Mips — Interim / Quarterly Report 2019

May 3, 2019

INTERIM REPORT JAN – MAR 2019

JAN - MAR

• Net sales increased by 91% to SEK 44.9m (23.6). Adjusted for currency exchange rate effects, the increase was 71%
• Operating profit increased to SEK 11.8m (1.8)
• Operating margin increased to 26.3% (7.6)
• Cash flow from operating activities decreased to SEK 7.7m (8.4)
• Earnings per share diluted, amounted to SEK 0.38 (0.07)

THE MIPS GROUP IN BRIEF*

	2019 Jan-Mar	2018 Jan-Mar	∆%	2018/2019 LTM	2018 Jan-Dec
SEKm
Net sales	44.9	23.6	91	213.9	192.5
Gross profit	32.7	17.3	90	157.6	142.2
Gross margin, %	72.8	73.3	-	73.7	73.9
Operating profit (EBIT)	11.8	1.8	557	83.0	73.0
Operating margin (EBIT-margin), %	26.3	7.6	-	38.8	37.9
Profit for the period	9.7	1.7	482	64.4	56.4
Earnings per share basic, SEK	0.38	0.07	482	2.55	2.23
Earnings per share diluted, SEK	0.38	0.07	471	2.52	2.21
Cash flow from operating activities	7.7	8.4	-9	68.3	69.1

For definitions and description of performance measure and alternative performance measures, please visit http://www.mipscorp.com/

* In accordance with IFRS 16 Leases prior comparator has not been adjusted

CEO'S COMMENTS

THE YEAR STARTED OFF STRONG

The year started off strong, with a first quarter that showed substantial improvements in both sales and profitability. Net sales increased by 91% to SEK 44.9m (23.6). Adjusted for currency effects, we grew organically by 71% in the quarter. All helmet categories showed a positive development led by the Snow category. Comparative figures appear more positive since last year's first quarter was a somewhat weaker quarter than the other quarters. Most of the growth came from our existing customers, but we also saw exciting launches from new customers during the quarter. We continue to see great interest in all our categories from new customers, while existing customers continue to broaden their product offering with MIPS solutions.

EBIT for the quarter amounted to SEK 11.8m (1.8) and we achieved an operating margin of 26.3%. I am very pleased to see that the first quarter, which has historically been our financially weakest, now shows good profitability driven by increased sales. Again, this confirms the scalability of our business model.

CONTINUING TO BE THE LEADING TECHNOLOGY There was a lot of turbulence in the market as our customer Bontrager launched a "new" technology under the name "WaveCel" with bold claimed test results. MIPS has carried out rigorous tests of the technology but has not been able to validate the claimed results.

We are convinced that MIPS BPS is the leading technology for protection against rotational movements in the brain. MIPS is unique as an ingredient brand with our ability to work with all brands and implement our technology in most types of helmets in a cost effective way.

It is positive that more and more helmet brands confirm the importance of reducing the effects of harmful rotational movements, but unfortunately there is still a lack of an industrywide standard by an independent testing body, making it more difficult for both the industry and consumers to compare different technologies.

EXCITING LAUNCHES AT TRADE SHOWS

At the world's largest winter trade show, ISPO in Munich, five customers; Head, Vola, Cebe, Protec and Flaxta launched their first snow helmets with MIPS BPS. In total, 14 new helmet models equipped with MIPS solutions were launched at the trade show.

We also saw interesting launches in the Equestrian category at a trade show in Birmingham where two customers showed their new helmets with MIPS: Champion and Charles Owen. Together with Charles Owen, MIPS received the award as the best safety product.

FIRST QUARTER A BIG LEAP TOWARDS 2020

With this strong quarter behind us and an active project portfolio, together with new and existing customers, I look forward with

confidence to the coming quarters and the continued journey towards our 2020 financial targets.

JOHAN THIEL President and CEO

JAN - MAR

NET SALES

Net sales for the first quarter amounted to SEK 44.9m (23.6), an increase of 91%. Adjusted for exchange rate effects, organic growth was 71%. The increase in net sales remains mainly due to increased demand from existing customers. The growth rate was somewhat affected by a soft prior year comparator. Growth came mainly from the categories Bike, Snow and Motorcycle.

