Good morning and welcome to the Mips Conference Call. All participants will be in a listen- only mode. Should you need assistance, please sign on conference specialist by pressing Star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Max Strandwitz. Please go ahead. Good morning, and thank you, operator. My name is Max Strandwitz, I am the CEO of Mips. With me today, I also have our CFO, Karin Rosenthal, and we will present the year-end report. If we start with the key highlights, and I'm now on the second page of the quarter. As we communicated before, we expected a soft Q4, and indeed we did see a soft quarter. Net sales in the Q4 was down with 46%. If we adjust for currency effect, organic growth was down with 53%. If we look at the year-to-date performance, our sales decreased with 7%. Of course, as we also explained before, Q4 is a very bike-heavy quarter. Entire year comparative, we had almost 80% sales of bikes in the quarter. Of course, with the soft bike market that we have seen in the last quarter that had a ripple effect on the results, and that's why we saw the soft performance in the quarter. If we look at the other type of helmets that we also do, we saw a little bit of a different performance. We continued to see very strong performance in snow, moto, and in safety, and really happy with the development there. We do expect the soft demand in bike to start normalizing during the spring, as we communicated before. We remain positive on the longer-term outlook in bike, with very strong trends driving the longer-term demand. Since we see this as a temporary dip, we and the board are proposing an increased dividend to SEK 5.50 per share, which equates for 82% of net earnings. Of course, we continue to invest behind our strategic priorities to make sure that we can deliver on our long-term plan. We didn't experience any major disruption in supply chain during the quarter, despite that we actually saw a significant COVID outbreak at the end of the year in China, but no major impact from that. We remain confident in delivering on our long-term strategy and also our financial targets. If we turn page and then go to the third page. In sports, we did see a mixed development with a very challenging bike market, but a strong snow market. We saw a decrease in sales of 50% in the quarter. Year to date, sales is down with 10%. Bike, as I explained before, is the main contributor with a decrease of sales of 59% in the quarter. Snow continued with a very strong performance in Q4. If we look at the year to date performance of snow, we actually managed to grow 85% in the full year of 2022. If we look at retail inventory of bike helmets, it's still somewhat unbalanced, but we do expect it to normalize during the spring. Like we said before, the long-term positive outlook for bike remains. Despite the challenging market, we have actually performed a record number of customer implementation projects in 2022, and we did almost manage to achieve one new helmet project finalized per working day, which is of course a fantastic number. If we turn to next page and we look at Moto. In Moto, we do see good progress, and we also launched our first helmet in MotoGP. We did experience growth of 33% in the quarter. Year to date growth is 35%. We continue to see good development both in on and off-road helmets. We are also very happy that we have the first helmet in MotoGP launched, so Moto Grand Prix. With Kabuto during the quarter, they have a rider which they have signed, which his name is Aleix Espargaró. He's one of the top three ranked in the world, and he will be riding with the helmet and of course, with the Mips technology during the season. Really happy about that. We continue to see good development both with existing brands, but also a significant number of new brands and models being launched. Like I said before, we do also expect that the outlook for the category to remain strong with good demand from both customers and consumers. If we look in safety, we have established a really strong customer base. We have said before that volume is going to increase going forward, and we actually saw a good development already in Q4. We have now launched partnership with 11 brands in total. We have the organization in place to make sure that we can also drive awareness and sell-through in the category. We did also announce our partnership with, for Mips, the second global brand, Delta Plus, in the beginning of February 2023, which we are of course very happy with because it's always easier to drive sell-through with brands that have global reach. With the new and the old brands, we have a strong platform to generate volumes. 