Release Date: July 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mips AB (MPZAF, Financial) achieved 12% organic growth in Q2 2025 despite challenging conditions, with year-to-date organic growth at over 23%.
- The company saw volume growth in the US market and maintained strong momentum in Europe, achieving over 50% growth in the European market.
- Mips AB (MPZAF) launched new products, including the Mips Air Node Pro version in the bike category, which was well-received at Eurobike, the world's largest bike show.
- The company reported a strong gross margin of 74.2% in Q2 2025, up from 72.9% the previous year, primarily due to a favorable sales mix.
- Mips AB (MPZAF) has a strong cash position with no loans, and it paid out SEK172 million in dividends, corresponding to 122% of net earnings.
Negative Points
- The rapid implementation of tariffs created uncertainty in the US market, impacting short-term sales across all three categories.
- Mips AB (MPZAF) experienced a 28% decline in the Moto category, attributed to tariffs and a lack of priority among brands.
- Legal costs negatively impacted EBIT, with SEK14 million incurred in Q2 2025, contributing to a 22% decrease in EBIT compared to the previous year.
- The company faced a negative impact from foreign exchange effects due to the strengthening of the Swedish krona.
- The Safety category experienced soft performance with only 12% net sales growth, affected by delays in ordering due to tariffs.
Q & A Highlights
Q: Can you explain why the bike category is more resilient than Moto and Safety despite similar tariff headwinds?
A: Max Strandwitz, CEO: Bike and snow categories have higher volumes, leading to prioritization in supply chains. Factories prioritize high-volume sellers, which benefits bike and snow. We expect Moto and Safety to bounce back in Q3 as conditions normalize.
Q: What contributed to the favorable sales mix impacting gross margin?
A: Max Strandwitz, CEO: We did fewer projects in Q2, which typically have lower margins, thus improving the sales mix. Additionally, we saw some cost favorability, resulting in a strong gross margin of 74.2%.
Q: Are you still targeting the same sales guidance for the Safety category?
A: Max Strandwitz, CEO: Yes, there is no change in our guidance. We are entering a busy fair season, which should support our targets.
Q: Do you expect organic growth to accelerate in H2 compared to H1?
A: Max Strandwitz, CEO: Yes, we expect an acceleration in organic growth in H2, with Q3 showing similar figures to Q2 and trending upwards in Q4.
Q: How is the relocation of production affecting your operations?
A: Max Strandwitz, CEO: Production relocation is progressing, mainly to Vietnam. Although it will take time to reach significant volumes, we do not anticipate major disruptions. We move tooling with brands as needed, minimizing impact.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