GROSS PROFIT

Gross profit increased by 90% to SEK 32.7m (17.3). The gross margin decreased by 0.5 percentage points to 72.8% (73.3). The decrease in the gross margin is mainly due to a change in the sales mix.

OPERATING PROFIT (EBIT)

Operating profit increased to SEK 11.8m (1.8), corresponding to an operating margin of 26.3% (7.6). The improvement in operating profit is mainly due to higher sales, positive impact of exchange rates, legal costs in the previous year's comparative figures partly offset by higher costs for strengthening the organization, and negative impact from currency derivatives.

Selling expenses increased to SEK 9.2m (6.2), mainly through investment in the organization and increased initiatives in marketing. Administrative expenses during the quarter amounted to SEK 7.3m (7.2). The increase in administrative expenses is mainly due to costs related to strengthening the organization partly offset by legal costs in the previous year's comparative figures. Legal expenses during the quarter amounted to SEK 0.1m (1.2). Research and development costs increased to SEK 3.6m (2.6), mainly through increased investments in product development.

PROFIT FOR THE PERIOD AND EARNINGS PER SHARE

Profit before tax amounted to SEK 12.5m (2.2). Reported tax for the quarter amounted to SEK - 2.8m (-0.5), corresponding to an effective tax of 22.3% (22.6). Profit for the period was SEK 9.7m (1.7). Earnings per share diluted, amounted to 0.38 (SEK 0.07).

CASH FLOW

Cash flow from operating activities decreased to SEK 7.7m (8.4) despite the significant earnings improvement. The decrease is mainly due to paid income tax of SEK 6.6m related to the previous year.

Cash flow from investing activities was SEK -1.6m (-1.7). Cash flow from financing activities was SEK -0.4m (0.0). Cash flow for the period amounted to SEK 5.6m (6.7).

FINANCIAL POSITION

The Group's total assets as of 31 March, 2019 amounted to SEK 333.4m (239.8). Short-term investments of SEK 218.5m are in their entirety invested in interest-bearing funds. The equity / assets ratio was 85% (92). Cash and cash equivalents including short-term investments as of 31 March, 2019 amounted to SEK 248.7m (186.7). As a result of the introduction of IFRS 16, the company's fixed assets have increased by SEK 9.4m. For further information, see page 9. Deferred tax receivables amounted to SEK 1.0m net and are explained in their entirety by temporary differences mainly relating to derivatives.

Reported values for assets and liabilities are in all material respects consistent with fair value. In order to reduce the Group's short-term currency exposure, certain currency derivatives have been entered into with a bank. The derivatives are valued at fair value and as of 31 March, 2019 amounted to a financial liability of SEK -4.8m (-0.9). Hedge accounting is applied, whereby the unrealized change in the fair value of the derivatives is primarily reported against Other comprehensive income.

INVESTMENTS

Investments during the first quarter amounted to SEK 1.6m (1.7). Investments in intangible fixed assets amounted to SEK 1.4m (1.3) and were mainly attributable to patents. Investments in tangible fixed assets were SEK 0.2m (0.4). As of March 31, 2019, the Group had no significant commitments related to investments.

PARENT COMPANY

Net sales for the parent company during the quarter amounted to SEK 33.2m (19.1). Profit for the period was SEK 8.6m (1.3) during the quarter.

EMPLOYEES

The average number of employees were 39 (33) in the first quarter, of whom 10 (8) were employed in the Chinese subsidiary. The number of employees at the end of the period were 39 (32), of whom 10 (8) employed in the Chinese subsidiary.

* Adjusted for costs in connection with the company's IPO, see pages 12–13 for more information.

