Mips AB

STO:MIPS

Earnings Call Analysis

Mips Reports Strong Q2 2024 Growth Across Categories

Mips showcased a strong Q2 2024, boasting a 31% organic growth and notable performance in all regions and categories. The sport category, driven by bike and snow segments, saw a significant 33% growth, and improvements were also noted in the moto segment. The safety category experienced slower than expected volume growth, though important launches with MSA and Husqvarna were highlighted. Financially, the company reported an EBIT margin of 39% and operating cash flow of SEK 29 million. CEO Max Strandwitz remains confident in the long-term strategy, anticipating a gradual recovery and sustained growth throughout 2024.

Strong Financial Growth

Mips reported an impressive 31% organic growth in net sales for the second quarter. This marks a significant rebound, particularly after earlier market challenges. Year-to-date, the company's sales have shown a healthy growth of 14%, driven by strong performances across all categories and regions. Gross profit surged by 37%, resulting in a gross margin of 72.9%, which reflects an improvement of 3 percentage points from the previous year. The scalability of Mips's business model is evident as increased sales positively impact the overall profit and loss statement.

Category Insights and Recovery

The company highlighted robust growth in the sports segment, primarily driven by bikes, which saw a staggering 40-50% increase in sales for the quarter. Snow sports also contributed positively, reporting a 20% growth, with equestrian performance also noted, albeit being a smaller segment. Mips has enjoyed three consecutive quarters of growth in the bike category, reflecting a recovery in customer buying behaviors, especially in Europe, as inventory levels stabilize. Additionally, Mips's market share is expanding, with new models being launched, further improving future sales prospects.

Safety Sector Developments

Within the safety category, Mips introduced several notable products, including a partnership with MSA and a forestry helmet with Husqvarna. While these initiatives are welcomed, there is an expectation that volume growth in this segment will see an uptick in the coming quarters. The CEO indicated ongoing strong demand in both the U.S. and European markets, hinting at future revenue increases as volume begins to pick up.

Long-Term Guidance and Market Trends

Looking ahead, Mips maintains its stance on a gradual recovery throughout 2024. They anticipate sales growth to reflect normalized customer inventory orders rather than relying on destocking. Mips's management is optimistic that the bike category will drive this growth further, especially entering bike-heavy sales quarters with previously low comparators. The expectation is for a stronger performance as new models launch and market conditions improve, with the ultimate market normalization projected around 2025.

Robust Financial Position and Strategic Investments

Mips boasts a solid financial foundation with cash equivalents totaling SEK 266 million and an equity ratio of 85%. Despite a substantial dividend payout of SEK 159 million in May, the company remains debt-free, which bolsters investor confidence. Investments continue in strategic areas such as marketing and R&D, with the commitment to allocating 7% and 5% of net sales to these areas, respectively. Overall, Mips is well-positioned to navigate upcoming challenges, driven by strategic growth initiatives and strong market fundamentals.

Challenges Remain but Optimism Persists

Despite the positive outlook, Mips acknowledges the broader economic uncertainty, particularly concerning consumer sentiment in various regions. The firm noted that while North America remains strong, other areas face more significant challenges. However, Mips is confident in its premium positioning in the market, which has insulated it somewhat from the downturns affecting lower-tier products. Leadership is focused on maintaining momentum and adapting to market dynamics as they progress through 2024.

Earnings Call Transcript 2024-Q2

[Operator]

Good day, and thank you for standing by. Welcome to the Mips Interim Report Second Quarter 2024.

At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. [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.

[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 Mips' CFO, Karin Rosenthal, and we will walk you through the Q2 results presentation.

And if we start with the first quarter and the key highlights, it was a strong quarter with 31% organic growth. Year-to-date organic growth is now at 14%. We saw good development in all categories and in all regions, which is, of course, very good to see in these times. The interest in implementing Mips' safety system in new helmets remained high. You see that also in the project revenues in the quarter, and we continue to increase the market share and the penetration of Mips throughout the world. No change of previous assumption of a gradual recovery of growth in 2024 and that of course continue also into the second quarter, and we remain confident in our long-term strategy and our financial targets.

