Comments from the CEO

A year to be proud of

2021 was the second year of the pandemic. That’s a sentence I never thought I would need to say, let alone write. But there are so many things from the last two years that I never thought I would experience. The world has been completely and utterly unpredictable.

It is in this unpredictable world that we have really shown our strength, shown that we can readjust, and responded to the challenges we have faced. Our strong market position and our healthy financial position have given us the confidence to continue to invest in research, product development and in raising the awareness of Mips around the world. We’ve done this despite the often uncertain circumstances in the world. We have never doubted that demand for our products will continue to be robust once we come out of the pandemic. It is therefore important that we have not hesitated, and instead continued to invest at the same pace. We see with sadness how Russia’s invasion into Ukraine has affected the geopolitical situation around the world, and has heightened uncertainty about future market developments. Mips has no activities in either Russia or Ukraine. We do not yet see a negative impact on consumer demand, but we are following developments closely.

Increased number of partners in the manufacturing chain Throughout the pandemic we have constantly worked with our supply chain which has enabled us to keep growing at the rate we have, in spite of the challenges of the pandemic. During the last two years we have gone from working with 40 different partners in our manufacturing chain to more than 80 at year-end. This has meant that we have always been able to meet the demand we have seen and so far, we have never missed an order throughout this entire period. Strong organic growth We have delivered organic growth of 72% this year, with an increase in volume of 75% while at the same time strengthening our profitability and almost doubling our operating cash flow. This is proof that our scalable business model is still intact, even though the world around us has been constantly changing.

Progress in our sustainability work We are pleased with the progress made in our sustainability work this year. We have succeeded in achieving the goals and ambitions we had set. A major part of our work this year involved mapping out Mips’ total climate impact, which is essential for improving our understanding of our real environmental impact, and critical to being able to realize our ambition to deliver on the ambitions of the Paris Agreement of 1.5°C for global warming.

Continued expansion of our customer base Our largest customers have continued to expand their helmet product ranges with Mips solutions, which has generated very good growth. We continued to grow in all the geographic markets and all the helmet types we operate in, and by the end of 2021 Mips solutions had been implemented in 883 helmet models, compared to 729 helmet models the year before. The number of customers has also increased and at the end of the year we had 143 customers in total, an increase of 22 customers compared to the prior year.

Fantastic efforts from all Mips employees

Expansion of our customer offering Mips has used data simulations in the development of our new concepts and products ever since 2002. A couple of years ago we started to understand that we had an incredible lead over everybody else in our industry in this area, and we realized that this was also something that our customers would value as support in their product development processes. To be able to be an integral part of their process, we need to limit the time it takes to run simulations.

The launch of our Virtual Test Lab During the year we have managed to streamline our process so that we can now perform a full simulation within ten days, instead of the 50 days it previously took. This kick-started the launch of our new Virtual Test Lab (VTL) this year. VTL is the name of the concept we use to perform data simulations of the properties of a helmet and it allows virtual testing of the helmet before it goes into production. VTL is a tool that provides our customers with support for their product development, as well as an opportunity to optimize their material usage, thus allowing them to work more sustainably, efficiently, and cost-effectively.

Usage of the VTL in partnership with our customers will increase going forward, and is further evidence of the value of being able to give our customers unique possibilities in their collaboration with Mips.

Raising awareness of Mips all over the world Raising the awareness of Mips is one of our most important tasks. Our market research has shown that if consumers know about us and understand what we do, they are prepared to pay for having Mips technology fitted in their helmets.

Our marketing this year has also very much involved expressing ourselves in a more consumercentric manner. We started the year by launching our product families. This enables us to talk more clearly about the benefits of our different solutions. In March we launched our new website, which was very well received and was nominated for the Swedish Design Award in the best website category. We also finalized our in-store concept this year aimed at marketing and increasing sales in stores. But perhaps the most important activity was the launch of our new training program which follows a seven-step approach that clearly explains how to describe and sell Mips.

During the last two years we have focused on creating a toolkit to push our marketing forward. Through all the activities we have now completed, we have developed the materials we need to raise the awareness of Mips around the world, both in stores and online.

In 2020 we launched Team Mips with our two first members and in 2021 we expanded the team by adding three more members and two teams. We believe that having our own Team Mips is a very important part of our awareness raising activities.

Updated strategy and new financial targets The combination of our great progress within our established categories Sports and Motorbikes, and a new customer base within the Safety category, along with the fact that the global market for Sports helmets has grown during the pandemic, has boosted our outlook for Mips’ growth opportunities. We therefore intend to present our strategy and the updated financial targets during a Capital Markets Day on 9 June 2022. Fantastic efforts from all Mips employees I will end as I began. 2021 is a year to be proud of. I am very pleased with the excellent way we have managed the challenges we have faced in a constantly changing world. We have continued to strengthen our position in all our three categories, we have carried out more customer projects than in any other year, we have made good progress in our sustainability work, and we have accelerated our marketing investments to ensure that we continue to raise the awareness of Mips around the world. These are all actions that can be difficult to implement even under normal circumstances – doing them during an ongoing pandemic and also delivering organic growth of 72% during the year is testimony to the responsibility and engagement shown by every Mips employee during the year.

Stockholm, March 2022

Max Strandwitz

PRESIDENT AND CEO