, is the Smith brand, where you will see Mips and KOROYD solutions in most of their product portfolio, actually. I would say that's the one with the heaviest use of both products and so on. And then on the others, you see sometimes it's Mips, sometimes it's only KOROYD and sometimes it's a combination of the two.

Great. And just also finally, I see that you're not sort of specifying too much on the earn-out component of EUR 25 million. But yes, anything on timing and maybe sort of what is this based upon? Is this growth, profitability or both? And maybe what kind of growth rates do we have to see to reach this EUR 25 million to be fully paid out?

So we haven't quantified that. What we have said during the discussion, of course, we see a great potential of the collaboration. And with that collaboration, of course, you also share the risk. So the risk going forward is then shared through the earn-out. And of course, if we generate a lot of value, which we believe we are going to do, of course, we are prepared to share that.

When it comes to an earn-out structure that we appreciate, of course, the main focus of Mips is, of course, to deliver substantial growth. So that's one and the key element of the earnout. And then if you look at the second part, of course, making profitable growth is also important. So then you can guess that, that's the second part of the earn-out. And then, of course, there are two areas where we see great expansion opportunities. And that's, of course, is in body protection and gloves. So of course, there, we also see an element in the earn-out. So we have structured it in a way we think makes sense. And then, of course, earn-out models normally spans across a couple of years. And of course, that's the same in this situation.

And the question comes from the line of Alexander Siljestrom from Pareto.

Congrats on the acquisition. So I was just wondering if you could talk a little bit about the cross-selling opportunities that you see, especially maybe in sports for KOROYD and then maybe in safety for Mips as well.

Yes. I think there is a great cross-selling opportunity. I would phrase it probably a little bit different, I would say, a more integrated solution because if you look at Mips, we have been extremely successful when it comes to rotational protection, KOROYD has been very successful when it comes to the linear protection. And of course, both of these safety aspects are needed into a helmet. And when you can combine the two, then, of course, you can create a lot more complete helmet systems.

So I would say that developing a lot more complete systems will be a great expansion possibility. And it also makes a lot of sense for the customers where we can do much more of the helmet than we have done before.

Okay. That's interesting. And then maybe just on KOROYD sales mix in sports, what's sort of the bike versus snow share? Are they stronger or on snow? Or how does that look?

Yes. The strongest subcategory as we call it, is in snow. Yes, that's correct.

Okay. Cool. And then maybe on the patent situation, if you can expand on that. And also, you mentioned that they invest quite heavily in R&D over the P&L. Would you be able to share the share of sales in terms of R&D spend? Does it align with Mips?

Yes. So I think, first of all, when it comes to the patent protection, of course, the main protection comes from application patents or specific solutions and special protection for specific solutions because, of course, KOROYD is material technology. And of course, the right integration of that is key, and that's what they have been extremely successful in protecting.

And then the second part is, of course, when it comes to the manufacturing process because, of course, when you have a material, you also want to make sure that, that is mounted correctly into helmet. So those are the two key areas which they have protected today. And of course, they have quite a long runway for those patents.

Cool. And the R&D in terms of sales, would you be able to share that?

Yes. We have not disclosed that, but given that you see that they have quite a big proportion of the total staff in product development and sales -- sales -- product development and R&D, you could expect that it's similar or a little bit higher than we have in Mips.

Okay. And then maybe a final one, just on the business model. I guess this is also a royalty-based business model, if you can confirm that? And also, is the gross margin also aligning with Mips at plus 70%?

So I think when it comes to the business model as such is a license model similar to Mips and of course, revenue is recorded on delivery. And then when it comes to profitability, it is gross margin that is below Mips, but still a very profitable company.

Okay. Cool. Maybe a final one just on the growth outlook and what you see there? Do you expect KOROYD to be able to deliver a sales CAGR ahead in line with what you have as a target for Mips? Or is it lower or higher?

No, I think there are great sales opportunities. That's also, of course, why we have the earn-out mechanism. I think we have managed during this process, of course, identified a lot of growth opportunities. So historically, they have been growing with a CAGR of 15%. Of course, we expect to accelerate that.

And now we take our next question and the question comes from the line of Emanuel Jansson from Danske Bank.

Hope you can hear me. Firstly, I would like to -- I wonder if you can shed some light. I mean, looking at the top line performance from KOROYD has been quite solid in a quite uncertain time period. But it is also -- are you also able to shed some light on how the 2021 figure was and how they have experienced the whole turbulent situation since the pandemic?

No, sorry, we haven't disclosed that number. But as most brands, of course, you saw quite a good uptick in Bicycle. But of course, they also serve other categories. So no, we haven't disclosed that, but my assumption is that they saw a strong performance also there, like most other in our industry.

Great. And regarding synergies on your cost base, could you maybe elaborate a little bit more what you can do on, for example, on R&D and marketing going forward?

So the business case assumes zero in savings. And the reason for that is, of course, first of all, we would like to grow the business and so on. I think the key synergies will come from learning from each other and, of course, developing joint solutions and so on. So no, we haven't put anything when it comes to savings opportunities from synergies. We expect to increase our spend to make sure that we also develop even better product in the future.

Interesting. And also moving a bit on the sales split, is it also possible to give some light on the geographical exposure from KOROYD? Is it mainly U.S. or Europe or...?

Yes. So today, they have a strong exposure to the U.S. market. Of course, their main customer in Safety Studson has a big exposure on the U.S. market. And then, of course, Smith being a strong customer. So mainly in the U.S.

I see, I see. And given that they have spent a lot on R&D, do they have like a big -- similar as Smith, do they have a big pipeline of new products entering the market in 2026? And have they been able to grow nicely on a number of models per customer as of today? And what's like the average number of models per customer?

I don't have the average number of models per customer. The model is slightly different. But I think, I mean, the way we look at when we would like to invest in a company like KOROYD, first of all, we look, of course, at the long-term potential. Is that there? Yes, it is. Where do we see the great opportunities and potential, of course, in what we call the KOROYD original business, really good product. In combination with Mips, I can think we can really create a fantastic product. The lightness of the KOROYD product is fantastic. I mean the product consists of 95% air, which is, of course, lighter than anything else.

And then, of course, creating unique structures together also with our material technology team, I think we can really create a lot of solutions. That will be a great potential for growth. Then when it comes to the body protection areas, I think also if you look at all the reviews and product reviews, they have really got fantastic review results, and we see a great opportunity to continue to grow there. Of course, when we looked into this, we also looked at a lot of other providers in body protection. And by far, the best reviews that we have seen are with the KOROYD product.

So really a great consumer offering. And of course, we expect that to take off quite well. And then, of course, the completely new area for us, which is then the gloves which are really another interesting area for us that we haven't explored. So yes, for sure, there is a lot of product coming. And these are, of course, the three areas which we have disclosed. But of course, they have done a lot more. And I think what they have also been extremely good at, like I said, staying curious, but also being very creative in really utilizing their technologies in the best possible way, just having the versatility of going to snowboards, skis, baby seats and so on, gloves, you have like a lot of different application areas. So I don't think there is a lack of opportunity for growth going forward.

That's really interesting. And maybe a last question from my side regarding safety then. Do you think that we will see a coexisting within safety helmet in the near term with both the systems in the short term? Or how you think the Mips safety will develop compared to Car now here in the coming 1- to 3-year period?

No, I think, I mean, there is no reason why we shouldn't have the two brands in the helmet. Short term, of course, I don't know what you mean with short term. But I think within a reasonable period like maybe a year, you will probably see combined solutions of the two also in safety helmet.

And could you possibly maybe give us a figure on what the average selling price for that helmet will be?

No, I can't. But I think, I mean, if you combine two great products, of course, we have our technology, which we have a license fee. And of course, that we will continue to charge and KOROYD also have a great product, and they also have a license fee. So it will be a combination of the two.