If we then start with sport, we saw strong development in bike and snow with 33%, but also good performance in the little, smaller subcategory, equestrian. We continued to see positive order momentum in bike and our previous assumption of recovery in bike remains. And we have now seen 3 quarters with consecutive growth in bike, which we're of course, happy to see after quite a tough market situation. We see that inventory levels have returned to a more healthy level, but the market conditions are still challenging around the world and we are long-term positive on the outlook in the sports category.

If we then look at Moto, we continue with a positive momentum there. Also, good performance with 14% growth in the quarter. The retail environment has improved a little bit, especially for the important US market, but it is still softer than normal. We did implement quite a lot of initiatives and they start to have an effect, especially through new launches, we also have improved sell-through activities on the market and, of course, we also signed new partnerships. We did also host a safety symposium together with MXGP and FIM in the end of May, where we saw great interest from both media and brands. And this is a really important event to improve awareness in the category. And of course, we also joined as the main sponsor of MXGP. So, very important events to drive awareness in the category and especially, around safety. And also here, we see no change to the long-term outlook. We continue to see a really strong interest of Mips in the category.

And then if we look in safety, we saw good development with 2 important launches in the quarter. First of all, with MSA, which is one of the bigger brands in the safety category, and also, we did launch a forestry helmet with Husqvarna. And we're really happy with the platform we have, where we can continue to drive growth and deliver volume in the category. The volume development, even though it's a record quarter for us, it's somewhat slower than we expected. Despite that, we see very good interest on both the US and the European market. But of course, we expect that to change. And already coming quarters, we expect that volume will start to increase more and we will see even stronger development in this category.

If we then look at the category performance in a little bit more in detail, sports were up 33% in the quarter. Year-to-date is now 14%, driven by both bike and snow. We see very good performance in equestrian, but of course, being a very small subcategory, it has limited effect on the total performance. But really happy with the development that we see in sports. In motorcycle, we continue to develop well and we see that numbers are increasing again after quite tough market conditions and we had 14% growth in the quarter. And if we look at the year-to-date performance, 8%. And of course, safety, small numbers, but of course, we see that that is going to change.

And with that, I hand over to our CFO, Karin Rosenthal.

[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 great development in the second quarter, with an increase in net sale of 31% and no change after adjusting for FX, net sales also increased 31% organically. Gross profit increased with 37% and we had a gross margin of 72.9%, and that's up 3 percentage points versus last year and the increase is mainly due to lower share of fixed costs and product mix effect. In OpEx, we continued to invest in our strategic priorities during the quarter. A strong EBIT, that was up 125% to SEK 52 million and the EBIT margin increased with 16.3 percentage points to 38.9% versus 22.6% last year. And this show how scalable our business model is. As net sales increase, it will run through and have a positive effect all through our P&L. And good operating cash flow of SEK 29 million in the quarter. And looking at our financial KPIs, 31% organic growth, an EBIT margin of 39%, and SEK 29 million in operating cash flow.

We then turn to next page and look at the development for the first 6 months. Net sales increased with 14% and no change after adjusting for FX, sales also increased 14% organically. Gross profit increased 16% and we had a gross margin of 71.6% versus 70.4% last year. In OpEx, we continue to invest in our strategic priorities, marketing, and R&D. And EBIT was up 70% to SEK 65 million and the EBIT margin improved by 10.1 percentage points to 30.3% versus 20.2%. And operating cash flow was SEK 20 million. And then looking at the financial KPIs, organic growth of 14%, EBIT margin of 30%, and operating cash flow of SEK 20 million.

If we then look at next page, and we are now on Page 9, balance sheet and cash flow. We have a strong cash position with cash and cash equivalents of SEK 266 million. We paid out dividend of SEK 159 million in May, corresponding to SEK 6 per share. And just to remind you that Mips don't hold any loans, and operating cash flow in the quarter amounted to SEK 29 million and we had equity ratio of 85%.