CONDENSED CONSOLIDATED INCOME STATEMENT

	2019	2018	2018
SEKt	Jan-Mar	Jan-Mar	Jan-Dec
Net sales	44,941	23,551	192,534
Cost of goods sold	-12,237	-6,299	-50,346
Gross profit	32,704	17,253	142,188
Selling expenses	-9,212	-6,190	-26,099
Administrative expenses	-7,294	-7,204	-27,595
Research and development expenses	-3,640	-2,628	-12,145
Other operating income and expenses	-746	566	-3,387
Operating profit/loss	11,812	1,797	72,962
Financial income and expenses	689	357	-124
Net financial items	689	357	-124
Profit/loss before tax	12,501	2,154	72,838
Income taxes	-2,792	-486	-16,440
Profit/loss for the period	9,709	1,668	56,398
Earnings per share basic, SEK	0.38	0.07	2.23
Earnings per share diluted, SEK	0.38	0.07	2.21
Average number of shares for the period, basic (thousand)	25,300	25,300	25,300
Average number of shares for the period, diluted (thousand)	25,778	25,300	25,545

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	2019	2018	2018
SEKt	Jan-Mar	Jan-Mar	Jan-Dec
Profit/loss for the period	9,709	1,668	56,398
Other comprehensive income
Items that may subsequently be transferred to profit or loss
Foreign currency translation	291	51	2
Changes in the fair value of cash flow hedges	-2,369	-1,654	-1,914
Tax on components in other comprehensive income	507	364	421
Items that cannot be transferred to profit or loss	-	-	-
Other comprehensive income for the period	-1,572	-1,239	-1,491
Comprehensive income for the period	8,138	429	54,907

CONDENSED CONSOLIDATED BALANCE SHEET

SEKt	31 Mar 2019	31 Mar 2018	31 Dec 2018
ASSETS
Non-current assets
Intangible assets	12,307	8,251	11,059
Property, plant and equipment	3,584	2,781	3,728
Right-of-use assets	9,397	-	-
Deferred tax asset	1,083	8,585	720
Long term receivables	482	561	482
Total non-current assets	26,854	20,177	15,990
Current assets
Inventories	2,947	1,977	1,845
Accounts receivable	49,517	25,260	54,411
Other current receivables	5,406	5,651	4,638
Current investments	218,531	163,921	205,692
Cash and cash equivalents	30,179	22,827	36,817
Total current assets	306,580	219,635	303,403
TOTAL ASSETS	333,434	239,812	319,393
EQUITY AND LIABILITIES
Equity
Share capital	2,530	2,530	2,530
Other paid in capital	243,250	243,406	243,250
Reserves	-2,694	-870	-1,122
Retained earnings incl profit/loss for the period	40,689	-23,907	30,980
Total equity	283,775	221,159	275,637
Non-current liabilities
Lease liability	7,469	-	-
Total non-current liabilities	7,469	-	-
Current liabilities
Lease liability	1,820	-	-
Accounts payable	16,933	6,700	20,111
Other current liabilities	23,437	11,954	23,645
Total current liabilities	42,190	18,654	43,756
TOTAL EQUITY AND LIABILITIES	333,434	239,812	319,393

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	2019	2018	2018
SEKt	Jan-Mar	Jan-Mar	Jan-Dec
Opening equity for the period	275,637	220,574	220,574
Change accounting policies*	-	156	156
Adjusted opening equity for the period	275,637	220,730	220,730
Comprehensive income for the period
Profit/loss for the period	9,709	1,668	56,398
Other comprehensive income for the period	-1,572	-1,239	-1,491
Comprehensive income for the period	8,138	429	54,907
Closing equity for the period	283,775	221,159	275,637

* Relates to change of accounting standard for IFRS 9 and IFRS 15

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	2019	2018	2018
SEKt	Jan-Mar	Jan-Mar	Jan-Dec
Operating activities
Profit before tax	12,501	2,154	72,838
Adjustment for non-cash items	-811	-19	3,891
Income taxes paid	-6,605	-	-
Cash flow from operating activities before change in working capital	5,085	2,135	76,729
Cash flow from changes in working capital
Increase (-)/decrease (+) of inventories	-1,020	-921	-843
Increase (-)/decrease (+) of current receivables	5,549	11,458	-17,625
Increase (+)/decrease (-) of current liabilities	-1,963	-4,283	10,821
Cash flow from operating activities	7,651	8,389	69,083
Investing activities
Acquisition of intangible assets	-1,377	-1,327	-4,507
Acquisition of property, plant and equipment	-240	-364	-2,216
Disposal of property, plant and equipment	-	3	3
Disposial of financial asset	-	-	78
Cash flow from investing activities	-1,617	-1,688	-6,643
Financing activities
Amortization of lease debt	-432	-	-
Cash flow from financing activities	-432	-	-
Net change in cash & cash equivalents	5,602	6,701	62,440
Cash & cash equivalents at beginning of period	242,510	179,774	179,774
Exchange rate difference on bank holdings	598	273	296
Cash & cash equivalents at end of period	248,709	186,748	242,510

