Mips AB

STO:MIPS

Earnings Call Transcript 2024-Q1

[Operator]

Good day, and thank you for standing by. Welcome to the Mips Interim Report Q1 2024 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. Please go ahead, sir.

[Max Strandwitz, executive]

Thank you, operator, and good morning, everyone. My name is Max Strandwitz, and I am the CEO of Mips. With me today, I also have Karin Rosenthal, who is our CFO, and we will walk you through the Q1 quarterly report.And if we start with the key highlights of the quarter. We did see a stable start of the year, but actually a decrease of 6%. And, of course, that decrease is fully explained by a strong prior year comparator in snow. For the ones that are following us knows that we were increasing with 60% in Q1 2023, and, of course, we are up against that tough comparator.In terms of longer term, nothing has happened in snow that makes us worried. And, of course, if we had a very strong comparator in Q1, we are up against a much softer comparator in Q2 with minus 40%. And I believe that when we are exiting Q2, we are back at growth again in snow. So nothing really that has changed, and more of a phasing effect.And then why did we say stable quarter? That's because we saw good development in the other categories with continued good performance in bike, and we are now happy that we have seen 2 quarters with consecutive growth in bike. And, also, even though it was only 3%, Moto was back at growth again 1 quarter earlier than we anticipated ourselves. So of course, really pleased about that.We also see good momentum in terms of projects of implementing new helmets with Mips. Of course, that's a really important indicator for us if we are still gaining market share, if people will still increase the penetration with Mips in their assortment.We saw an increase of 21% in the quarter, which is, of course, also a very robust indicator that we are going in the right direction. And, of course, we don't see any reason to change our previous assumption of recovery in 2024, and we remain confident in our long term strategy and our financial target.In Sport, like I said, we saw growth in bike, tough comparators in snow. Sport was now down with 9%, and, of course, that's fully explained by snow. We did see growth in both bike and also equestrian, which continue to develop well in the quarter. We continue to see positive order momentum in bike, and our previous assumption of recovery in bike remains.We consider the performance in snow, like I said, to me, more of a phasing related situation and expect to be back at normal performance when we are exiting in Q2. Then of course, we had also a great exposure of Gothenburg Horse Show, which is the largest show jumping event, which is, of course, a great event.And there we saw -- experienced a really high level of interest in Mips. And also we had great interaction with the equestrian industry. And it's really good to see the level of education and awareness you see in that audience. Even though equestrian is not the biggest part of our portfolio, it's still very interesting to see the interest that we are gaining in that subcategory. And of course, we also see a long term positive outlook in the Sport category.If we then change the next page which was Moto, and there we were expecting a little bit softer Q1. As we communicated, we did actually achieve a little bit of growth, even though it was only 3%. But growth is growth. And of course, if you come from a couple of soft quarters, we are positive about being back in positive territory again.The retail environment is improving, especially for the important U.S. market, but it is still softer than we have seen previous years. We have implemented several initiatives to improve the sell-through, support new partnership and model launches. And that, of course, starts to take effect.We have also announced that we will be the official safety partner of the Motocross World Championship, which was launched only a couple of years ago or days ago -- sorry. And that is, of course, very important for us to drive the awareness in this category. So we will be following them through the whole season.And we will also have our first safety symposium in the end of May, where we will gather all our key brand partners and also around 50 journalists in Germany and talk about how we can improve helmet safety also in that category. And that, of course, is a fantastic event, which we are really happy about.No change to the long term outlook, strong interest for Mips in the category, and, of course, we continue to see new partnership and also models being launched during the coming quarters.In Safety, we continue to see good development and, of course, supported also by important launches. We do see a gradual improvement of volumes. And, of course, with more helmets being launched during the first 6 months, we see good interest in both the U.S. and the important market.We talked a little bit about delay in certifications, not the Mips certification, but the certification of helmet in general, and those are now done. And we are looking forward, of course, to all the launches that we will continue to roll out.You did hear the announcement of Husqvarna. Maybe not the biggest subcategory, but, of course, really happy that we can make a difference also in the forestry industry. And, of course, great to see the expansion in -- of Mips into new type of subcategories. And, of course, we now have a very strong customer platform to really support the delivery of our longer term plan.And if we then go into next page and look at the development of net sales in our categories, we did see a decline of 9%, fully explained by the soft performance in snow. Moto, even though only 3%, back at growth. And, also, as we communicated already last quarter, we expect -- we didn't expect until Q2 until we see start to see the improvement in volumes.We did have 30% growth in the Safety categories. Key certification is down, as I explained -- or explained before. And of course, really happy with the platform we have in the Safety category.With that I hand over to Karin. She will talk a little bit about the financials.