Over to Max.

[Max Strandwitz, executive]

Thank you, Karin. So, if we then summarize the quarter, it was a very good quarter with 31% growth. And we're really happy to see that we grew in all categories and also in all geographies, which is, of course, really good to see in these times. We see year-to-date sales now in positive territory with 14% growth year-to-date. And it was also really good for us to see that we actually, during the quarter, celebrated that we have delivered more than 50 million units to helmets equipped with Mips, which is, of course, a fantastic number and something to be really, really proud about. Our assumption remains the same as previous quarter. We do expect gradual recovery of growth throughout 2024. Our view is that our sales will reflect market sell-out with less impact from our customers destocking of their own inventory. So, what does that actually mean? I think it's really important to realize that the market that we see out there is not super strong. It's still a very challenged consumer. We see that in all markets, of course. What happened in 2023, which, of course, was the key results of us declining in sales, was that a lot of our customers, they were, instead of buying from Mips, taking from their own inventory. Now, when the situation have normalized, they start to buy from us again. And of course, if you have soft comparators, they start not to deplete their own inventory, but start buying from us again. Of course, that has an immediate effect in our numbers and, of course, that's one of the key driver of growth. And if you then also add that we are stealing market shares in all regions and implementing a lot of new helmets equipped with the Mips' technology, then of course, you get to good, strong growth number. And that's what we're seeing at the moment.

We're really happy with our strategy that we have. And you see that also during the quarter, we have a strong financial position and we have confidence in our long-term strategy and the delivery of our financial targets.

And with that, we open up for questions.

[Operator]

Thank you. [Operator Instructions] We will now take our first question. Please stand by. And the first question comes from the line of Adela Dashian from Jefferies.

[Adela Dashian, analyst]

My first question is related to the recovery in the bike category. I think this was much stronger, at least than what we had anticipated. Could you may be dive a bit deeper into explaining how it is that you're still seeing this high recovery rate in the second quarter, while some of your peers are being more impacted by the end market challenges? I mean, I understand that you're may be 1 quarter or 2 quarters behind the catch-up effect due to inventory levels now normalizing, but it still seems like you're having better traction than some peers. So, yes, that would be my first question.

[Max Strandwitz, executive]

And we are very happy, of course, about the performance and the recovery. Yes, and we are a bit ahead of our peers. But I think you need to add a lot of different effects. I think the first one is, of course, what I explained, that we now see that customers are buying from us again. We also see when inventory is being replenished, especially on the European market, that a lot of the new orders from customers is with Mips, because Mips is stealing a lot of market share. And when you now buy new inventory, of course, we see that there is an over-representation of Mips versus before. And that of course, we also see in the market share numbers. And if you are growing faster than the market, of course, that has a natural effect on the numbers. But then, of course, we also see, and I have endlessly talked about all the projects that we are doing, all the Mips implementation that we are doing, and of course, that also has an effect of the numbers. You also saw in the quarter that we had strong increase also of project revenues, which means new helmets equipped with Mips that will hit the market, that was up 38% in the quarter and we have also very strong performance year-to-date. So, of course, it's not one simple thing. It's the customers buying from us, we are stealing market share, and we are increasing the penetration. And going forward, you will see an effect of that. And of course, we grew somewhere between 40% to 50% in bike in the quarter. And now, of course, we go into the bike-heavy quarters with soft comparators. So, of course, we are very happy about that.

[Adela Dashian, analyst]

On the comment on the over-representation of Mips, would you relate that to the customer base that grew during the pandemic? Because I'm assuming that you've had this big pipeline of models that weren't launched in the past 2 years that are now being launched. And as a result of that, would you say that the magnitude of new model launches is more significant in 2024 or is that pipeline still going to be -- are you still going to be working through that pipeline next year?