CONDENSED PARENT COMPANY INCOME STATEMENT

	2019	2018	2018
SEKt	Jan-Mar	Jan-Mar	Jan-Dec
Net sales	33,217	19,119	148,976
Cost of goods sold	-2,638	-2,797	-14,630
Gross profit	30,579	16,322	134,345
Selling expenses	-8,880	-5,888	-24,883
Administrative expenses	-7,360	-7,204	-27,595
Research and development expenses	-3,375	-2,430	-10,974
Other operating income and expenses	-746	566	-3,363
Operating profit/loss	10,219	1,366	67,530
Financial income and expenses	857	358	-129
Profit after financial items	11,076	1,723	67,401
Appropriations	-	-	-398
Appropriations	-	-	-398
Profit/loss before tax	11,076	1,723	67,003
Income taxes	-2,434	-394	-14,993
Profit/loss for the period	8,642	1,329	52,010

CONDENSED PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

	2019	2018	2018
SEKt	Jan-Mar	Jan-Mar	Jan-Dec
Profit/loss for the period	8,642	1,329	52,010
Other comprehensive income
Items that may subsequently be transferred to profit or loss
Changes in the fair value of cash flow hedges	-2,369	-1,654	-1,914
Tax on components in other comprehensive income	507	364	421
Items that cannot be transferred to profit or loss	-	-	-
Other comprehensive income for the period	-1,862	-1,290	-1,493
Comprehensive income for the period	6,779	39	50,518

CONDENSED PARENT COMPANY BALANCE SHEET

SEKt	31 Mar 2019	31 Mar 2018	31 Dec 2018
ASSETS
Non-current assets
Intangible assets	12,307	8,251	11,059
Property, plant and equipment	3,481	2,669	3,619
Other financial assets	2,218	9,731	1,876
Total non-current assets	18,006	20,651	16,555
Current assets
Inventories	757	655	568
Accounts receivable	31,644	20,560	36,755
Other current receivables	5,882	5,941	4,995
Current investments	218,531	163,921	205,692
Cash & cash equivalents	28,997	22,235	34,699
Total current assets	285,811	213,313	282,710
TOTAL ASSETS	303,816	233,964	299,265
EQUITY AND LIABILITIES
Equity
Restricted equity	4,219	4,219	4,219
Non restricted equity	273,524	216,266	266,744
Total equity	277,743	220,485	270,963
Untaxed reserves	398	-	398
Total untaxed reserves	398	-	398
Current liabilities
Accounts payable	7,411	4,470	7,771
Other current liabilities	18,264	9,010	20,132
Total current liabilities	25,675	13,479	27,903
TOTAL EQUITY AND LIABILITIES	303,816	233,964	299,265

INFORMATION ABOUT THE PARENT COMPANY

MIPS AB (publ), Corp. Reg. No. 556609-0162 is a Swedish public company with its registered office in Stockholm, Sweden. The company's shares are listed on Nasdaq Stockholm Mid Cap under the "ticker" MIPS.

ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretative statements by the IFRS Interpretations Committee (IFRIC) as adopted by the European Commission for use in the EU that were presented in the Group's 2018 Annual Report. The standards and interpretative statements applied were in effect as of 1 January 2019 and had been adopted by the EU. Changed accounting policies at 1 January 2019 is described below. Furthermore, the Swedish Financial Reporting Board's recommendation RFR 1 Supplementary Accounting Rules for Groups was applied. This interim report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and the applicable provisions of the Annual Accounts Act and the Securities Market Act. The interim report for the parent company was prepared in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. Disclosures in accordance with IAS 34.16A are incorporated in the financial statements and its accompanying notes as well as in other parts of this interim report.