2023 is all about sell-through and to deliver volumes exactly like we communicated before. As I said in supply chain, we didn't see any major impact from disruptions despite that we actually saw a significant COVID outbreak at the end of the year in China. We have seen that supply chain is starting to normalize, but we still expect it to be somewhat unpredictable. We have seen that lead times is reducing drastically and also time from factory to market has reduced dramatically in the last month. Of course, supply chain is expected to remain unpredictable. If we then turn to next page, when it comes to new product launches, we have ramped up our investments in product development during the last year, and we did actually launch three new technologies during the year. Air Node was launched in conjunction with Tour de France with Specialized. This is our lightest solution so far. Included the padding, the weight is somewhere around 19-20 grams, depending if you have a medium or a large version. Really, really low impact on the total weight of the helmet. If you look at the Mips specific solution, it's actually only 7 grams. A great integration of Mips also into a really high performance model in road cycling and really happy about that solution. What is also great for that solution is that it will actually also be sold as an aftermarket product. If you buy a Specialized helmet, you wear your helmet for some time. After some months, you can of course wash it if you want. When it's worn enough, then of course you can also replace it with a new one. I think that's really a great way for Mips also to becoming more consumer-centric. We also launched our solution, Integra Split, which is a fully integrated Mips solution that can be offered with dual density capability. Probably not the word that everyone use every day, but it basically means that you can manage low impact and high impact when it comes to linear impacts and so on. Really a versatile helmet and a great introduction also of a new Mips technology that was launched with the off-road brand, Fox, in August. As you saw already in the Kabuto helmet, we launched our Integra TX at the motorcycle fair at EICMA, the world's largest motorcycle fair in the world in November. There we also have integrated the Mips solution fully into the padding and can actually be implemented in most type of helmets with a very limited impact. All the solutions that we have done is of course, strategically important and great additions to Mips technology patents. We do get also questions, what is the runways of this new technology? You have a runway on all the new products from 2036 until 2040. Of course we can use those products for a long time. If we then go into next page, and I'm now on page number eight. During the year, we also launched a new graphic design. Of course, we are an ingredient brand, but we also want to make sure that we elevate the brand that and the product that we are integrated in. We have therefore reworked our whole product portfolio with a completely new graphic design, which looks fantastic and it's a real step up in design. We will roll out this during the year and actually already started last year to all our customers in 2023. Something really to look forward and really proud about our new design. If you turn to next page. In sustainability, which is a very important area for us, we also made a lot of progress. 2022 was really a year for us where we wanted to create a strong platform for our future work. In order to create a strong platform, you need to have a foundation. Our foundation was built around three different areas. First of all, in order to make sure that we make the progress we should make, we signed up to Science Based Targets where we will be audited against the progress we make. We also signed up to the UN Global Compact 10 principles. Which is of course something we're also proud to adhere to. Then we also started to offer more circular product offerings. We have introduced recycled materials and sold our first products already in 2022. This is of course something that we want to roll out in most of our products and offer to most of our customers. All of these are of course great results and very important for our long-term journey in sustainability. If you then turn to next page, and we look at the development in the different categories we're in. Sports like I explained, soft performance, we did see a decline of around 50% in the quarter. Moto, good performance with 33% in the quarter. You have to know that it was against a little bit of a soft comparator last year, but still really happy with the long-term performance and also the performance in the quarter. In safety we start to get some traction, and we have also communicated that numbers will go up through the year, and we are quite happy with the performance there. I will hand over to our CFO, Karin Rosenthal, who will talk about the financial development in the quarter and the full year. Good morning, I'm Karin Rosenthal, CFO of Mips. I will take you through the financial part of the presentation. We saw a soft development in the Q4 with a decrease in net sales of 46%. Adjusting for FX due to a strong US dollar versus SEK, sales decreased with 53% organically, fully explained by the weak bike end market. Gross profit was down 47% and a gross margin of 72.3%, down 70 BPS versus last year due to volume effects from decrease in net sales and the product mix. In OpEx, we continue to invest in our strategic priorities. We saw a negative impact of SEK 11 million from FX, mainly driven by hedges under the operating costs in the quarter. EBIT was down 77% to SEK 24 million compared to SEK 104 million last year, an EBIT margin of 22% versus 52.6% last year due to decrease in net sales, continued investments in our strategic priorities, marketing and R&D, and higher operating costs related to exchange rate