Yes. Okay. Great. And sorry, maybe lastly, the founder, John Lloyd, will he stay with the company for -- or how will the transition go?

Yes. So at the moment, he is part of the management team and so on and will support the business going forward. And of course, he is very keen on staying and making sure that he can deliver the earn-out.

To the management team for any written questions.

Yes. So the first question is, are you considering further ingredient brand acquisition opportunities in impact protection? If so, who would you consider as businesses of interest?

I think we have looked at a lot of different acquisition opportunities. There is a lot of companies for sale out there. We don't buy companies just because they are for sale. We are really interesting in the companies with the great and best products. I think we really have a very good fit when it comes to that in the KOROYD. Business, of course. And then, of course, if it can also complement our strategy in the way it does, then, of course, ticking all the boxes, like I explained on my summary slide, there are not a lot of companies that actually do that.

So I think it's a very complementary acquisition to what we have today. And of course, we are constantly looking for new opportunities. But I think also the focus for us is organic growth. And then we just partner up with a great company. Let's make sure we do that well first.

Then, of course, when does the most important patent expire?

Of course, when it comes to the KOROYD portfolio, of course, they have a big product portfolio. And like I said, there is application patents, which is for specific solutions. So if you look at what they are selling today, mainly around 2033 until 2040.

Then the overlap between the customers, I think we spoke a bit a little bit of. And then can you provide any more detail on the credit facility element of this transaction, the quantum of credit facility?

So as we said, we have a revolving facility. Today, Mips has SEK 280 million in cash on the balance sheet. So of course, we have quite a big proportion of cash. And of course, we will utilize that in the most capital-efficient way. If there is a need to call for more of the revolving facility, then, of course, there is two really good and strong cash-generating units in both Mips and KOROYD. So of course, that will also generate cash as we go.

Do you think that KOROYD's growth in safety will limit Mips potential in the category given the available cost structure for each helmet?

No, I don't. I think there is as big opportunity as before. Sometimes you will have solutions or helmets with Mips, sometimes only with KOROYD. And I hope, in most cases, a combination of the two. And then when it comes to assessing the size of the market for KOROYD comparable to our own TAM, I think it all depends on which market you are going for. And of course, as KOROYD is a premium solution on the market today, of course, you have a smaller addressable area because, of course, they have offered their product to premium solutions today or premium helmets today. So of course, that restricts a bit of the market.

We don't have an exact number for that, but of course, it's a smaller size versus Mips because of the customer offering that they have.

And then, of course, when it comes to what is the size of the body protection market, of course, you don't measure the body protection market in volume because, of course, you have so many different applications when it comes to body protection. First of all, you have what we mostly see, which is the whole area of sports where you are having that in bicycling, you are having that in skiing. Then, of course, you also have it in motorcycle. But the biggest area is actually the safety market. So it's very difficult to compare the two markets because they have a very different structure.

And then, of course, the last question that we got, will there be any integration or fusion between the KOROYD and the Mips teams? So at the moment, like I said, we are planning to run the companies separately. I hope that we can learn and collaborate a lot from each other, but there is no plan at the moment to integrate the two different functions or different companies together today.

Mips is operating out of Sweden and of course, KOROYD is operating out of Monaco. They have done it extremely successful. That's why we are having the discussion today, and we really want to leverage that and really utilize the best of both companies.

With that, I think we have answered all the questions that we have on the call. If there is any more questions, of course, you're always welcome to contact us. Thank you, everyone, for listening in, and we are really excited about this acquisition and have a nice weekend.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good day, and thank you for standing by. Welcome to the Mips Interim Report Third Quarter 2025 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to our first speaker today, Max Strandwitz. Please go ahead.

Thank you, operator. Good morning, everyone. My name is Max Strandwitz. I am the CEO of Mips. And with me today, I also have Karin Rosenthal, who is the CFO of Mips, and we will take you through the presentation of the Q3 2025 interim report.

And if we start with key highlights. It was good development with 19% organic growth in the third quarter. Good to see that we did deliver growth in all the categories we are in despite the challenging conditions, year-to-date organic growth now at 22%.

We did see very strong development in Europe with 73% growth, and this was the fourth consecutive quarter where we actually managed to deliver more than 50% growth in Europe. And of course, it's also great to see that we are delivering on our ambition but also that the proportion of sales getting higher from Europe and, of course, contributing to the whole growth agenda at Mips. U.S. market was a bit more challenging, but we actually managed to deliver a small organic growth also on that market and continue to gain market share.

The profitability also continue in the right direction. So we had a good underlying improvement in profitability. The decrease in EBIT that you saw in the quarter is fully explained by legal costs and ForEx headwinds. And actually, if we adjust for the legal costs in the quarter, we managed to deliver 42% EBIT margin. So clearly in line with our ambition to get back to the 50% EBIT margin, which is also our long-term target.

We have managed the erratic and uncertain communication around tariffs well, but we expect that there will continue to be some uncertainty for some time going forward. And we remain confident in our long-term strategy and our financial targets.

So if we start with a very short update on tariffs. The implementation of tariffs have brought uncertainty to the short-term outlook in all our three categories in the U.S. market. Price increases from helmet brands to mitigate the cost increases have started to have an effect on the U.S. market, and we see that they are effective from Q3 onwards.

We have also seen that helmet brands have started to relocate production outside of China to derisk potential impact of further tariffs. And of course, the main go-to country is Vietnam, but we also see factories opening up in other places in Asia to decrease the overall exposure from the China situation. And then, of course, we also expect that the uncertainty of tariffs is expected to continue also going forward.

If we look at Sports. We are happy to see that the progress continues. We had a good quarter with 8% net sales in Sports. Very strong growth in the European market. And here, we've actually managed to deliver 98% growth, which is of course a fantastic number. U.S. and Asia challenged by macro and geopolitical situation, so a little bit softer performance there, but still managed to gain market share.

And it's good to see also that we managed to deliver volume growth in bike for the eighth consecutive quarter in a row. Snow was slightly down in the quarter, more relating to phasing. If we look at the year-to-date performance, we still show strong growth in snow, which is good to see. And we remain positive on the outlook in the Sports category.

If we then look in Moto. Moto had a little bit soft quarter in last Q2 and, of course, with the impact coming from tariffs. And of course, we have quite a heavy exposure to the U.S. market, so it was good to see that the performance bounced back and that we managed to deliver 28% net sales growth in the quarter. And we did see good development in both the off and on-road subcategory.

Also during the quarter, we launched our new event concept at the MXGP competition in Lommel, Belgium to further increase our activation towards end consumers and, of course, in our brand story and also making sure that we bring the awareness up. We have started with a lot more to consumer marketing. We did invest in a trailer. And of course, we will be very active with that coming year to make sure that we also bring the end consumer awareness up. And this was clearly a good test and shows that it's of course in the right direction and what we want to do on the market.

No change to the long-term outlook. Good opportunity to continue to grow in Moto.

In Safety, we saw a little bit more moderate performance with 26% growth in the quarter. Moderate sales in the quarter was driven by uncertainty from the implementation of tariffs and cost increases with some delays in ordering. If we look at the underlying in-market performance with new brands and new products, we actually see good performance. It's important to realize that about 90% of our sales in Safety goes to the U.S. market and, therefore, of course, the tariffs and the cost impact is significant.

It was good to see in NSC safety show that we actually got listed for four helmets to the Best in Show, and actually one of the helmet managed to get awarded Best in Show. And that clearly demonstrates how strong the product portfolio that we have coming in safety. And of course, disappointing to see the performance in the quarter, but we have a long-term ambition that remains unchanged. And the soft sales that we saw in the quarter, we expect that to be temporary.

So if we then summarize the development in the different categories. We start with Sports. Good performance despite a very challenging environment, really happy to see the 98% growth that we had in Sports. Moto, good to see that we bounced back in the way we did with good performance in both off and on-road. And of course, Safety, disappointing but, of course, more to come.