NEW ACCOUNTING STANDARDS FROM FIRST OF JANUARY, 2019

The Group applies IFRS 16 Leases from 1 January, 2019. The parent company does not apply IFRS 16 in accordance with the exception contained in RFR2. At the transition to IFRS 16, the Group has chosen to apply the modified retroactive approach. Its meaning and effects on the Group are described below. Previously, the Group classified leasing agreements as operating or financial leases based on whether the leasing agreement transferred the significant risks and benefits that ownership of the underlying asset brings to the Group. According to IFRS 16, the Group recognizes use rights assets and leasing liabilities for most leasing agreements, ie the leasing agreements are included in the balance sheet and pertain to the Group as a whole leased premises in Sweden and in China. The Group applies the provisions on relief rules for shortterm leases and leased assets with low value.

At the transition on 1 January, 2019, the lease liabilities have been valued at the present value of the remaining leasing fees, discounted by the Group's marginal borrowing rate on the first day of application. The right of use was valued at an amount equivalent leasing debt, adjusted for prepaid leasing fees. The changeover on 1 January, 2019 resulted in the reporting of right of use assets of SEK 9.9m and lease liabilities of SEK 9.7m, where the difference of SEK 0.2m relates to adjustment for prepaid leasing fees. The transition therefore had no initial effect on equity and in accordance with IFRS 16 no

VALUATION BASIS APPLIED WHEN PREPARING THE FINANCIAL STATEMENTS

Assets and liabilities are recognized at historical cost, except for currency derivatives and shortterm investments which are based on fair value.

FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY

The parent company's functional currency is Swedish kronor (SEK), which is also the presentation currency of the Group. This means that the financial statements are presented in SEK. All amounts, unless otherwise stated, are rounded to the nearest SEKt.

JUDGMENTS AND ESTIMATES IN THE FINANCIAL STATEMENTS

The preparation of the financial statements in accordance with IFRS requires that the company management make judgments and estimates and make assumptions that affect the application of the accounting policies and the amounts of assets, liabilities, income and expenses recognized. The actual outcome may deviate from these judgments and estimates. Estimates and assumptions are reviewed regularly. Changes in estimates are recognized in the period in which the change is made if the change only affects that period, or in the period in which the change is made and future periods if the change affects the period in question and future periods.

ADJUSTMENTS

Some amounts in the financial information presented in this report have been rounded, and thus the tables do not necessarily tally.

ALTERNATIVE PERFORMANCE MEASURES

The company is following The European Securities and Markets Authority (ESMA) guidelines on alternative performance measures. Alternative performance measures are financial measures that cannot be directly read in or derived from the financial statements. These financial measures are intended to help company management and investors analyze the Group's performance. Investors should not consider these alternative performance measures to be a substitute for the financial statements prepared in accordance with IFRS, but rather a supplement to them. Explanation of alternative performance measures, see page 12-13. Definition of alternative performance measure is presented in the annual report and on www.mipscorp.com

SEGMENT

MIPS operations are managed as one segment since this reflects the Group's operations, financial monitoring and management structure.

SEASONAL VARIATIONS

MIPS sales are partly subject to seasonal variations. The company's net sales and EBIT have historically been weakest during the first quarter and strongest during the fourth quarter.

RISKS AND UNCERTAINTIES

MIPS is an international company and, as such, its operations can be affected by a number of risk factors in the form of both operating and financial risks. Risks related to the industry and the company include, but are not limited to, market acceptance and knowledge of both the harmful effects of rotational motion of the brain and increased competition. As an ingredient brand, MIPS is also dependent upon its customers' ability to reach end-users and on end-user demand. An economic downturn or change in end-user's preferences, could have a negative impact on the Group's net sales and profitability. The company is dependent on its intellectual property rights and in certain cases the protection may be inadequate or that MIPS may incur significant costs to protect its intellectual property, which could have an adverse impact on the company's operations, earnings and/or financial position. The company's executive management actively manages both operating and financial risk. Above statement applies for both the parent company as well as the group.

DISTRIBUTION OF REVENUE

The company's revenue primarily comprises sales of kit components (license and components) for helmet manufacturers. Implementation is attributable to the development of customized MIPS BPS solutions for a specific customer and model.