[Karin Rosenthal, executive]

Good morning. I'm Karin Rosenthal, CFO of Mips, and I will take you through the financial part of the presentation.We saw soft development in the first quarter with a decrease in net sales of 6% and no change, after adjusting for FX, net sales also decreased 6% organically.Gross profit decreased with 8%, and we had a gross margin of 69.4% in the quarter versus 70.8% last year. The decrease is mainly due to higher revenue from customer implementation projects, which has lower margins, but positive in the long term since that will mean that it will lead to more helmets equipped with Mips in the future. And we also saw a product mix effect on the gross margin.In OpEx, we continued to invest in our strategic priorities, marketing and R&D. EBIT was down 12% to SEK 14 million and with an EBIT margin of 16.5% in the quarter versus 17.5% last year. Operating cash flow amounted to minus SEK 10 million in the quarter compared to minus SEK 42 million last year.If we look at the financial KPIs, minus 6% organic growth, 16% EBIT margin and minus SEK 10 million in operating cash flow.If we then turn to next page and look at balance sheet and cash flow, we have a strong cash position with cash and cash equivalents of SEK 400 million. And also to remember that Mips don't hold any loans.Operating cash flow in the quarter was minus SEK 10 million and the Board proposes a dividend payout of SEK 6 per share, corresponding to 249% of net earnings for 2023. And we had the equity ratio of 89%.Over to you, Max.

[Max Strandwitz, executive]

So if we then summarize the first quarter, we did have a stable start of the year, and we are pleased to see that performance is picking up in all our categories.Our assumption remains. We do expect recovery throughout 2024, and our view is that our sales will much more reflect what is actually happening on the market, rather than our customers eating out of their own inventory.And I think that's really important to point out that when we look at the market situation in general, we don't expect a very strong consumer in 2024. And, of course, we don't want to have any bets on a strong consumer. We expect it still to be weak. Still, we expect to grow and we expect a good recovery in 2024, and that's coming from 2 things.First of all, if the customers buys from us rather than eating of their inventory, of course, that's a good start. And, of course, that's something that will generate a lot more sales for us than the previous year.And then the second one is what we have always talked about is that, we are increasing the penetration with our customers. We have more Mips models being equipped with our technology, and, of course, that rollout continues.And, of course, increasing the penetration also generate growth. And, of course, that's the key driver also of us taking a lot more market share. So not a strong consumer, but we are still able to grow in 2024.And then, of course, when it comes to our financial position, we have a very sound financial position. We have confidence in the long term strategy and our financial targets.And with that, I open up for questions.

[Operator]

[Operator Instructions] And your first question comes from the line of Adela Dashian from Jefferies.

[Adela Dashian, analyst]

My first question relates to the bike subcategory. Would it be possible for us to get some type of, at least an indication of what growth was within that specific category in Q1 and also how that compares to Q4?

[Max Strandwitz, executive]

Yes. So, yes, you can. We did see double-digit growth in bike in the first quarter. Of course, it's not the bike quarter, it's not the biggest one. And that's roughly in line with what we saw in Q4. Q4 was actually a little bit stronger than that it was around 20%, but that's where we are trending at the moment.

[Adela Dashian, analyst]

Okay. And then also you just mentioned that you're not expecting the consumer to be particularly strong in in 2024 for obvious reasons. But when you're having discussions with your customers who aren't retailers, but at least they are in a very close contact with the retailers, what is the -- what's the type of order momentum that you're seeing now with the season already started? Or what kind of -- I guess, what dynamics are they, portraying at the current moment?