effects. We saw a strong operating cash flow of SEK 47 million in the quarter. We look at the financial KPIs, organic growth of -53%, an EBIT margin of 22% and SEK 47 million in operating cash flow. We turn to next page and look at the development for the full year. Net sales during the year decreased with 7%. Adjusting for FX due to a strong US dollar versus SEK, sales decreased with 19% organically. Gross profit was down 9%, a gross margin of 72.1% versus 73.2% last year. In OpEx, we continue to invest in our strategic priorities, R&D and marketing. EBIT was down 30% to SEK 229 million compared to SEK 326 million last year, an EBIT margin of 40.7% versus 53.6% last year. Operating cash flow of SEK 236 million compared to SEK 277 million last year. If we look at our financial KPIs, organic growth of -19%, an EBIT margin of 41% and operating cash flow of SEK 236 million. We then turn to next page, we are now on page 13, balance sheet and cash flow. We have a strong cash position with cash and cash equivalents of SEK 532 million. Important to point out that we don't have any loans. Cash flow in the quarter amounted to SEK 47 million. We have a strong balance sheet and due to our positive outlook, the board proposes a dividend payout of SEK 5.50 per share versus SEK 5 per share last year, corresponding to 82% of net earnings. Over to you, Max. Thank you, Karin. If we summarize the quarter. Q4 actually concludes a challenging but in many ways also a very successful year, where we saw good development in all the categories except within bike helmets of course. We tend to focus a lot on the bike performance given the weight of our portfolio. Of course we are extremely happy what we have done both in Moto, where we really start to see some traction and also happy to see that now also in our investment in safety is starting to pay off. When it comes to the soft bike market. We expected it to remain soft into spring. As we communicated before, we said that somewhere around end Q1, beginning of Q2, we expect the market to start normalizing again. That has not changed. It's also important to realize that as we go in Q1 and Q2, also the mix changes. The weight in bicycle helmets of our total sales, of course, decreases. In Q1, we saw a mix in the year before of somewhere around 50% sales of bicycle helmets. Actually, when we go into Q2, we actually see that the main production that we have is in snow helmets. There, of course, the importance of bike is even less. We have a good outlook in safety and most of our 2023 really happy with the development. We have actually during the whole process also when you look at our investments in marketing, product development, making sure that we are as consumer relevant as we want to be continued all our strategic priorities to deliver on the long-term strategic plan. We are confident to deliver on our long-term financial targets. We then open up for questions. Operator, over to you. Thank you. We will now begin the question and answer session. To ask a question, you may press Star then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw, please press Star two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Adela Dashian with Jefferies. Please go ahead. Yes, good morning, Max and Karin. A couple of questions from me. The first one relates to your visibility within bike as we enter into 2023. There's obviously several competing theories out there about what will happen. What are the driving forces behind your confidence in a recovery already this spring? I think, when we talk about recovery, we also say that the bike market will start to normalize during end Q1, beginning of Q2. We have also said that when we go into Q3 and Q4, we actually expect to start growing in bike again. Why do we do that? When we start selling to bike helmets in Q3 and Q4, we are actually doing that for the 2024 season. By then, we really expect that the bike market will be in balance again, and that we can start to deliver growth in Q3 and Q4 this year against a very soft comparator. I'm assuming then that you're already having good discussions with your customers about the 2024 bike season. Yes. It sounds promising at least, a lot of brands is expecting that then we will get back to a much more normal market. I think, I mean, when we look at the underlying trends in bike, they have actually not changed that much. There is still a lot of people that buy e-bikes. There is still good growth in e-bikes. Normally, when you buy an e-bike, you get a new helmet, you travel with higher velocity. As I explained before, you also see that people want to commute, even people in the U.S. have started to commute and so on. High gas prices, of course, drives that behavior, and also everyone wants to do good for the environment, and also quite healthy to communicate or commute to work. If you look at the outdoor trend, even though it's not as strong as it has been during the peak pandemic, situation, of course, we still see good, trends there. A lot of those drivers, when you add those together, you can actually expect also that in 2024, the bike market will return back to growth again. Got it. Great. Then also on your outlook for safety, I believe you previously said that you expect sales in the range of SEK 20 million-SEK 