And with that, I hand over to Karin.

Good morning. I'm Karin Rosenthal. I'm CFO of Mips, and I will take you through the financial part of the presentation.

We saw good development in the third quarter with an increase in the net sales of 10%. And adjusting for FX due to a weaker U.S. dollar versus SEK, net sales increased 19% organically. Gross profit increased with 11% and we saw a strong gross margin of 74.2% versus 73.4% last year. And the increase is mainly explained by the sales mix.

We had a good underlying improvement in our profitability year-over-year. EBIT was down 7% to SEK 44 million, fully explained by legal costs and ForEx. And the EBIT margin decreased by 6 percentage points to 32.6% versus 38.5% last year. And excluding the legal costs, EBIT margin was 42.1%.

In OpEx, the higher spend was fully explained by the legal costs of SEK 13 million in the quarter, and we continue to invest in our strategic priorities. We had a good operating cash flow of SEK 41 million in the quarter. And looking at the financial KPIs: 19% organic growth, 33% EBIT margin and SEK 41 million in operating cash flow.

If we then look at the development for the first 9 months. Net sales increased with 14% and, adjusting for FX due to a strong SEK versus U.S. dollar, net sales increased 22% organically. Gross profit increased with 16% and we had a gross margin of 73.6% versus 72.3% last year. And the increase is mainly explained by sales mix.

And we have underlying improvement in the profitability. EBIT was down 4% to SEK 109 million, and that's fully explained by the legal costs and the ForEx. EBIT margin decreased 5.1 percentage points to 28.2% versus 33.3%. And excluding legal costs, EBIT margin for the first 9 months amounted to 37.5%.

In OpEx, the higher spend was fully explained by legal costs of SEK 36 million, and we continue to invest in strategic priorities, marketing and R&D. We had a really strong operating cash flow of SEK 96 million. Financial KPIs: 22% organic growth, EBIT margin of 28% and SEK 96 million in operating cash flow.

If we then look at the balance sheet and cash flow. We have a strong cash position with cash and cash equivalents of SEK 280 million. And just to remind you that Mips don't hold any loans. We paid out dividend of SEK 172 million in May, corresponding to SEK 6.5 per share. And operating cash flow in the quarter was SEK 41 million, and we had the equity ratio of 86%.

And then I hand back to you, Max.

Yes. Thank you, Karin. So if we then summarize the quarter. Good development in the quarter with growth in all the three categories despite the challenging conditions. Really happy with the performance in Europe and that Europe is really starting to take off. We do expect the positive progress to continue with less hampering effects from tariffs, of course.

We did see good underlying improvement in profitability. The decrease that we saw was fully explained by legal costs and ForEx headwind which is, of course, quite heavy at the moment. If we adjust for legal costs, 42% EBIT in the quarter. If we look at the last rolling 12 months, we are at 39%. So of course, we see a good recovery of profitability and we remain positive on our long-term outlook and the delivery of our financial targets.

And with that, we open up for questions.

[Operator Instructions] And now we're going to take our first question, and it comes from the line of Adela Dashian from Jefferies.

A couple of questions from me. Firstly, on the commentary around the exposure to the U.S. in the Safety category and the tariff headwinds that's impacting progress there. At this point, I mean, how fast should are you expecting a stronger volume ramp-up in the Safety category? Are you still tracking the doubling every 6 to 12 months? Or are you seeing any reason to, I guess, revise that guidance given the near-term headwinds?

Yes. I think it's important to differentiate with two things: one is our underlying performance in the Safety category, what we're doing and the progress that we are making; and then, of course, recognizing that tariffs has an impact.

Helmet is normally not the biggest part of the safety companies that we are working with. Sometimes they get back in the queue because, of course, they are a smaller proportion of their total sales. And then, of course, if you add Mips to that, sometimes you get down prioritized. That's a reality we need to live with. We expect that to be temporary.

And like you see also in NSC, we had four new helmets that was awarded or listed for Best in Show. So we have a great product portfolio. So the things that we have under our control does not change by 1 or 2 quarters. But of course, you also have to recognize reality. The last 2 quarters has not been at the momentum we expect. We do believe that we are going back to the momentum of doubling our sales every 6 to 12 months and we expect that to happen within 1 to 2 quarters, so clearly going and starting to accelerate the sales.

When we started the year, we didn't plan to have the impact of the tariffs that we are seeing. So I would say, yes, it's temporary. And no change to our long-term ambition and our projection of the Safety category, but clearly, the last 2 quarters has been a bump on the road.

I see. And maybe going into the fourth quarter, which is an important bike helmet production quarter for you or your customers. What kind of, I guess, early indications do you have of a more normalized quarter given all the external factors that's impacting the entire value chain?

Yes. I mean, there is a lot of external factors. Of course, we had that in Q3 also. We said that we expected Q3 to be progress against Q2 because, of course, we said that we start to see a more normalizing effect. We also already then said that we expect Q4 to be progress against Q3. And of course, that's what we are seeing.

We are also seeing that, of course, Europe is doing really, really well. It's also great to see that our proportion of total sales going to Europe has increased quite a lot. And of course, if you have 4 consecutive quarters in a row with more than 50% growth, then it becomes a more material impact. And also if you look at the last quarter and also this year, we're starting to get -- Europe starts to get a lot more important with actually now hitting 40% of the total sales of Mips. So of course, with that part growing, it also has a more material impact on the total growth.

The U.S. market, a little bit soft. And of course, we hope that, that will recover. But also that, of course, during the whole tariff situation that we have experienced during the last 2 quarters, no one bought more than they exactly needed. Now we are going into next season and, of course, everyone needs to start building stock for that. Then Asia, even though it's not a huge proportion of our sales, there, we see a very soft consumer and especially relating to the China market.

So the key driver of the growth that you will see in Q4 and we expect progress against Q3 is really coming from the really strong performance that we are seeing in Europe. We don't expect a lot of help from the other markets.

Got it. And could you please confirm, to your knowledge, what the inventory levels at the retail channels look like at the moment in the three regions?

I can say that when it comes to U.S., normally they have been running their business normally on somewhere around 2 months inventory. At the moment, we believe it's lower but it's difficult to get exact numbers at the moment. We're adjusting between two data sets between the Q2 market data and the Q3 market data that will be delivered in about a week. But from what we heard from the last data, they are rather on the low side rather than on the high side in the U.S.

Europe is very depending on the countries. Germany and France has been doing quite well. Nordics, still a very hesitant buyer. And then, of course, when it comes to South of Europe, our proportion is not exactly that big but it's also not that much data available. So I would say the powerhouse of Europe at the moment is really the sales that we see in Germany and also partly in France.

Asia, there, it's very mixed performance when it comes to China. China, we have seen extremely positive development in the last year. A little bit of a break during this year because, of course, we also see that the consumer is a little bit more hesitant. But at the same time, we are seeing that the acceptance on the Chinese market of Mips product is a lot higher than we expected. The addressable market is a lot higher than we expected. And of course, we are making a plan to make sure that we address that in an appropriate way. So a little bit mixed performance, mixed inventory levels on the different markets.

Got it. And then lastly, if I may, on the legal costs -- and maybe also if you have any update to share about the actual dispute, like any details on that you haven't shared previously.

And then just on the legal costs, they were basically in line with expectations in Q3. And I believe you've earlier guided for a similar development in the fourth quarter as well. How do you perceive this going into 2026?

Yes. So like we said before, no update on the legal dispute as such, still very much in preparatory phase. And that's why we already now could say that we would have a similar type of cost in Q4. Then, of course, we are going into much more of a court scheduling procedure. So in at least the first part of '26, we expect the cost to go down because then, of course, you will not have the same level of preparation if not something changes dramatically or you go for a different direction.

But at least as we know now, during court scheduling and so on, there will not be a lot of cost incurred because the preparation has been done and of course you are waiting for the next steps in the process as such. So for Q4, expect similar kind of spending that we see now. And then, of course, as you go into 2026, you can expect the cost to go down.