[Max Strandwitz, executive]

Yes. So I think I mean, we are in 3 different categories, and I think you need to divide it into the different subcategories, but I will try to give a quick summary.So if we talk with -- talk about the biggest one, which, of course, is the bike category or subcategory, you have a little bit of a different situation. In the U.S., it was not a fantastic start of the season. Early indications was that retail was down somewhere around 5% in the first quarter. Then, of course, when we're starting to go in much more into the season, we see very much normal behavior and a little bit of, like, a flattish sales out to consumer, which is a little bit better than we actually expected.So the U.S. market, little bit slower start, but now really up and running, and we start to see good momentum there. And we see also a lot -- you probably also read that, Shimano expectation that they start to see growth already in the second half of the year. And that's also what we hear from a lot of brands that they are much more positive about the second part of the year.We don't want to speculate on that. So we don't bet in the -- of the consumer in 2024, but more look at our situation, how can we influence the growth, and that, of course, is to deliver to our customers.And then, of course, we continue to launch Mips in as many product as possible. That's what will be the driver of our growth. If we are, for any reason, helped by the consumer, fantastic. But we don't put any bets on that.Then when it comes to the European market, it's basically more like a flattish start. So there you actually see a little bit more positive. And I think also commuting are starting really well. You see more and more commuters around Europe and so on. So they're much more normal.So I would say bike season, where we are at the moment, at expectation or maybe a little bit better than the expectation. Then what we said in motorcycle, especially in Motocross, we start to see that the market is improving, but it's again quite soft numbers. So it's better than last year. But, of course, it's softer than we have seen in previous year when it comes to retail, especially for the important U.S. market.And then when it comes to Safety, there, of course, Europe is softer because, of course, it's quite a challenged financial situation. Nordic is horrible. But then, of course, when you look at the U.S. market, it's super strong.And, of course, the U.S. market is driven by a lot of the big mega project that is being done, a lot of infrastructure project and so on. So there we don't see any slowdown when it comes to the construction sector at all. Hopefully, that summarizes it.

[Adela Dashian, analyst]

Yes, yes, lot of mixed development. But on Moto then, maybe would you say that you're a bit surprised by the quick recovery? I mean, you're still -- you're meeting very easy comps in the first half of the year, but it's still a recovery versus what you, saw in Q4.And, with that, would you say that it's -- the initiatives that you have taken, increasing the marketing spend, et cetera, that are now starting to bear fruit, or is there actually the end markets that -- yes.

[Max Strandwitz, executive]

No. It was a little bit stronger. We said that we didn't expect to be back in growth when it comes to Moto until Q2, and we saw, even though it was only a small growth already in Q1. So, of course, that was a little bit better than we expected.And, of course, a lot of the growth that we are expecting in Moto is from, of course, a normalized market situation with less inventory impact, but also that we are rolling out a lot of new models. And when also the situation is normalizing there, then we get the opportunity to launch new models with our customers. And, of course, that generates volume.As we now start to see that also the Moto situation is normalizing then, of course, those models are being launched and that, of course, is the key driver of us coming back to growth.

[Adela Dashian, analyst]

Okay. And then just lastly, one quick question on the Husqvarna partnership. I found that interesting. Could you give some more insight on the rationale behind that? And if we could see you partnering up with other types of companies within that specific subcategory going forward?

[Max Strandwitz, executive]

Yes. So when it comes to the forestry industry and so on, of course, we see that a little bit of the sweet spot for the Mips technology, because, of course, price points are normally quite high. So the typical helmet that you use in the forestry industry can be anything from USD 150 up to USD 300. So, of course, it's a great a opportunity in terms of addressing the right type of products with the right type of our price points and so on.So there we see that's very interesting and you will see more brands in that sector. But, of course, it's not the biggest opportunity. So you only talk about a couple of million helmets that is being sold in that industry every year, but a very relevant category for us to build be in.But also what we like about it is that, with these really high end products, you can also tell a very compelling story. And, of course, it's also a great showcase of Mips. So we are really happy working with Husqvarna and for them being the first mover in this sector and so on. But, of course, it doesn't stop there. That's just the start.