[Max Strandwitz, executive]

Yeah. So I think, I mean, it's not customer that was actually recruited during the pandemic, but actually, we signed a lot of those customers already in 2019 and 2020. We had fantastic performance in Europe. Then, of course, we got hit by the unwind of the pandemic situation, which, of course, hit us as everyone else. But of course, together with those new customers, especially for Europe, we developed a lot of new models and we have started to roll-out the new models. And you will continue to see that effect also in 2025. We have said before that we expect the market to be relatively challenged also during the whole of 2024 and will not see a full normal market situation until 2025. And then, of course, all the remaining models that have been developed will hit the market then. So it will be a gradual roll-out. It has already started, but there is more to come also in 2025, of course.

[Adela Dashian, analyst]

Got it. All right. And when you say a normal market situation in 2025, what do you mean by that? I mean, I think you've previously stated that the market versus pre-pandemic has grown by about 20%. Is that number still relevant, or do you see further growth or even lower --

[Max Strandwitz, executive]

No, I think, I mean, when you look at the market today, we see a little bit growth in the European markets from very soft numbers, of course. There you see a very challenged consumer that is now starting to come back. Then when it comes to the US market, which has always been our main market, we are really happy with the performance there, but you didn't see the same collapse of the market. So the market has actually been quite strong during the last years and so on. So, of course, there you have a little bit tougher comparators, and you hear that from a lot of other companies reporting that the North American market is somewhat tougher, but it has also remained strong during the whole period and so on.

When we talk about the more normal situation is that you start fresh. You start fresh with inventory levels, then of course, you have a consumer that is a little bit stronger, and I think everyone in the industry also expect that the markets will start growing much more during the whole of 2025, with a stronger consumer, of course, driving that behavior. If you look at participation levels when it comes to bicycling and also commuting, they are actually as strong as they were even at the peak pandemic situation. So you see really high participation, but that hasn't been reflected in numbers around the world yet.

[Adela Dashian, analyst]

And then maybe 1 on safety. Could you explain why we're not really seeing the volumes pick up? Is this still the certification process of the final helmet models that is lagging or are you seeing even more weakness now with the construction industry being in a slowdown?

[Max Strandwitz, executive]

Yeah. So, no, it has nothing to do with certification. All of that has been done. We were expecting maybe a little bit more to come in already in Q2. We see really good tractions and so on. And there is basically nothing holding us back. Sometimes you have orders coming in one quarter or the other quarter, but we are not concerned about the development. And I think it's also -- when we talk about safety, it's still the best quarter we had in safety so far. Of course, still somewhat lower than expectation, but our expectation, of course, in safety is super high. And of course, when you don't deliver on that, you get a little bit disappointed. But we see that the volumes are picking up already in Q3 and Q4. So we are nothing really worried about that.

When it comes to the soft market, our key market is, of course, the US market, and the construction market there is quite strong, actually. You see a couple of really big infrastructure projects and so on. So there, we are not seeing the trend that we have seen in Europe with very low amount of construction projects and so on. So, in the US, we haven't seen any weakness at all. Of course, when you look at the Nordic construction market, it's a very challenged market, but it's only a fraction of our sales and doesn't impact the numbers as such.

[Adela Dashian, analyst]

Got it. And then just a final one, if I may. On the cost base, do you feel comfortable with the current level or do you see need to increase your spending or I guess, maybe decrease your spending going forward?

[Max Strandwitz, executive]

No. I mean, we were holding back on some recruitments for 1 quarter or 2 quarters. Now, we will start, and have already started recruiting again, especially on the engineering side because of the interest we see in new products and also projects, of course. So that we'll have. But we are a very scalable business model, and when we increase our OpEx spend, it's SEK 1 million or SEK 2 million at the most per quarters. So it doesn't have a big effect on the total. So yes, it will continue to increase. We have 2 very important strategic priorities. One is the marketing spend, where we said we want to spend over-time, 7% of net sales, and of course, that we will do. And then around 5% on R&D, because, of course, if you want to maintain a superior technology, you also need to invest behind it, and that's what we will do.