And just to be clear, the Mips technology is still not named in this dispute.

Yes. So Mips technology is not named in the dispute. It's not part of the dispute. And Mips as a company is also not part of the dispute.

And the question comes from the line of Daniel Thorsson from ABG Sundal Collier.

Yes. A couple of my questions already covered here. But I have a question, if it makes you worried when you see the current declining sales from the likes of Giant and Merida in Taiwan but also forecast downgrades from Shimano on the full year, that there is an upcoming potential weakness in the market that may hit you at some point in time? Or do you feel comfortable that you are entirely different from these players?

That's a good question. I think, I mean, I am constantly nervous of the market development and what's happening, of course. But it's also my role to make sure that we navigate in the best possible way. So I think with bad opportunities also comes good business, I think. So of course, we have a balance sheet we can afford to invest, we can afford to accelerate in other areas, and that's what we are doing.

I see the Giant performance, of course, with drops in sales of negative 20% to 30%. I saw the revision of Shimano, which is, of course, also worrying and so on. So I think when it comes to bike sales, especially relating to the U.S. market, we don't expect that to be very strong, at least for the coming 1 to 2 years.

There is still an opportunity to sell helmets, of course. And then, of course, we also need to find great solutions like aftermarket products or other ways to drive mix, and that's what we have managed successfully so far. We have not really had the market with us in the last 2 years but still managed to grow anyway. I believe we can continue to do that successfully.

Then in Europe, it's a little bit of a different story because the European market has not been growing for the last, I would say, 3 to 4 years. We have still managed to grow in that market. The reason why we are growing with exceptional numbers at the moment is that we increased the proportion of Mips of the total sales in Europe. So it's more coming from penetration rather than positive market development.

I think everyone is now waiting for the consumer in Europe to wake up. If it wakes up, really, really great. We saw also the guidance of BIKE24, where they are also doing really well on the market and especially in Germany. So I think Europe is much more a penetration story, and that's really what drives us.

And then when it comes to the whole Asia situation, we, of course, see a weak consumer in -- or I would say, a more hesitant consumer in Asia, especially relating to China with the whole situation on property prices, really making sure that they have a lot of cash on hand. Of course, the government in China is putting a lot of consumer incentives in place to make sure that the spending goes up. We also see that bike sales in China is going up. So I'm not that worried about that market and actually expect that to turn around.

So I would really say that are we worried about the bike sales? Yes, in U.S., it's still very, very soft. In Europe, you see a fantastic development in e-bike sales, and that's really what maintaining and really driving the sales of the European market. And with e-bike, you normally have a higher proportion of sales with the helmet and the e-bike than you do with the traditional bikes.

So you also see that a lot of the riders, they tend to wear a helmet when they ride an e-bike because they get access to a different velocity rather than when they are jumping on a normal bike just going to the grocery shop to buy some milk and so on. So there is positives and negatives. But that's my role, to make sure that we navigate in that area in the best possible way. Sorry for a long answer.

No problem. Just a final one on Safety then. We heard your answers here on ramp-up, but most of the sales are in the U.S. today and affected by tariffs, obviously, this year. But I see more and more design wins in Europe and products coming out in the market late '25, like the new Guardio helmet, for example, when we look at channel checks. Do you see U.S. or Europe being the main driver for Safety sales in '26 for you?

No, I still think that Europe will be the second market for us. U.S. is a perfect market. You have a price point. You have a customer that's really up for making sure that they want to have a better offering. The European construction market is still, I wouldn't say under recession but probably that's the right word. It's very compressed at the moment. So you don't see the spending going up that shortly.

We have still managed to grow really, really nice, especially with Guardio in Europe. I think they are doing a fantastic job. In Sweden, we see great performance from them, Norway, Finland. And of course, we see that they are accelerating their sales also elsewhere. So that helps a lot. And then, of course, we have uvex and some other product wins. And of course, there will be more.

In November, you will also have A+A, which is the biggest construction fair in the world. That's only every second year. And there, of course, you will see more design wins with Mips. So I'm not that worried about Europe but I think it will take longer. The powerhouse of our growth will really be the U.S. market, at least for 2026.

And the question comes from line of Emanuel Jansson from Danske Bank.

Jumping back to the U.S. market here in the near term. I mean, we have seen organic growth here for the last couple of 2 quarters around 0 to slightly positive. Should we anticipate a similar trend in the near term? Or should we expect maybe a potential slight acceleration in sales in the U.S.?

No, I think, I mean, we have managed to deliver organic growth in the U.S. market the last quarter, even though the market has been down. If we look at the last reported quarter numbers from the market, so not Mips sales but the market data, you saw that our addressable market was down with around 7%, which, of course, if we manage to deliver organic growth on that market, I am happy.

So for the time being, as long as we stay on organic growth in the U.S. market, I'm happy. And that, of course, means that we continue to gain a lot of market share if the market is shrinking and we are delivering organic growth. And it's also important, we have not increased prices. So our organic growth is through volume growth, which is, of course, different from what some others are reporting. So for us, we are really happy if we can deliver organic volume growth on the U.S. market in the coming quarters.

Okay. That's great to hear. And as well, what factors should we primarily expect to drive mix growth within the bike segments in the U.S. during 2026 then? Is it primarily gained market shares? Or...

Yes. I think everyone is hoping the market to turn around. And I also hope, but hope it doesn't bring me anywhere. So I think probably there could be flat to a little bit positive market in the U.S. next year. We will continue to gain market share, of course, which is good. So of course, if you do the calculation, you will realize that a little bit on the positive for Mips on the U.S. market next year.

Yes. Okay. That's great. And jumping to the European markets, which, of course, impressive growth in this quarter. And also here, looking in the near term -- looking at Q4 last year, Europe grew pretty well, if I remember correctly. Is it fair to assume similar growth trends in the near term as we saw in Q3?

Yes. Normally we don't guide, of course, on individual regions and growth and so on but, of course, we have had 4 quarters with exceptional growth, more than 50%. So we hope to stay with that momentum. You will probably have quarters that will be higher or quarters that will be a little bit lower. But over time, to deliver on our ambition, that's what we need to do and that's what we are set up to do.

And we also have, of course, a couple of initiatives that we have installed to really make sure that we deliver on that ambition. In Germany, we have a massive program to make sure that we increase awareness in Germany. Today, we have only 17% awareness of the non-Mips customers, so the consumers in Germany. We want to drive that to 30%, of course. And we have a massive program to do that. When we get to 30%, then, of course, we go to France, do the same journey again. So really having a big support program and that, of course, is what's also driving the growth in Europe.

And that's also -- why is this happening now? And of course, we have had a European program for some time. We were hampered a bit a couple of years ago with the whole inventory situation. When that normalized, of course, a lot of that work that we have done, we benefited a lot. So when all the retailers and customers are buying new helmets, the proportion of Mips is a lot higher than they were pre-pandemic and also during the pandemic situation. So the work there really starts to pay off.

Okay. That's great to hear as well. And I assume then, in general, in feedback, what you're receiving from your customers' customers, so the manufacturers, are they anticipating growth for the 2026 bike season? Or is that a big variation between U.S. market then and Europe?

Yes. I would say, in general, yes, every bike helmet manufacturer expect growth, and that's really positive to hear. But you also have or need to be a bit realistic. I don't think everyone will grow. But I would expect, if you take the global position, I think the overall helmet market sales will increase a little bit during the year. And I think that's the assumption from everyone. But that doesn't mean that every helmet brand will grow.

We see especially Asia will probably grow quite decently. You see that the awareness about safety is increasing, but also a lot of helmet regulation is pushing helmet wearing and so on. Europe, you also see a positive trend there. And there, we also actually believe that with the lower interest rate, lower energy costs and so on, that the consumer is coming back in a different way than we assume on the U.S. market. So that helps a lot.