[Operator]

We'll now go to your next question. And your next question comes from the line of Emanuel Jansson from Danske Bank.

[Emanuel Jansson, analyst]

I think if we continue on this Safety segment, is it possible for you to display on the geographical split here on your current sales figures? Is most of the sales teams from the U.S. or Europe or the Nordics, or how should we view it?

[Max Strandwitz, executive]

Yes. I would say that 75% to 80% is in the U.S. market.

[Emanuel Jansson, analyst]

Okay. Perfect. And are all these certifications that more or less are done now, are they applying for all of these markets or any specific markets?

[Max Strandwitz, executive]

No. It's for the U.S. market. And, of course, the reason why it takes a little bit longer is that, certification for our sweet spot, which we always talk about, which is the type 2 helmet is a little bit more complicated. Testing is a little bit more random, and that's, course, why some of the brands have more issues to get through their products there, and those are all relating to the U.S. market.

[Emanuel Jansson, analyst]

Okay. So putting the pieces together, it seems like we should expect that sales continues to steam from U.S. here in 2024, right, given the market circumstances?

[Max Strandwitz, executive]

Yes. Also, there that there is -- like, I also talked about before, there is a big push in the U.S. to, move to much more of the type 2 helmet. So when we are talking about different types of helmets in the U.S. market, you have normally the type 1, which is more the simpler type of construction helmet. And then you have the type 2, which normally offers a little bit more advanced protection. Those type of helmets are normally somewhere around USD 100 and above.And given, of course, a lot of the construction company's commitment to safety and also in these mega projects that everyone talks about in U.S., you see an increased attention when it comes to with PPE and safety equipment in general, and, of course, that's what really driving.We talked about the construction helmet market growing somewhere around 5% annually. If you look at the types of helmets that we are addressing, which is more the type 2, you see a growth of double digit.For sure, no one has the exact number yet, but you see a very, very strong conversion from the old traditional hard hats to much better helmet in the market. And of course, that's what's really driving the push in the U.S. And we actually expect that to continue.OSHA, which is the regulatory body that is issuing a lot of the requirements for helmets and so on in the U.S., they already talk now about that in 10 years from now, you will see a much bigger share of the type 2 helmet, because, of course, much more companies are much more focused on safety and those related topic.

[Emanuel Jansson, analyst]

Okay. And I guess, the type 2 helmets in the U.S., is there penetration around 10% or so, or can you maybe share some insights there?

[Max Strandwitz, executive]

Our penetration you mean?

[Emanuel Jansson, analyst]

No. Sorry. The total type 2 helmet penetration in U.S. compared to type 1 helmets?

[Max Strandwitz, executive]

Yes. It's always -- it depends if you talk about volume or value. If you talk about volume, yes, then their indication is that it's somewhere around 10% to 20%, but that is in volume, of course. But given that the type 1 helmet can be as low as USD 5 to USD 15 versus USD 100 in terms of value, there's not that much of a difference.

[Emanuel Jansson, analyst]

Okay. That's very clear. And just jumping on to the snow segment, can you maybe share some insights or view on how the start of the sales in Q2 has continued since -- I assume, that you are at least seeing with much healthy inventories and maybe slightly easier comparable figure year-over-year, it might give indication that it's closer to growth again at least since you faced tough comparables in Q1.

[Max Strandwitz, executive]

Yes. So I think, I would put it probably in the perspective of, given that Q1 and Q2 is really where a majority of the helmets in snow is being produced. And then, of course, if Q1 is really soft and then, of course, if we say that in Q2, we will be back to a normal situation, you can expect that we are seeing a big improvement versus what we saw in Q1, and that's, of course, is happening. So, so far, we have seen a positive momentum in snow in Q2.

