MIPS: Safer Journeys Start with MIPS

MIPS uses an ingredient brand business model, partnering with helmet manufacturers to integrate its safety technology directly into their products, rather than manufacturing helmets themselves. This approach boosts brand recognition, ensures revenue diversification, and expands its addressable market. By leveraging the global marketing resources of its partner brands, MIPS can effectively reach a wide customer base with minimal costs, gaining high exposure to end users.

As the market leader in helmet-based safety, MIPS is uniquely positioned to capitalise on growing demand for advanced protective helmets. To maintain this competitive edge, MIPS is committed to reinvesting 5% of net sales annually in research and development, ensuring continuous innovation and the enhancement of its technology. Competition from other ingredient brands that market a solution for protection against the rotational motion is currently limited to a few players who have a few customers as a base. MIPS's signature yellow inner lining has become an iconic feature, establishing a distinctive and instantly recognisable brand identity that is difficult for competitors to replicate.

After facing challenges in the consumer market over the past few years, MIPS is now at a critical inflection point. In the first nine months of 2024, the company demonstrated impressive financial and operational growth across all its key segments: Sports, Motorcycle, and Safety helmets. Organic growth surged by 29%, with the Safety helmet category experiencing an extraordinary 92% increase in demand, driven by increasing demand for helmets equipped with Mips technology. Despite its leadership position, MIPS has penetrated only a fraction of the total addressable market, signalling substantial opportunities for continued organic growth in the years ahead.

Rise of e-commerce

The proliferation of e-commerce in rapidly growing economies such as India and China are driving a steady shift to online retail platforms as the preferred purchasing channel. Increasing demand for bicycle commuting and delivery services is a key trend influencing the MIPS market growth.

No helmet, no insurance?

As major cities become increasingly bike-friendly, the number of cyclists—and consequently, cycling-related accidents—is on the rise. In response, some insurance companies are beginning to require helmet use in traffic collision cases involving cyclists. This shift highlights the potential for insurers to play a pivotal role in driving helmet adoption, with the possibility of policies stipulating "no helmet, no insurance" becoming the standard.

Shift Towards Active Transport

Major cities, especially in countries like the Netherlands, Denmark, and Germany, are seeing a significant increase in cycling as a mode of transport. The focus on sustainable urban mobility has led to the development of extensive cycling infrastructure, making cycling safer and more accessible.

In the UK the government aims to have half of all journeys in towns and cities completed by walking or cycling by 2030. This urban cycling boom is fueling a growing demand for helmets.

Growth Drivers

Despite challenges in the consumer market, the company remains optimistic about its short-term growth prospects, supported by increased orders from helmet brands, new customer acquisitions, and an expanding range of helmet models at existing clients.

MIPS’s growth is mainly driven by the Sports category, which is its largest category in terms of sales. MIPS has seen significant growth in the sports segment, particularly in cycling and snow sports. In Q3 2024, the company reported a 61% increase in net sales within this category, indicating strong market demand.

Market Recovery

Normalizing inventory levels at retailers and manufacturers post-pandemic is bolstering demand.

In 2024, the majority of growth in the bike sub-category was driven by increased demand from manufacturers purchasing Mips technology for new helmet production. This marks a shift from the recent trend, where growth was largely fuelled by customers selling existing inventory to retail consumers, underscoring a healthier, more sustainable growth trajectory for the coming years.

Regulatory trends

Governments globally are promoting cycling, e-scooters, and other forms of active transport as part of their sustainable urban mobility strategies. For instance, the EU Urban Mobility Framework, adopted in 2021, encourages member states to develop urban transport systems that are safe, inclusive, and emission-free.

Investments in cycling infrastructure, such as dedicated bike lanes, often coincide with safety campaigns emphasizing helmet use, further driving adoption. As the market leader MIPS is well-positioned to capture increased demand driven by these mandates. Helmets equipped with MIPS technology could become a requirement for compliance in many markets.

Influencer Network Effects

Mips leverages its strong brand recognition and market presence to partner with world-class athletes who use helmets featuring Mips technology. These partnerships serve as a highly effective influencer marketing strategy, advertising MIPS to the thousands or even millions of followers of Team MIPS athletes, a significant driver of demand over the longer term.

MIPS' products must meet various global safety standards, and changes in helmet regulations or safety certification requirements could delay product approval or require costly adjustments. Such changes might limit MIPS' ability to expand or force it to redesign products, potentially harming its financial performance.

While MIPS is a market leader, it faces competition from other brands in the ingredient brand market. If competitors introduce innovative technologies or gain stronger footholds with key manufacturers, MIPS may lose market share. Continued investment in research and development is essential for maintaining its competitive edge and market dominance.

MIPS' business model relies heavily on partnerships with helmet manufacturers. If these partners face financial difficulties, change their business strategies, or switch to competing technologies, MIPS could see reduced demand for its products. Additionally, any changes in the pricing or terms of these partnerships could negatively impact MIPS' profitability.