Great. And maybe a last question from my side. Regarding the improved gross margin, can you maybe provide more information on the positive mix effect here? What was driving the gross margin?

Yes. So I mean, normally when the U.S. dollar rate goes down as it has done, of course, we are happy to really defend the margin. But of course, we are growing in volumes. So you get some volume benefits but also some mix benefits. We have put a lot of money into driving innovation, making sure that we have more premium solutions and so on. And that, of course, starts to pay off, which we are happy to see.

Thank you. There are no further audio questions. Now we will proceed with any written questions. Max, over to you.

Yes. So during the quarter, there was a test published by Virginia Tech, which was a safety helmet test. And there is some questions about rotation in that test.

So there was a test method published by Virginia Tech in the quarter, which we are very happy to see. We really promote that there should be independent element testing on the market that helps everyone to have independent testing and to, of course, guiding their buying decisions.

This is, of course, not a complete test but it's including one test scenario. And it's a fall impact, so if you fall to a height and at a 25% angle, so that means that you fall almost straight to the ground.

When you do that, you don't introduce so much rotational forces, which is, of course, what Mips does, which you normally do if you trip or you slip where you're falling to the ground with an angle and a typical accident that Mips is trying to address.

When they announced this test, of course, ICEA (sic) [ ISEA ], which is sort of the regulatory body of the U.S., even commented and said that great that you have done a test. But it's not a complete test method representing all the different injury criteria in safety.

So that's what we really want them to do, to have a more complete test method including all the risks and all the different accident scenarios also including rotation, which we hope that they will add over time, which is also the similar way that it was introduced in bike. They normally started first with a straight test and then, of course, they also include rotational forces.

So I'm not worried about that. But of course, I'm not a very patient man. So the sooner, the better. And we hope that it will come soon so we can really explain all the benefits of Mips also in the safety category. But good that there is a test method. Hope that they include rotation as soon as possible.

Then, of course, I will just go through all the questions that has not been asked by the analysts. You note the performance of your Best in Show product at NSC Congress Expo the U.S. Believe this was the PIP helmet that has also integrated Quin solution alongside Mips and one of the first smart construction helmet. Are you seeing more demand to integrate these two solutions across your inbound demand for products? Can you talk a little bit more on the strategy here?

So first of all, yes, you're right. It was a combination of both Mips and Quin, which we really like to see. And that's also what you see in the Guardio helmet. So you start to see a lot more instances where they combine both Mips and, of course, the Quin technology. Normally, these brands are very dedicated to safety. They also want to have, of course, all the benefits of having a lot of data. That was also the reason why we invested in Quin because you get a lot of accident data, you get a much better understanding what happens in real life accidents. That's also construction companies wants to have and also safety helmet manufacturers.

So I think our strategy is, of course, to make sure that the Quin as a company can also benefit of all the great customer relationships that Mips has, but also that, of course, we can have a joint approach to the market. And really good to see that, that is working.

Then the next question is the launch of the new event concept at MXGP competition in Belgium is mentioned. Can we receive some more information about this event, and also the aim to review the possibilities of partnership and cooperation in the field of helmet safety?

So we did as, I also said in the presentation, launched our new trailer concept, and that trailer concept is a very flexible concept. You can go to a lot of different events at the low cost. And that, of course, is the intention of the investment. Why are we doing that? Because we see, as we increase awareness of Mips, of course, we need to prepare to have a facing towards the consumer.

This was a trial that we did because, of course, we really want to make sure that we have a presentation that is fit for the consumer. This was the first event. Next year, we are planning 10 to 12 of these events. So we will be going all around Europe to really make sure that we start to educate the end consumer in a very different way than we have done before.

Then we also got some question, do you have any cause for concern over competitors following the launch of the RLS technology?

And just to remind everyone, RLS is a technology that took the two 1st positions on Virginia Tech bike helmet testing in the quarter. It's a technology where the outer shell releases during impact. It's not a new technology. That technology has been on the market since 2019.

Mips has similar type of technologies where you have an outer shell that releases during impact. We took the decision not to release that technology with having an outer shell that releases because, of course, depending on what type of impact you have, it doesn't fit for all type of accidents, but also that it's not fit for every type of helmet or depending on how you're managing the helmet and so on.

That's the decision we took as a company. Not to say anything about RLS because, of course, when you have an outer shell that releases during a test, you see a good redirecting of energies. And that's why they can achieve a good result. This is for sure not the last helmet that will be on the first place on the market. In most cases, it has been a Mips helmet. We will make sure that we get a Mips helmet there. And sometimes it will be a non-Mips element.

I think that's the whole reason of having a test, that you compete for the first position. And of course, as I am a very competitive man, we will continue to chase for the first position and, of course, have a good plan of getting there.

In terms of do we see them as a competitor, I think it's great that you have technology that is inspiring everyone to make better products, also get more creative thinking and so on. Market is big enough. I have always said that I believe that there will be more competition. So great to see that they are upping their game and so on.

Of course, calling them a competitor yet with only two helmets on the market so far, I believe there will be for sure more helmets coming out, it's still a little bit early. Mips has a little bit more than 1,000 helmets on the market and, of course, a fantastic position. Of course, also when we talk about awareness, the consumer knows what Mips is and of course we have a great brand position. I'm sure that over time, RLS can probably build that too. But of course, I think we have a good head start.

Then I think we have most of the questions answered already. Thank you, everyone, to listening into the call. And speak to you again in February. Thank you, everyone.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good day, and thank you for standing by. Welcome to the Mips Interim Report Second Quarter 2025 Webcast and Conference Call. [Operator Instructions]. 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. Good morning, everyone. My name is Max Strandwitz. I am the CEO of Mips. And with me today also presenting, I have our CFO, Karin Rosenthal. We will take you through the Mips Q2 2025 result presentation.

And if we start with the key highlights of the quarter, we saw good development in the quarter with 12% organic growth in the second quarter despite very challenging conditions. Year-to-date organic growth is now at 23% plus.

The rapid implementation of tariffs did have a significant impact on sales across all the 3 categories. However, we did see that the sales improved over the course of the quarter as the effects of the tariffs became a bit more predictable.

We did see volume growth on the U.S. market despite all the challenges. We did have a slow start at the beginning of the quarter due to tariff uncertainty. Europe continued with unchanged momentum during the quarter, which we were very happy about. We did see an EBIT decrease in the quarter, fully explained by legal costs and the negative impact from the ForEx effect. We will come back to a little bit to that later in the presentation. And as we see these effects as temporary, we remain confident on the long-term strategy and our financial targets.

In terms of the current situation and the expected impact from tariff, we did see that the rapid implementation of tariffs brought uncertainty to the short-term outlook in all our 3 categories in the U.S. market. A lot of our helmet brands have taken price increases to mitigate the own cost from tariffs. And the price increases have been well accepted by the retailers.

Just for reference and important to understand that in 2024, 53% of Mips sales was to U.S.-based brands. These products are then, of course, sold all over the world. Brands from other parts of the world are then, of course, also exporting to the U.S. Our assessment is that a bit more than 50% of the volume that we do lands on the U.S.-based market. We do see that Helmet brands have started to relocate production outside China to derisk the potential impact of further tariffs, and we continue to expect short-term demand swings from the implementation of tariffs.

If we then look at sport, we are really happy to see that the progress continues. We did achieve a 3% net sales growth in sports. If we adjust for currency effect in sports, we did see 13% organic growth. Despite the effect of the implementation of tariffs, good performance in bike, and we did actually see growth -- volume growth in the quarter for 7th time in a row, which is, of course, extremely strong. And also, we did see strong growth in snow despite that we had a very strong prior year comparator.

Just to remind you, last Q2 last year, we grew 60% in snow. So we were up against a very tough comparator. But despite that, we managed to deliver strong growth also in the snow subcategory.