30 million in 2023. Does this figure also include the recently announced partnership with Delta Plus? Yeah. Of course, we never talk about brands that we have not launched, but now we have launched Delta Plus, and we will actually start delivering to them also probably in the end of Q1, maybe beginning of Q2. Yes, they will have an impact also on that number. Okay. Finally on your cost base, and especially as it relates to R&D expenses, do you still budget for this to be somewhere around 5% of sales going forward? I noticed that it ramped up a bit as a% of sales during 2022 compared to 2021. What should we expect- I mean, we have done a lot of activities. When you look at 2022, we ended at 4.7%, which is of course a little bit shy of the 5% that we want to go for. I think that 5% is quite a good number to aim for. We have done a lot of activities during the year with our new graphic design, 3 new product launches and so on. I really hope that we can keep that momentum, and 5% is what will deliver that in terms of investments. I think that's a reasonable amount and the right amount for Mips at the moment. Got it. Great. Thank you very much. Thank you, Adela. Our next question comes from Daniel Thorsson with ABG. Please go ahead. Yes, thank you very much. First one on bike inventory levels. Do you see similar development in Europe and the US, or have you started to see any kind of normalization in any of the two markets, or which one do you expect to improve first? Yeah, I think, I mean, like I also said last call, there is a little bit different dynamics and the bullwhip effect in the U.S. was a lot bigger. There, of course, you saw that the retailers carried a lot more inventory, so of course a lot more inventory to work through. At the same time, you had a much stronger consumer, and actually if you start looking into the more premium, higher price segments and so on, they are actually start to get quite low in inventory. There it's more to work through all the low cost and low priced inventory on the market and that is starting to happening and so on. When it comes to Europe, it's much more about the consumer confidence. Of course, impacted very much from the war in Ukraine and so on. There is actually different types of drivers. You had some inventory that is starting to be reduced also in Europe. They start from different points, but of course, in the end, the results will be the same, and we expect also Europe to become a bit more normal than we have seen during 2022. Perfect. That's helpful. Secondly, if we think about the safety development here in 2023, are there any quarters that potentially can see larger or smaller volumes due to not only production seasonality, but also planned production with your customers and brands or launches that could be good for us to be aware of? Or should we see a steady improvement here quarter-over-quarter throughout 2023 on volumes and sales? Yeah. Of course, since we are on the growth journey, I think the best way is to assume growth quarter-over-quarter going forward because that's what we expect. Excellent. Related to that, do you see any competition in safety or any pushback from helmet brands that do not see the reason to have Mips in helmets? No. I mean, we have seen, of course, in any category, any category we have launched in, we have always seen people saying that Mips is not needed. Of course, that started our own discussion in safety, where we really had to do our homework and really our scientific validation in Mips when it comes to construction, accidents and so on. We are really happy to have that work in the back pocket when we initiate the discussion. The whole scientific publication around accidents, statistics in construction sites is of course important to have when you explain the relevance of Mips and so on. We haven't seen a lot when it comes to competition yet, but I do expect. I would think it will be very, very strange if we are the only one talking about rotational motion in the construction industry. Not a lot yet, but we expect more to come. I would be surprised if we would be all alone. Seems fair. Final question, a more technical one. The SEK 11 million FX effect here or currency effect on EBIT in the quarter, where are we ahead? What should we expect for Q1, like directional-wise, given the spot rates we have? Should it be a negative effect here as well, but not the same magnitude? Or how should we think about it? Yes, it will be an effect also in Q1, but we don't expect it to be as much as in Q4. Perfect. Thank you very much. Thank you, Daniel. Our next question comes from Karl-Oskar Vikström with Berenberg. Please go ahead. Hi. Thank you for taking my question. I actually had a follow-up on the announced partnership with Delta Plus. I think you said in the press release that roughly 4 million helmets produced per year there for them. Just in terms of the launches you're planning and sort of what's in the pipeline, how much of sort of the total volumes do you expect you can sort of penetrate with the Mips solutions through that partnership in sort of a long-term view? It'd be quite interesting to hear about. Maybe as well, sort of to build on Daniel's questions. You're basically saying a gradual increase quarter- on- quarter and quite stable. There