[Emanuel Jansson, analyst]

Okay. And I think final question from my side on the bike segment. As you mentioned, Shimano, I think Fox Factory and a lot of other companies are talking about the second half of 2024. And you said that -- and you claimed that to both you have the restocking effect and also the launch of new models into the markets.What are basically the retailers and the OEMs saying about these new models? Do they need to hit the market in -- or do they need to put orders in the second half of 2024 in order to be able to launch them in the 2025 bike season? And how important is it for them to actually come with new models to the markets?

[Max Strandwitz, executive]

Yes. So I think, I mean, when it comes to retailers, of course, the whole preorder situation that we used to see a lot of in previous year has disappeared to a much bigger extent when it comes to bike and so on.Normally what happens is that you get a little bit of a discount if you place preorders. But now given that, of course, cash is a lot more restricted at the moment and also, of course, no one wants to carry any risk, retailers are buying a lot more what they need and not caring about that extra discount of maybe 3% to 5%, more saying that this is what I will need for the coming season and so on. And given that cash is difficult, especially with a lot of bikes in stock and so on, they are much more cautious on how they are ordering.For us, we will not receive a lot of orders from the bike retailers in Q3 and Q4. But for us, that's when the start of production for 2025 starts, because, of course, we are integrated already in the factory. If you want to launch product in Q1 and Q2 2025 and also sell products in Q1 of 2025, then you need to start producing those already in Q3 and Q4. So the effects that we are expecting in the end part of the year is more relating to manufacturing of helmets in general.We expect 2025 to be a much more normal year and then, of course, having a much bigger effect of what we have done in the last years.

[Emanuel Jansson, analyst]

Okay. And I don't know if it's possible, but is it possible to maybe elaborate a bit on what will be the main sales growth driver in the second half year 2025. Is it the launch of new models or maybe the -- as I assume it, the primarily drive -- sorry, the primary growth driver here is the restocking effect, right, with maybe --

[Max Strandwitz, executive]

Yes, that's correct. It's the latter one. It's of course a much bigger effect. Because of course, if you also look at the prior year comparators where we were down like 50%, 60% in these quarters, launching models, of course, that will help. But the destocking effect that we have in our comparator is, of course, the biggest driver of that.

[Operator]

We will take the next question. And your next question comes from the line of Gustav Hageus from SEB.

[Gustav Sandström, analyst]

If I do my calculations correctly, it looks like service intakes are up 30% on a rolling 12 months basis, while goods -- sales of goods is down similar. Could you perhaps remind us of the dynamics between the 2, the lead-times between sort of a project being launched and service intakes being taken, and where sales of goods eventually pop out on other side?And if we can draw any conclusions on your market share, given those numbers for model year 2024-2025 helmets versus prior model years, that would be helpful.

[Max Strandwitz, executive]

So, of course, when it comes to our project revenues, why are we excited when those go up? That means that more customers are implementing models with Mips. And given that both in 2022 and 2023, we had record years in terms of the amount of projects that we did in a year. And of course, we said that we were close to doing one new helmet with Mips per working day. And of course, if we are up against that number, you know that it is actually a really, really high momentum.What would be the effect of those type of project is, of course, that normally the development time of a helmet, including Mips, it takes around 18 to 24 months before that hits the market. That's nothing to do with Mips. A normal lead-time of a Mips project is between 90 days to 150 days. So for us, it's not the lead-time.But of course, as an ingredient brand, we are part of a product and the product before it hits the market is around 18 to 24 months. So if you see project revenues now, you can expect that, that will hit the market in 18 to 24 months in a normal situation, of course. So that's why we are quite excited about that.And then when it comes to market share, and as you also saw in your initiation, you see that the penetration rate is increasing, especially in the important U.S. market, but also in Europe. And we see really, really good numbers there. And that, of course, is the sellout data.So we haven't found any place except for Wiggle in the U.K., where we haven't gained shares in terms of the last basically 2 years. So we are advancing our position, of course, and we are gaining shares, which I think you saw the same results when you did your survey.

[Gustav Sandström, analyst]

Okay. And for Q2 then, could you remind us last year, what was the share of snow helmets sold Q2 last year? And what was the sales decline in that category last year? That would be helpful.