We did see volume growth in the U.S. market despite the tariff uncertainty. Europe continued to develop well and in line with our ambition, and we are happy to say that we managed to deliver again above 50% growth on the European market.

We have just finished Eurobike a couple of weeks ago, and Eurobike is the biggest bike show in the world. Two great news from us. First of all, we launched our new Mips Air Node Pro version in bike, which is our lightest version and belongs to the Air family with a lot of new great features, and we also launched our new mobile event concept, which will also roll out to a lot of B2C event and also part of our strategy of doing a lot of more public events and so on. And I'm sure that you will see it at an event close to you. Both of these were very well accepted both by the visitors and of course, our customers at the show.

And as we see that we are doing a lot of progress despite the very erratic behavior around us, we have a very long-term positive on the outlook of the sport category.

In Moto, we saw softer performance with a decline of 28% in the quarter, fully explained by the implementation of tariffs, our presence in Moto is smaller. And there, of course, we don't get as much priority among the brands. And of course, we also saw a negative impact from the strengthening of the Swedish krone. So the ForEx impact.

And as we are investing in Moto, we did welcome 2 new athletes during the quarter. The first 1 being Jorge Prado, which is 1 of the most decorated MX riders in the world. Last year, he won the MX GP Circus. He now has entered into Supercross in the U.S., and we are really excited to have him on board as another ambassador in the MX subcategory. And then we also have managed to sign Joan Mir, which is the former World Champion in Moto GP. So 2 great ambassadors, 2 great athletes that will help us building the awareness in the Moto category. Even though it was soft performance in the quarter, we expect it to bounce back and no change to the long-term outlook still great opportunity to continue to grow in this category.

In Safety, similar to Moto, we saw soft performance with 12% net sales growth. Also here, we saw an impact of the delays in ordering due to the tariff effect. No change to the assumption. We still get a lot of new brands and of course, launch a lot of new products on the market. The ones that are following us on LinkedIn did see that we, last night, announced a partnership with the key helmet brand, Bullard. They are 1 of the larger Helmet brands in the industry. And it's also good to know that the founder of Bullard, Edward W. Bullard actually is considered to be the inventor of hard hat. So great to have them on board, and we're really excited to partner up with this iconic helmet brand.

If we then look at the development of net sales in our category, sports, 3% organic growth with growth both in bike and snow, which we are very pleased with, especially given the challenging situation around us. Moto soft performance will bounce back coming quarters and also in Safety, no change to our long-term ambition.

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 second quarter with an increase in net sales of 1% and adjusting for currency effects, which was 11% due to a stronger SEK versus U.S. dollar, net sales increased 12% organically.

Gross profit increased with 3%, and we saw a strong gross margin of 74.2% versus 72.9% last year. And the increase is mainly explained by the sales mix.

In OpEx, we continued to invest in our strategic priorities, and it was also negatively impacted by legal costs of SEK 14 million in the quarter.

EBIT was down 22% to SEK 41 million compared to SEK 52 million last year and the EBIT margin decreased by 8.8 percentage points to 30.1% compared to 38.9% last year.

And operating cash flow amounted to SEK 18 million versus SEK 29 million last year.

If we look at the financial KPIs, 12% organic growth, 30% EBIT margin and SEK 18 million in operating cash flow.

If we then look at the development for the first 6 months, net sales increased with 16% and adjusting for FX due to a stronger SEK versus U.S. dollar, net sales increased 23% organically.

Gross profit increased with 19%, and we saw a gross margin of 73.2% versus 71.6% last year and the increase is mainly explained by a favorable sales mix.

In OpEx, we continued to invest in our strategic priorities, R&D and marketing, and it was also negatively impacted by legal cost of SEK 23 million.

EBIT was down 1% to SEK 65 million, and EBIT margin decreased by 4.4 percentage points to 25.9% versus 30.3% last year.

We saw a good operating cash flow of SEK 55 million versus SEK 20 million last year.

And the financial KPIs organic growth of 23%, EBIT margin of 26% and SEK 55 million in operating cash flow.

If we then look at the balance sheet and cash flow, we have a strong cash position, and we don't hold any loans. We had cash and cash equivalents of SEK 244 million. We paid out SEK 172 million in dividend in May corresponding to SEK 6.5 per share or 122% of net earnings. And the operating cash flow in the quarter amounted to SEK 18 million and we had an equity ratio of 85%.

And then I hand over to Max.

So if we then summarize the quarter. Thank you, Karin. We have navigated well in the quarter. good development in the quarter despite the challenging conditions that we saw. All the 3 categories heavily impacted by the implementation of the tariffs. We did see that the situation improved at the end of the quarter. We expect some certain uncertainty short term, but no -- not to the great extent that we saw during the second quarter, and we remain positive on our long-term outlook and the delivery of our financial targets.

And with that, we open up for questions.

[Operator Instructions] And now we're going to take our first question. And it comes to line of Adela Dashian from Jefferies.

A couple of questions from me. If we start with the sales development during the quarter, are you able to explain why the bike category is, I guess, a bit more resilient than most and safety despite also being affected by the same type of tariff headwinds? Is it mostly due to inventory levels still being not normalized yet within that category?

And then also on Moto and Safety, you are in the text explaining that some of your customers are strategically focusing more on their own measures such as relocating factories and so on, which is resulting in project delays. How confident are you come back already in H2?

Yes. So I think, first of all, when it comes to priority in supply chain and with our key customers, as you say, bike and also snow There, of course, we have quite a lot of volume. When the factories started up again their production for the U.S. market, of course, for them, it was key to get the volume out as quick as possible. Of course, they prioritize the high-volume sellers since we have gotten quite far when it comes to bike and in snow, they prioritize the high-volume runners. And of course, we are there already in snow and bike. And of course, in Moto and in Safety where we normally start with the more premium products and so on. Sometimes, of course, you get down prioritized that's what happened in Q2, not something that I'm worried about long term and something that has happened before. So bike and now a lot higher volumes, they do get priorities in the factories. Then, of course, we did return back to growth already during the second quarter, we saw a good momentum. What we saw during Q2 at least from Mips point of view and I think from the old point of view, was quite exceptional. And of course, it's not the normal condition. So yes, we do expect to bounce back already in Q3.

Got it. And then on the gross margin, can you explain a bit what you mean here by the sales mix being favorable?

Yes. So first of all, we did a little bit less of projects during Q2 because, of course, our customers focused a lot more on relocations, projects normally have a lower margin. And by having lower margin, you can increase the sales mix. And then, of course, also, we saw some favorability in costs. So overall, really good performance on gross margin.

If customers then return to a more normal project pace in H2, then we shouldn't expect the same type of margin uplift?

No, I think -- I mean, focus for this year, I think, will still be a lot on relocations because, of course, everyone are worried about what's happening in the world and they want to derisk their supply chain. I think the exceptional margin that you saw in Q2 of 74.2%. I don't think that to expect going forward. We said that we expect 70% long term, and that's still valid. But indeed, it was a very good, strong margin in Q2.

Great. And then just lastly on this lawsuit or legal disputes. I saw that the legal costs were higher now in Q2 versus Q1. Is there an expectation that it will continue to trend upwards as your customer is getting closer and closer? And just overall, do you have an update on what's happening timing-wise with that posit?

Yes. As we're still in preparational phase, of course, costs are quite high. I think it's fair to assume what we had year-to-date, you can assume also a year to go. So basically, and doubling of the legal cost that you have seen so far. I think that's fair to assume. And like I said, in these cases, -- you can do a lot of different things. But from Mips' point of view, of course, it's really important to take these things serious there is about someone else IP rights, which we don't think is right. And then, of course, we want to act. It's part of our business model, and that's why we want to prepare in the best possible way. you don't want to go into these sections unprepared, and that's not what we plan to do. And that's why you see more cost. These things are, of course, really, really expensive. But for us, something that we are very committed to do.