[Operator]

We will now take our next question. And the next question comes from the line of Carl Deijenberg from Carnegie.

[Carl Deijenberg, analyst]

So, maybe first 2 questions following up on the momentum that you're seeing in bike. I was just a little bit curious, the pick-up, I mean, you've been growing there for 3 quarters in a row now, but obviously accelerating quite a bit here in Q2. And I just wanted to ask, is that predominantly being driven by the larger customers of yours? I know that you have a couple of ones that account for a couple of percentage or is it a sort of a wide recovery, also among your smaller customers?

[Max Strandwitz, executive]

Yeah. I mean, you see across most accounts that they are coming back and so on. So I wouldn't attribute it only to the large customers. But of course, we see Europe being a little bit ahead of the curve. So, of course, European brands are driving the performance more than North America, of course. But I would say it's across the board.

[Carl Deijenberg, analyst]

And then secondly, just on the theme, I just want to ask also the sort of monthly momentum here in Q2. I mean, it's a quite significant sequential pickup here for Q1. And I just wanted to ask, is that being gradual throughout the monthly development here in Q2 or has it been fairly much in line with what you were expecting yourself when you were going into the quarter?

[Max Strandwitz, executive]

Yeah, the quarter has been very much as we expected. I wouldn't say that 1 month was better than the other. But yes, it was very much in line with our expectation.

[Carl Deijenberg, analyst]

And then finally, I had a question also on safety. I mean, we talked about the platform and I know that you have a brand base now, which is quite significant if we compare it with your addressable market. But would it be possible to talk anything, I mean, the revenue potential with existing platform, I guess, you're talking about the ramp-up and the volumes are still obviously low. But how much could you essentially handle or what kind of revenue potential could you see longer term just with existing brands that you're having right now? I mean, when would you sort of start focusing again to adding more brands here? How far out would that have to be, basically?

[Max Strandwitz, executive]

Yeah. So if we look at our platform today, we have released partnership with 16 brands. If you talk about how much they represent of the total market, it's something like 30% to 40% of the total addressable market. So, of course, we are very happy with that. When we add new brands, it's not so much to directly generate volumes. For us, it's more important -- when you are an ingredient brand, your success depends on how good partners you choose. So, of course, for us, it's really, really important that we pick the right ones. Sometimes we need to turn customers down, because they don't elevate our story and we don't elevate their story so much. They maybe only sell on price and so on. So, for us, when we add a new brand, we do it for the right strategic reasons and that they will drive the Mips brand equity, which is, of course, really important when you establish yourself in a category. So we are not actively recruiting more brands just to add more brands. We're really happy with the performance we have. And for me, and as you have also seen in the report, it's important to drive sell-through. To just add another brand without driving sell-through doesn't help us anything. We really want with the brands we have the moment to start generating volumes to show what we can do on the market. That's the key focus. If we get the right brands, then of course, we will continue to add them. But we will not only add them just to get volumes, because the platform we have is enough to generate a lot of growth.

[Carl Deijenberg, analyst]

Okay, very well. And just maybe shortly, finally, I mean, you touched upon also the revenue development in the sort of services category, I mean, the invoicing that you do for testing and so on with the brands. And I just wanted to ask, I mean, given that you're ramped up or added so many brands in safety, is that the main contributor in an absolute number perspective or is it still growing also in your more mature categories, like bike and snow, for example?

[Max Strandwitz, executive]

Yeah, the biggest contributor for us is still bike. That's by far the biggest category for us, and that's where we add most helmets equipped with the Mips' technology.

[Operator]

We will now take our next question. Please stand by. And the next question comes from the line of Emanuel Jansson from Danske Bank.

[Emanuel Jansson, analyst]

I think we started to touch slightly upon the bike segment here as well. Just going forward into the second half of 2024, how should we assume the seasonal pattern to be for the second half of 2024, given that the market has changed slightly? I mean, bike normally consists of, like, the majority of sales in Q3 and Q4. Should we still expect the similar patterns here as well as historical patterns?