SEKt	2019	2018	2018
Income by nature	Jan-Mar	Jan-Mar	Jan-Dec
Revenue recognized at the time of delivery
Sales of goods	43,632	21,556	184,417
Revenues reported over time
Sales of services	1,309	1,996	8,117
Total	44,941	23,551	192,534

The company's revenue is concentrated to customers in North America and Europe. The substantial concentration of sales in North America is due to the large number of helmet manufacturers in this geographical region. Specification by region is based on customers' domicile and not distribution.

SEKt	2019	2018	2018
Income by region	Jan-Mar	Jan-Mar	Jan-Dec
North America	33,453	16,824	149,625
Europe	7,338	4,049	27,707
Sweden	1,495	868	7,379
Asia and Australia	2,656	1,810	7,822
Total	44,941	23,551	192,534

CURRENCY EXPOSURE

MIPS invoice its customers in two foreign currencies, USD and CNY. The company's license fee, which represents the majority of the company's revenues, is invoiced in USD and fluctuations of this have a significant impact on MIPS net sales and profitability. A 10 percent change in the USD rate would have had an impact on EBIT of approximately +/- SEK 13m on the fullyear figures for 2018. In accordance with the

company's finance policy, the company aims to hedge 50% of the forecasted USD exposure rolling 12 months ahead. The company's sales of components are mostly in China and invoiced in CNY. However, since the company has both revenues and costs related to components in CNY, the exposure to CNY is relatively limited. For further information, see the company's annual report 2018.

DERIVATIVES

The fair value of the derivatives as of 31 March, 2019 amounted to SEK -4.8m (-0.9), of which SEK -3.8m (-1.2) has been reported in Other comprehensive income and SEK -1.0m (0.3) has been recognized in the income statement as other operating income / operating expenses, without taking into account the effects on deferred tax.

SHARE CAPITAL

As of 31 March 2019, the total number of shares amounted to 25,299,870 (25,299,870) and the share capital amounted to SEK 2,529,987 (2,529,987). All shares are ordinary shares and carry equal voting rights. The shares have a quotient value of SEK 0.10.

DIVIDEND PROPOSAL

In preparation for the AGM the Board of Directors are proposing a dividend of SEK 2.50 per share for 2018.

SHARE-BASED INCENTIVE PROGRAMMES

The Group has two outstanding warrant programs. One for senior executives and key people and one for certain board members. The programs include 875,000 issued and paid warrants. The warrants can lead to a dilution of a maximum of 3.5 percent. The exercise price has been determined to SEK 59.80 per share. Each warrant entitles the holder to acquire one share. The warrants may be exercised for subscription of newly issued shares during the period 1 March - 31 May 2020.

DISPUTES

The company is not part of any legal dispute.

RELATED-PARTY TRANSACTIONS

The company has contracted the Board member Greg Shapleigh as a business development consultant. Consultancy fee including expenses amounts to SEK 0.2m for the period. No other ignificant transactions with related parties have been carried out during the period.

ANNUAL GENERAL MEETING

Annual General Meeting 2019 will be held in Stockholm 9 May 2019.

EVENTS AFTER THE END OF THE REPORTING PERIOD

No significant events have occurred since the end of the reporting period.

AUDITORS REPORT

This report has not been subject for a review engagement by company's auditor.