Sorry, I just want to confirm I heard the right thing. So are we expecting a doubling from what you've already paid in H1 going forward?

No. The same run rate. So I think you have SEK 23 million in the first 6 months and then probably somewhere in the same range for the second half.

Got it. Got it. Then just lastly, if I may, and then I'll step back. On safety, are you still targeting the same type of guidance range that you've provided before in terms of sales?

Yes. There is nothing that has changed. We are now going into the very heavy fair season. We have ASSP coming up next week then we have NFC in the U.S. in Denver in September. And then in November, we have A+A, which is the world's biggest construction far only happening every second year. So there is a lot of momentum in the category, and we're really happy about that. So no change.

Now we're going to take our next question, and the question comes to the line of Gustav Hagéus from SEB.

If I was to return to organic growth to 12% in the quarter, you say accelerate towards the end of the quarter, but not back to the level that you saw in Q1, which I believe was just above 40%. And I believe face consensus is at around 29% organic for Q3. But could you sort of indicate if you see an acceleration in H2 versus H1, you're now 23% year-to-date, right, in inorganic growth? Or where do you think your growth is at the moment going into July and so forth?

Yes. We do expect an acceleration versus the 23% organic growth you see year-to-date.

Yes. And that's already in Q3? Is that more of a Q4 story?

No, I think it's for the balance of the full H2. I think you will see maybe a little bit or around the same figure in Q3 and then, of course, trending upwards in Q4.

So plus 20%-ish Q3 is not a bad guess then? I realize you don't have all the transparency, but [indiscernible].

Yes, based on that assumption, yes.

Good. And then sort of looking a little bit longer term than your targeted SEK 2 billion by 2029 in terms of sales from then -- from what do you see now from 2025 and do you still believe you're still on the trend to achieve that? And where do you see sort of the steps to getting that? Where do you expect more growth versus a little bit less perhaps on that journey to SEK 2 billion?

Yes. I think, I mean, if you look at last quarter and also the quarters before, we were, of course, trending that on that level. We expect to continue to trend above that level. Of course, we have a couple of different strategic priorities. The first 1 and the most important 1 is to grow with the customers we already have. Of course, U.S., we have been doing well even though it's a very challenging market, we have still managed to grow on that market. Europe, use or yourself 50% organic growth in the quarter, and we continue to deliver our strategic ambition to get Europe to U.S., which is going quite quickly. And we see that we're increasing the penetration really quickly on the Europe market. Then we have a strategic priority, also, of course, to win in kids. For us, it's really important to get also a bigger penetration of kid's helmet and then also getting into new channels and markets. Safety is also a big priority. So if we exclude Q2, which is not a normal quarter and of course, an exceptional quarter, I think we are delivering quite well on that ambition.

But -- and if you see then perhaps short 30% growth this year. Where do you see sort of the -- as you see it now, the steps towards the SEK 2 billion by 2029, you see that growth should pick up then year-over-year in '26? Or is '27, '28 more you think reasonable to assume where you have a pickup in growth to get to the SEK 2 billion?

Yes. I think that the normal situation was, of course, that we see this already happening in 2025. Then, of course, we didn't plan with the tariffs. I think that will bounce back, and we will come back to a more normal running rate over time. Like we said, if you take the 2029 number divide by the years, you get to a growth slightly above 30%, and that's what we should be trending at going forward.

And I noticed you mentioned new markets as part of that strategy. Is that geographical markets? Or do you see that there are adjacent categories where you might expand? I noticed you -- I mean, you're not very active in the ballistic helmet for instance, and times are changing and maybe that could be a growth driver for you if you were to focus on that or you have at the moment?

We have opportunities when it comes to market. One is, of course, to continue to grow in doing geographic expansion. There, of course, you have Asia, which is very interesting for us and something which has become a bigger part of our portfolio and something that we see developing quite well also over time. Last quarter was down a little bit. But if you look over time and the rolling 12 months, we have a quite good performance in Asia. And then for us, today, we are engaged in 9 subcategories. Of course, we're always looking into getting into new subcategories. Our strategy 2029, is called Heads. And the reason for that is we focus on Helmet, that's where we still see a lot of opportunity. And of course, being able to go into a lot of new categories. So there is still a lot of untapped opportunities in helmets, military helmets, fire brigade helmets, police element. So there is a lot of new areas which we can go into. Just in the industrial safety, you also have mining helmet, offshore helmet, logistic helmets. So for us is more that when we go into a sector, we want to understand the injury criteria. We do quite a thorough job to really understand the accident scenarios and then, of course, make sure that we have a relevant solution for those type of helmet. So there is, for sure, new opportunities that we can get into when the time is right.

And coming back then to the -- my final question on the legal costs. You guide here for another roughly SEK 23 million perhaps in H2. So SEK 40 million, SEK 45 million, SEK 50 million for the year. Is that -- do you think it will be -- are there -- what's the likelihood that this is going to trend also into 2026 to your low costs related to this specific issue also in next year? Or should we assume that you would get a delta of say, 26 -- or SEK 46 million to earnings next year then from not having to pay the legal field?

I mean it all depends on how the case develops, of course, like I said and explained, this is in the preparatory phase, and we spend a lot of money in the preparatory phase because we want to prepare ourselves. Normally, as these procedures are normally quite long. You spend a lot of money in the beginning, then you normally go into a little bit of vacuum if needed, so you will probably not have the same magnitude of cost over time.

And when is the actual court date or hearing?

We don't know yet.

Now we're going to take our next question. And the question comes from line of Carl Deijenberg from DNB Carnegie.

So a couple of ones from my side. Maybe coming back a little bit to -- if you could just talk a little bit about the underlying market trends excluding market shares and so on, maybe what you've seen on or if you have any rough estimate of what the sellout development, for example, has been in the U.S. and Europe on helmets year-to-day. And also, if you could talk a little bit on the price adjustment, you're quantifying, I guess these are quite isolated to the U.S.? Or has there been any impact also on the European market for price?

Yes. So the latest market data is still Q1 data because, of course, the new market data for the U.S. market is not coming until end of July. So you need to bear with me a little bit with that. But if you look at Q1 data for the U.S. market, you saw few percent down when it comes to the bicycle helmet market. So the consumer are still a little bit careful on their spending. When it comes to the snow helmet market in the first quarter, it was actually up 8% in volume and actually up 12% in price. So there, of course, you saw very positive momentum in the snow helmet category and so on. And of course, we also see that. So still a couple of weeks until we get the Q2 reporting. I think the overall assessment is that the U.S. consumer is still a little bit more careful and so on, we see that rider engagement in the U.S. market is going up. So more people are bicycling, but still that does not translate yet into improved consumer behavior. This can, of course, change. But at the moment, careful U.S. consumer.

If you then look at the European market, it's very difficult to get like consolidated data because it's country by country. But if we look at the countries where we see very positive development, Germany, is doing exceptionally well. We see a lot of the reporting also from external retail partners and so on that they also see good German market, and we do see that also France is also doing relatively well for us and so on. So we are gaining a lot of traction in the European market. And we see that, that consumer is coming back. It's important to know that it's still from a relatively low level Europe has been a little bit more of depression than the U.S. market. But of course, we see that the Europe consumer is coming back relatively quickly. And then when it comes to the price increase, of course, price increases on the U.S. market has been somewhere around 10% to 15%. The rest of the world much fewer because, of course, it's difficult to translate the tariff increases into price increases and so on. So much less and more inflationary type of price increases that we see.

Yes. And maybe following up on that, I mean, I appreciate that you report to the geographical exposure on the customer and the dominant side, but do you have any rough estimate on what the sell-out mix between, let's say, Europe and the U.S. is for you now roughly [indiscernible].

Yes. Since Europe is gaining a lot of traction. It used to be like 50%, 30%. So 50% U.S. market, 30% in Europe for Mips, but of course, as we're increasing penetration quite quickly, we see that Europe is increasing in penetration quite fast and outgrowing, of course, for us, the U.S. market.