[Max Strandwitz, executive]

Yes, we believe so. I mean, if we look at historical patterns, Q3 has historically been a little bit lower or smaller than Q2. Of course, we see quite a big proportion of the bike sales there, so that we probably can expect to continue. And then, of course, when you go into Q4, that's really the big bike quarter, is not because there is a lot of bike helmets that are sold on the market in Q4, it's because that's when you see all the helmets that will be produced for the start of the next season. So basically, the helmets that we'll deliver to bike shops in Q1 and Q2 in 2025. So, of course, that's why we call it the big bike quarter, because, of course, that's when a lot of the bike helmet sells occur. So we expect the same seasonal patterns as before. And of course, seeing the good performance in bike is of course, helping that assumption.

[Emanuel Jansson, analyst]

Yeah. And then that's also why we should expect that the bike recovery should probably continue to pick up gradually from here, right?

[Max Strandwitz, executive]

Yes, that's our assumption.

[Emanuel Jansson, analyst]

And just, if there are any, what risks should we consider within the bike segment that it might not grow as rapidly as you are estimating in the rest of 2024?

[Max Strandwitz, executive]

Yeah. I mean, it is uncertain times. I think we are all seeing that. Of course, the things that we have under our control, we are still doing what we can to deliver that, adding more employees, delivering a lot of projects and so on, making sure that the Mips products steal market share, increase the penetration on the market. That's what we control. Then, of course, a lot of the brands have very thin balance sheet. Some of them can't afford to grow as much as they want, probably. So, of course, it's a very delicate balance in terms of growing, growing with the right customers and so on. But what we have in our control, we are quite positive about. But it is uncertain times and uncertain market conditions. But we haven't seen anything that is changing our picture at the moment. That's why we still assume gradual recovery of growth in bikes.

[Emanuel Jansson, analyst]

That's very clear. Maybe last question from my side. I think we have for quite some time now seen quite solid development within the region of Asia and Australia. Can you maybe elaborate a bit on the strong development over there?

[Max Strandwitz, executive]

Yeah. I mean, we have done a couple of initiatives, especially for China, where we see a growing interest. We don't go with all brands there. We have selected a couple of brands, which we are partnering up with. For us, it's still very much an educational journey, because there, you need to get the consumer that previously maybe paid $10, $20 for a helmet to pay maybe 2 times or 3 times as much. So, of course, they need to understand why they're paying a little bit more for a helmet with Mips. But we start to see that that educational program is starting to have an effect. We did a big educational program together with Decathlon in a lot of their main stores in China. And it's all about explaining to the Chinese consumer why Mips is important and the difference we make to a helmet. And of course, that's what we do. So we are happy with the performance that we see on the Asian market in general.

[Emanuel Jansson, analyst]

And that's mainly by bike sales or bike helmets?

[Max Strandwitz, executive]

Yes, there is a little bit of snow sales also, but the key one is, by far, bike.

[Emanuel Jansson, analyst]

And do you see, like, any competition in that market from other competing brands within your solution?

[Max Strandwitz, executive]

No, I think the main competitor that we have on those markets is the helmet that doesn't have any technology, because, for us, it's more, like I said, an educational journey that we need to do. So it's not that we are competing against someone else. We are really trying to convince the consumer that Mips-equipped helmet is what they should go for. So, no, the competition lies, as in any other market, with the helmet that doesn't have any technology at all.

[Operator]

We will now take our next question. And the next question comes from the line of Daniel Thorsson from ABG Sundal Collier.

[Daniel Thorsson, analyst]

Lots of questions already covered bike here. So, I take a cost question here. Number of employees were down in Q2 versus Q1. Can you explain why and what type of roles, and is it anything you will regain in terms of hiring in the second half?