Stockholm 3 May 2019

JOHAN THIEL

President and CEO

QUARTERLY CONSOLIDATED PERFORMANCE MEASURES

SEKt	Q1 19	Q4 18	Q3 18	Q2 18	Q1 18	Q4 17	Q3 17	Q2 17	Q1 17	LTM 18/19
Net sales	44,941	62,234	51,192	55,557		23,551 40,620	27,271	36,605	21,106	213,923
Net sales growth, %	91	53	88	52	12	29	29	55	105	67
Gross profit	32,704	46,611	37,410	40,914	17,253	30,561 20,136		27,579 15,002		157,639
Gross margin, %	72.8	74.9	73.1	73.6	73.3	75.2	73.8	75.3	71.1	73.7
Operating profit	11,812		28,693 20,822	21,651	1,797	14,636	81		11,043 -4,935	82,977
Operating margin, %	26.3	46.1	40.7	39.0	7.6	36.0	0.3	30.2	-23.4	38.8
Adjusted operating profit	11,812		28,693 20,822	21,651	1,797	14,636	81	11,532	1,557	82,977
Adjusted operating margin, %	26.3	46.1	40.7	39.0	7.6	36.0	0.3	31.5	7.4	38.8
Depreciation	1,043	475	413	388	361	337	296	299	213	2,320
Basic earnings per share, SEK	0.38	0.87	0.62	0.68	0.07	0.45	-0.01	0.35	-0.19	2.55
Diluted earnings per share, SEK	0.38	0.85	0.61	0.67	0.07	0.45	-0.01	0.34	-0.19	2.52
Equity ratio, %	85	86	88	87	92	91	90	92	87	86
Cash flow from operating activities	7,651		23,839 30,970	5,885	8,388	893	6,307	5	3,931	68,345
Average number of employees	39	36	36	35	33	32	32	29	23	37

In accordance with IFRS 16 Leases prior comparator has not been adjusted

DEFINITIONS AND DESCRIPTIONS OF PERFORMANCE MEASURES AND ALTERNATIVE PERFORMANCE MEASURES

For definitions and description of performance measure and alternative performance measures, please visit http://www.mipscorp.com/

EXPLANATION OF ALTERNATIVE PERFORMANCE MEASURES

ORGANIC GROWTH

Since MIPS invoices its BPS units and sales of services in USD and CNY at the same time as the accounting currency is SEK, it is essential to create an understanding of how the company develops excluding currency effects when translating sales. This key figure is expressed in percentage points of the previous year's net sales. For net sales growth and the impact of foreign currencies on net sales, see below.

	2019
Organic growth	Jan-Mar
Net sales growth	91%
Net Sales in USDt Net Sales in SEKt at 2019 average USD exchange rate Net Sales in SEKt at 2018 average USD exchange rate Impact currency in absolute	3,637 33,360 29,516 3,844
Net Sales 2018 SEKt	23,551
USD impact on growth	16%
Net Sales in CNYt Net Sales in SEKt at 2019 average CNY exchange rate Net Sales in SEKt at 2018 average CNY exchange rate Impact currency in absolute	8,566 11,645 10,921 724
Net Sales 2018 SEKt	23,551
CNY impact on growth	3%
Organic growth	71%

NET SALES, LAST 12 MONTHS ROLLING

Given the company's historical growth momentum, it is important to continously follow corporate performance in a long-term perspective and not focus solely on specific quarterly results.

Net sales 12 month rolling

SEKt	Q1 19	Q4 18	Q3 18	Q2 18	Q1 18	Q4 17	Q3 17	Q2 17	Q1 17	Q4 16	Q3 16	Q2 16	Total LTM
Net Sales		44,941 62,234	51,192	55,557		23,551 40,620		27,271 36,605	21,106	31,518	21,199	23,628
Rolling 12 month Q1 17' Rolling 12 month Q2 17' Rolling 12 month Q3 17' Rolling 12 month Q4 17' Rolling 12 month Q1 18' Rolling 12 month Q2 18' Rolling 12 month Q3 18' Rolling 12 month Q4 18' Rolling 12 month Q1 19'	44,941	62,234 62,234	51,192 51,192 51,192	55,557 55,557 55,557 55,557	23,551	40,620 23,551 40,620 23,551 40,620 23,551 40,620	27,271 27,271 27,271 27,271	36,605 36,605 36,605 36,605	21,106 21,106 21,106 21,106	31,518 31,518 31,518	21,199 21,199	23,628	97,451 110,428 116,500 125,602 128,047 147,000 170,921 192,534 213,923

ADJUSTED OPERATING PROFIT (ADJUSTED EBIT)

In 2016 and 2017, MIPS had costs for preparations for the listing on Nasdaq, Stockholm. These costs have been deemed to affect comparability. There were no items affecting comparability during 2018 and 2019. To create a good understanding of MIPS 'ongoing operations and how the operating profit had been without these items, the company has chosen to show an adjusted operating profit which excludes the items affecting comparability.