And then I think the key issue at the moment is today, with the challenges of the tariffs, there is more products being sold out than actually being bought in. So the hesitation that a lot of brands have during the Q2, of course, resulted in that they do not replenish at the rate that product is being sold out. So of course, that will, of course, also be a problem long term if that continues.

Yes. And maybe 1 final from my side. Coming back to safe and the announcement of the partnership yesterday obviously seems to be quite a sizable player. I just wanted to ask if you have any updated estimate or appreciation of how much of the size of the TAM in Safety that's your total partnership based now covers. I think you used to give a comment on this couple of quarters and obviously, we've been adding quite a few since?

Yes. I mean we're very happy with the partnership with Bullard. It's quite an organic brand, really strong market position, not only in U.S. but also in the whole world. They are 1 of the bigger players. We used to say that we had a customer base that represented somewhere around 30% to 40% of our addressable market. With Bullard, we could probably assume that we are closer to the 40% and 30%.

Now we're going to take our next question. And the question comes line of Daniel Thorsson from ABG Sundal Collier.

Quite a lot of questions with average here. I have 1 on U.S. [indiscernible]. Do you see and engage some customers are seen in the total here in June have another end of the quarter or potentially building on already in July, August quarter we can help a potential.

No, we have not seen that effect probably on the contrary that they are more lacking supplier rather than getting too much of it.

Okay. And for [indiscernible].

No, I think, I mean, the main 1 is, of course, bike as we are in the back season because that's where we see most of the helmets being sold in the U.S. snow market, we were a little bit worried about in the last call. That said that production needs to start again after the vacuum that we saw in the beginning of the quarter, as we now see that we were delivering quite strong growth in snow in the second quarter despite a very strong growth or prior year comparator of 60% growth. You can assume that, that production actually started to happen and so on. So we see good momentum also there and that a lot of the brands have prepared themselves well also in snow for the coming season.

Okay, I see. And then I have a second question on [indiscernible] progress on the [indiscernible] your main in the [indiscernible] market here?

No. I think for us, it has been much easier to penetrate the MX market. We have, I think, 2/3 of all the podiums in the MX circuit and in Supercross, so really good penetration there. There, of course, they tend to use a lot of protective equipment and so on. So there, it has been a really good market to penetrate and so on. When you look at the road, it's a little bit more traditional market. But of course, also signing a new Moto GP rider means that we are serious of entering into that market, and you will also see a lot more road helmet models being rolled out coming quarters.

So yes, it has taken a little bit longer time, but it's still as relevant and we have actually quite a lot of success also on that market. We did develop a couple of new technologies in the last year where our fabric solution, which is Integra TX, which is, of course, a very important one to really enter into that where we deliver the whole padding system. And in total, we have done 15 projects with that. That is being rolled out to the market. And of course, both increasing revenue but also our penetration into the on-road market.

Now we're going to take our next question and it comes from the line of Emanuel Jansson from Danske Bank.

Just looking at the end of this quarter, given that you have seen this sequential improvement throughout the quarter when it comes to, I assume volume growth, is it fair to assume that you have seen growth in all of your fee segments now by the end of this quarter?

Yes.

Okay. Good. And jumping to this Bullard announcements, I think if you read on their own web page, they I think they claim that they sell around 6 million helmets per year. Is that mainly in the U.S.? Or is this globally? And should this maybe be seen as 1 of your top 5 biggest collaborations today in terms of helmets number of helmets sold?

Yes. I think, first of all, I mean, the big market is, of course, the U.S. market. They are really an iconic brand in the U.S. but they have quite good distribution all over the world. Since we started yesterday, or announced yesterday, of course, they are still not the top 5 of the customers. But of course, there is a lot of potential in that collaboration.

Yes. Great. And maybe a final 1 for me then. You're talking about the -- in the CEO's comments about the reallocation of production for your from the manufacturers. How far has -- or how much of the production is reallocated today? And how much you think will be? And where is it heading?

Yes. I mean it's going quite quickly in terms of the ambition to relocate and so on. And there is a lot of activity. Main part of the volume is today going to Vietnam. 6 new factories has been open only during the last years and so on. Even though there is a big ramp-up of the activity, I still estimate that not even 10% of the total helmet volume will be produced in Vietnam. So it will take a little bit of time. If we look at the shoe industry that did the same transition some years ago, it took around 10 years to fully relocate everything to Vietnam. I think it will go quick, but it will at least take a couple of years before you have a substantial volume in Vietnam. Some of the bigger brands move quicker because, of course, they get priority, but it will still take some time before Vietnam will be a bigger part of the helmet manufacturing world.

Okay. Great. That's very clear. What do you think the impact near term can be due to this reallocation?

Yes. I think from Mips, I mean, when necessary, we moved the tooling with the brands. It normally takes a couple of weeks, so not a big disruption in terms of that. Sometimes, of course, they hold production, then they produce a couple of months later in another factory, but nothing that will be that disruptive as such and so on. So no dramatic effect to be seen.

There are no further audio questions, and I would now hand the conference over to your speaker for any written questions.

Yes. So the first question is from ABC Helmet. I'm not sure who that is, but it has the Mips solution shown to improve brain protection in the Safety category? And of course, what Mips tried to do, we try to redirect energy. As we are the market leader, we took a decision, of course, to always rely on third-party validation. So when we entered into the category, we did a lot of external testing, both at the state laboratory SBTI, where we evaluated for tangential forces in 3 different directions. We looked at falling objects and we looked at moving objects and then, of course, in fall accident, of course, with good results in all of the 3 different types of accident criteria. Since then, of course, a lot of more further validation has been done in the area. So yes, we have done that and with all investors or brand partners, you're more than welcome to visit the Mips test lab, and we will show you a little bit more on what we have done in the area.

Then, of course, the second question is that we have SEK 200 million, SEK 300 million on the balance sheet and there is a question why the financial income is more or less 0. Maybe over to you, Karin, to answer that question.

Yes. So currently, we have all our money as cash at bank. So what we did this quarter was that we paid out dividend of SEK 172 million. So we paid out more than net earnings, 122% of net earnings.

Yes. And then there is a question again from ABC Helmet. When can we anticipate to see results from legal costs? I think in all these legal cases, it's very difficult to anticipate when things will happen. We invest in this process because we think it's the right thing to do. We want to make sure that we have the right rights on the market. Mips technology or patents is not included in the process. It's about someone else rights, which we want to make sure is the right ones. And therefore, we're invest in the process. But of course, you can never anticipate when you will have a result of any legal process.

Then there was a question on Asia and Australia. And that it was slightly down versus prior year. And yes, you're right, we have had fantastic growth on the Asian market. We have seen a little bit more careful consumer in China, especially. And of course, we see that, that consumer is coming back a little bit. We see also a lot of incentives from the Chinese government on -- I'm not that worried about the Chinese market. We see that we are increasing market share and penetration, and I believe that, that will base back.

Then, how confident are you on the success of your patent case? That again comes from this ABC Helmet. And it's not our patent case. So of course, we can't be confident at all about our patent case.

And then there is a long question. How will your 2 new sales professional in the U.S. help to sell into 40% of the TAM? And of course, when we add people, it's not like they go and physically sell helmet on the U.S. market. Our job is educational job. We are an ingredient brand. So of course, we partner up with a lot of our helmet brands. That's our success model and that's, of course, how we gain leverage and really leverage the ingredient brand model. So no, they will not go physically to everyone but more help on educating the market on what Mips does and why we are relevant also in the Safety category.

I think that's all the questions that we have been seeing also electronically. Thank you, everyone, for listening into the call. Hope that you have a fantastic summer, at least we will have that. Now when we take holidays for a couple of weeks and then speak to you again after the Q3 results announcement. Thank you, everyone, for listening in.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.