[Max Strandwitz, executive]

Yes. So, yes, you're right. We decreased with a couple of employees. First of all, we did some changes to the organization. And like I said, for 1 or 2 quarters, we didn't recruit. So, of course, you have a natural decrease of employees. I think it was 2 in the quarter. So, it's not a major number, but you will see that it starts to increase. We have announced 4 more engineers on the implementation side, because, of course, we see a heavy project load, and we're also adding another 2 product development engineers, because, of course, we continue to develop great product and great products need good engineers and that's what we are adding. So, like, I mean, it's small numbers, but yes, we will continue to add some employees.

[Daniel Thorsson, analyst]

Yeah. And then a question on the gross margin, which was quite good here at 73%. It is where you have been historically and where you should be as well, but were there any positive items in there to be aware of or is that the level we should expect ahead?

[Max Strandwitz, executive]

No, we have said that we will try to maintain a gross margin of above 70%. Of course, the drivers today that you see is that there is a positive element of product mix effect. And what does that mean? When we have a higher proportion of product sales instead of only revenues from the projects and so on, we have higher margins of those. So, of course, that has a positive effect. And then also, on the cost of goods sold, you have a small share of fixed cost. And of course, as you increase the revenue base, the share of those will also have a positive effect on the gross margin.

So I would say those are the 2 key effects. We haven't touched price or anything like that. And even though there we have got a lot of requests to do promotional campaigns and so on. Coming back to the brand, we think we have a very strong product and we don't want to dilute the brand by doing a lot of promotional effects. So we kept the price and, of course, the effects that you see in the quarter is from product mix and some benefits of scale of growing faster.

[Daniel Thorsson, analyst]

And then final question, on the 31% organic growth year-over-year, can you explain what was volume, what was potentially changes in average selling prices, given that you have more products in your portfolio today than 5 years back?

[Max Strandwitz, executive]

Yeah. So we haven't actually disclosed that, but there is a slight positive price effect from having a more premium product mix.

[Operator]

As there are no further questions on the phone line, I would now like to hand back to the room for any questions on the webcast.

[Max Strandwitz, executive]

Yeah. So, we have a couple of questions. The first one, can you please give us a bit more colors on the dynamic in the US?

We are seeing a slowdown in terms of consumptions, and I think most of the companies that are reporting today see a little bit more careful US consumer. We still see quite a strong consumer, of course, compared to the European market, since they didn't have the same slowdown before. But I think it's also important to say that Mips is in premium price segments, and there, we don't see a challenged consumer. Maybe we are helped a little bit by that. But we still consider and are quite positive about the US market.

And then there is a question on the POC just launched a new helmet, which did not include Mips. And they talked about the safety story and so on.

And for us, that is not something that is unnormal. POC has, by far, a majority of their helmets with the Mips' technology and they keep on adding new ones. If they want to do differentiation and talk about other things, of course, that's their prerogative to do so. So, nothing that we are extremely concerned about and so on. We still see, like I said, that they have a majority of their products with Mips and keep on adding Mips.

And then there is a question, for Q2, what was the percentage of sport was bike and what was snow and others?

So when we look at the sales in Q2, around 50% was driven by the snow subcategory and 40% of the sales was the bike subcategory.

And then there was a question, what was the growth of snow and bike individually?

Snow grew around 20% in the quarter and bike grew between 40% to 50% in the quarter.

And then there is a question also, you speaking about gradual recovery. Does that mean that we should expect an acceleration of growth quarter versus quarter?

And yes, we say, and we talk about a gradual recovery of growth, which means that, of course, the growth is expected to be higher. That, of course, is helped that we have very soft comparators in both Q3 and Q4. And I think everyone remember that we had quite soft quarters in those periods last year, which, of course, helping the growth as such.

And do you expect bike growth of 40% to 50% to accelerate from here?

And of course, given that we said that we expect a gradual recovery, and we already are at 40% to 50%, we could probably expect somewhat higher numbers in the coming quarters.

With that, I don't think we have anymore open question. Nothing on the web and nothing waiting. So, thanks for listening in. I hope that you all will have a great summer, and speak to you again after the Q3 reporting. Thanks everyone for listening in.

[Operator]

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