[Max Strandwitz, executive]

Yes. So last year in Q2, the share of the total sales in snow was a little bit above 50%. But 50% is a very wrong number, so say 50%. And then the decline that we saw in Q2 last year was minus 40% -- due to prior year, of course.

[Gustav Sandström, analyst]

Sure. And so is it fair to interpret then your comments on Q1 here that, given that the organic decline of low-single digits now in the quarter that the bike, or everything but snow basically grew mid-to-high double-digits in Q1. Is that a fair assumption?

[Max Strandwitz, executive]

Yes. It is a fair assumption. Of course, Moto was 3%. So, of course, there you didn't see a double-digit, but it was still back in growth. We did see double-digit growth also in bike. And the question it's a very small numbers, but there you see significantly higher growth than that, of course. But then, of course, snow was down with around 20% in the quarter.

[Gustav Sandström, analyst]

Okay. And then finally for me, in Moto then, have you tried to assess the [ ordering ] impact in Europe from the ECE-05 standards being disqualified this year? And the model years for 2024, will they be sold at all in Europe within Moto? Or are producers more looking to get flush their inventory of these older standard helmets and go for 2025 models? Or what's your view there? And also your market share in 2025 models versus the prior year models in Moto would be helpful if you have a view on?

[Max Strandwitz, executive]

Yes. So I think, I mean, it's always difficult to predict because, of course, it relies a little bit on the general inventory situation. But at least what we have seen so far is that would they have started to roll out a lot more models with Mips. And of course, that was the comeback in growth that we see.And then when it comes to market share, of course, for us, the important market for Motocross is really the U.S. market, where we have really strong penetration. But of course, we start to see the same thing also in Europe. And it's not actually that different from what we see also in bike and snow in Europe that we have said that we want to do exactly the same thing in Europe that we have done in the U.S. market.In the U.S. market in bike and snow, we are close to or above 50% penetrated in the price points that we are in. When it comes to Motocross in the U.S., we are probably at around 25%. And that, of course, is increasing.But when you look at the European market for Motocross, we're only at like single-digit numbers. That's why we're also doing a big push in Motocross in Europe. That's why we -- one of the reason why we sponsor the World Motocross circuit to really make sure that we can increase the penetration also there.We have also done a lot of E-tail campaigns in Europe to really make sure that we get all the E-tailers informed about how to sell Mips, how do they explain Mips and so on. And that's what really starts to work.Since there is so many models with new helmets that will come out also in Moto, it's really difficult to say exactly what the share will be, but at least it's increasing.

[Gustav Sandström, analyst]

Okay. And then just a housekeeping question to finish, if I may. Gross margin was down a bit here in the quarter. Is it fair to assume that it mainly relates to increased share of service intake and sort of the lower base for the cost base to distribute it on? Or is there anything in the product margin that has changed?

[Max Strandwitz, executive]

No, that's actually very correct. And, of course, it is a small quarter. So of course, you have a bigger impact from project services, which has a lower margin. There is nothing underlying that keeps us below 70%. So it's just an effect of that. And then you have, of course, a small element of fixed cost that is also influencing the margin, but nothing that keeps us structurally under 70%.

[Operator]

We will now go to the next question. And your next question comes from the line of Daniel Thorsson from ABG Sundal Collier.

[Daniel Thorsson, analyst]

Quite a lot of questions already taken here, so that's good. But then the question on Q2. I mean, all your answers here, they tell us that the foundation for come back to growth looks increasingly supportive, which has also been kind of the case in the last couple of quarters, but that hasn't really materialized. But this time, what could really screw up not growing in Q2 really?

[Max Strandwitz, executive]

Yes. So based on what we know, at the moment, of course, we don't give any like forecast as such. But, at least, we're off to a good start and we see a lot of the trends in our favor. So if there is anything that we need to guide from in terms of be careful about this, there is not something that we know at the moment.