Adjusted Operating profit (Adjusted EBIT)		LTM
	2019		2018 2018-2019	2018		2017-2018 2017-2018 2017-2018		2017		2016-20172016-2017
SEKt	Jan-Mar		Jan-Mar Apr-Mar	Jan-Dec	Okt-Sep	Jul-Jun			Apr-Mar Jan-Dec Okt-Sep Jul-Jun
Operating profit	11,812	1,797	82,977	72,962	58,906	38,165	27,557	20,825	19,961	22,140
Items affecting comparability*	-	-	-	-	-	-	489	6,981	6,910	11,072
Adjusted Operating profit	11,812	1,797	82,977	72,962	58,906		38,165 28,046	27,806	26,871	33,212

* Cost related to preparations to company's listing at Nasdaq Stockholm.

IMPACT IMPLEMENTATION OF IFRS 16

The Group applies IFRS 16 Leases as of 1 January, 2019, as previously described on page 9. The effects of the transition and reported amounts on the first quarter of 2019 are explained below and relate in their entirety to leases for premises.

Jan-Mar 2019 as reported in	Adjustment transition	Jan-Mar 2019 without
interim report	to IFRS 16	adjustments
-12,237	9	-12,245
-7,294	66	-7,360
689	-168	857
-2,792	20	-2,813
9,709	-72	9,781

Group balance sheet	31 Mar 2019 as reported in	Adjustment transition	31 Mar 2019 without
SEKt	interim report	to IFRS 16	adjustments
Right-to-use assets	9,397	9,397	-
Deferred tax asset	1,083	20	1,063
Other current receivables	5,406	-200	5,607
TOTAL ASSETS	333,434	9,217	324,217
Profit/loss for the period	9,709	-72	9,781
Lease liability non-current	7,469	7,469	-
Lease liability current	1,820	1,820	-
TOTAL EQUITY AND LIABILITIES	333,434	9,217	324,217

Group Cash flow	Jan-Mar 2019	Adjustment	Jan-Mar 2019
	as reported in	transition	without
SEKt	interim report	to IFRS 16	adjustments
Cash flow from operating activities	7,651	432	7,219
Cash flow from investing activities	-1,617	-	-1,617
Cash flow from financing activities	-432	-432	-
Net change in cash & cash equivalents	5,602	-	5,602

OTHER

FOR FURTHER INFORMATION, PLEASE CONTACT:

Johan Thiel, President and CEO

Johan.Thiel@Mipsprotection.com phone +46 73 399 65 88

Max Strandwitz, CFO Max.Strandwitz@Mipsprotection.com phone +46 709 61 17 54

This information is such that MIPS AB (publ) is obliged to disclose in accordance with the EU's Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on 3 May 2019 at 7.30 a.m. CET.

MIPS will present the Interim report at a audiocast with teleconference on 3 May 2019 at 10.00 a.m. CET. To participate, please register at: https://financialhearings.com/event/11900

FINANCIAL CALENDAR Annual General Meeting 9 May 2019 Interim report April-June 2019 23 July 2019 Interim report July-September 2019 8 November 2019

ABOUT MIPS

MIPS is a world-leader in helmet-based safety and the protection of the brain. Based on an ingredient brand business model, MIPS Brain Protection System ("BPS") is sold to the global helmet industry. The BPS solution, which is patented in all relevant markets, is based on 20 years of research and development together with the Royal Institute of Technology and the Karolinska Institute, both located in Stockholm, Sweden.

MIPS headquarter with 29 employees engaged in research and development, sales and administration is in Stockholm, where its product and technology test facility is also located. Production and manufacturing operations take place at sub-contractor facilities. During 2018 MIPS net sales amounted to SEK 192.5m and the operating margin to 37.9 percent. MIPS is traded on the Nasdaq Stockholm stock exchange. For more information, visit www.mipscorp.com.

FINANCIAL TARGETS

MIPS' long-term financial targets should not be viewed as a forecast but rather as an objective which the Board of Directors and senior executives believe is a reasonable long-term objective for the company.

Growth: The goal is to grow organically to achieve net sales in excess of SEK 400m by 2020. Profitability: The goal is to achieve an EBIT-margin in excess of 40 percent by 2020