[Daniel Thorsson, analyst]

Clear. And then on the gross margin here that we touched upon in the end, not specifically for this quarter, but looking into 2025 with the new product mix of new solutions coming to the market, which I guess have slightly higher ASP as well, will that have any effect on the gross margin making us believe it should be some kind of off the 72% for next full year, either upwards or downwards? Or will we have the same gross margin profile in 2025, although you may have a different product mix and higher ASP on average?

[Max Strandwitz, executive]

Yes. We haven't changed our assumption on gross margin. We see roughly the same picture as we see today.

[Operator]

[Operator Instructions] We will now go to our next question. And your next question comes from the line of Carl Deijenberg from Carnegie.

[Carl Deijenberg, analyst]

So 2 quick ones from my side. Maybe first one with regards to snow. I can hear what you're saying about the comparisons and expectations here for H1. But could you just remind us what happened actually in Q1, Q2 last year? What was the reasons behind those sort of volatile numbers within snow? Because, I guess, the overall sellout development was not as dramatic.

[Max Strandwitz, executive]

No. I mean, you had a very strong development, of course, in the U.S. market, but it was not as dramatic, so it will drive these changes and so on. And of course, what you saw in Q1 last year was that a lot of the factories, they phased in a lot of their volumes into Q1, because they have so little to do in bike. And of course, they wanted to have any production that they could have. So they really -- we got the orders a lot earlier, and they were also not as sensitive when it comes to cash management and so on.And now when factories are starting to fill up, of course, the capacity is more being optimized and more closer to the end market. So it's more like -- and that's why we also see a phasing effect.

[Carl Deijenberg, analyst]

Okay, very clear. And just secondly, we are, also on Moto, just thinking a little bit about the sort of quarterly seasonality here. I mean, you have a quite clear seasonal pattern both in bike and snow considering the variations in the sellout. I'm just curious, is there any such sort of pattern you can say there was when you look at Moto? I guess, the historical development has been fairly volatile here if we took the absolute numbers on the quarter.So anything there when we look into '24 on the quarters and on the phasing to keep in mind would be helpful?

[Max Strandwitz, executive]

Yes. So I think Moto is probably the animal that has changed the most, because in Moto, there used to be a lot of preorders. So everyone was ordering for the fall and everyone was ordering for the spring, and there you could actually get 70% to 75% of your sales indication for the year.Given the challenging situation also with new standards and everything that has come into play, a lot of that preseason order pattern has disappeared because no one wants to take risk on inventory and so on. So we expect a lot more flattish development over the quarter and much more cash optimization than what we have seen before.Because you see that in most of the categories that people are optimizing cash flow, they order a lot more frequently, but smaller orders than they have done before, and we start to see that pattern also in Moto. So the whole seasonality thing, it will probably still be there a little bit, but not to the same extent as we saw in previous years.

[Carl Deijenberg, analyst]

Okay, very well. And just a final one from my side. If you could share, it would be quite interesting to know how many certified helmets are there with Mips integrated in safety for sell out in the market right now? How many models are there in total, both type 1 and type 2?

[Max Strandwitz, executive]

So if you will talk about exactly the day of 25th of April, I think it is 22 models in total that has been certified and are ready for sale. And then, of course, there will come more.

[Operator]

There are currently no further phone questions. I will hand the call back to yourself, Max.

[Max Strandwitz, executive]

Yes. Thank you. We also had a question if we had any patent infringement during the quarter, I assume. So no, at the moment, we haven't pressed any charges or claimed any litigation in the patent infringement case. Of course, we are always scanning the market if there are things that we deem to be infringing and so on. But we have not taken any of those actions in the first quarter.With that, I -- of course, as a closing remark, we are happy with the stable quarter, really good to see a lot of our categories starting to develop well. Important to note also for the year that, we are not expected to be that helped by the consumer market. If the consumer is turning around and becomes a lot more positive and has more confidence, fantastic.But for us, it's more of a recovery year, where we are relying much more of our customers buying from us instead of eating of inventory. And, of course, rolling out all the fantastic products that we have done during the last 2 years.Thank you for listening in and then speak to you again after the Q2 results announcement.

[Operator]

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.