won't be any sort of big launches, sort of let's say Q3 or anything like that. That would be sort of break the trend, let's say. Just to clarify that. Yeah. I mean, I mean, what we plan for is always growth quarter-over-quarter, because normally when you do launches as you do in safety, it's not like we have seen in other types of effects where you have a big pipeline fill, you need to fill up with the retailers. It's much more a gradual growth that you're expected to see, and that's also why we expect growth quarter-over-quarter. When it comes to Delta Plus, of course, we are very happy that we got them on board. Always, when we talk to a brand partner, we always expect to become a bigger part of their assortment. Because what we have seen over time is that when Mips doesn't become a material part, they will also not do a good job with Mips. For us it's important with our market position, but also that we have a relevant partner on the other side. Yes, longer- term, we expect to have something more material coming out of this. As you also see in the press release, we start with the most premium helmets, which is the Granit helmet that they have. Of course, we will look at the rest of the assortment like we do with all of the customers. That's the first one out, and that's the real priority to put on the market. Sure. Then in terms of sort of ramping this up now and growing volumes within this category, how does the actual manufacturing process sort of differ? Is it also produced in China? Are there any kind of capacity constraints or etcetera, to be aware of within safety? Or will it be sort of as scalable and flexible as it has been in sports? We don't expect any real difference. I think the biggest difference that you will see over time is that a lot of the construction helmet is actually produced outside China. You see a much more broad network of production. The biggest manufacturers normally have up to three, four different sites that they produce around the world. Of course, we will follow that logic. We will ship to whatever site is required and sometimes even produced in the vicinity of that site. We will see a change of our supply chain and also with a lot less production in China that we have seen in other types of category. When it comes to a production of the construction helmets, normally you only have the big ones, maybe four or five different types of helmets. You can also optimize in a very different way. Actually, the cost of labor doesn't become a constraint, and then you can produce in a lot more places. Of course, we are ready for that. We have that in our plan, and we will not see an impact in terms of margins or other things. We will use our scalable business model. It has served us well so far, and it will continue to serve us well also going forward. Perfect. Thanks. Yeah, I guess, I mean, bike is quite clear, sort of what you're expecting there. Maybe on the Moto side of things, you know, you're mentioning, during the CNDs, you're going into scooters and expanding into new geographies, etc. Could you just comment a bit on what's going on there and sort of where you stand on that plan at present? Yeah. I mean, for us, we don't want to talk too much about things that are too far, far out, especially when you are a growth company, people expect you to grow immediately. When we talk about things, they are normally within reach. We are already doing work on the e-scooter and the emerging markets and so on, and we have that as our higher priority. Since we have put it into the plan, you can also expect that something will happen in that areas and so on. We will talk about that in due time. Yeah. No, that's clear. I guess the same then for bike with the sort of, you know, children, bike helmet or sort of slightly lower price range as well. I guess it's the same. Yeah. answer on that. Yeah. And in bike helmet, I mean, for us, I don't think we have done a good enough job when it comes to kids helmets because of course, they are extremely important to us and everyone else and we could have done a better job. Of course, there we have done a lot of work when it comes to really making sure that we have the scientific validation also there in our back pocket, and that work has been done. We will accelerate a lot of the work that we do with kids helmet, because if you look at the penetration rate in kids helmet versus other types of helmets, we are only at 10% of the addressable market, and there is no reason why we should stay at that number. More kids that we need to make sure that they have a relevant Mips solution also in their helmet. That is happening and you will see some launches already during this year. Great. I'm gonna open up for someone else, but just one final one. It just crossed my mind. How much of the total bike helmet volumes is represented by the kids category in terms of the global market? Do you have an idea? Yeah. I would say in total, it's somewhere around 10% of our addressable market. Then, of course, you will probably say that that's a little bit low. It is low because if you look at a lot of the kids helmets that is being sold around the world is in the mass market, and they are sold at somewhere around $10-$15. Of course, that's not the market that we address. 10% of the helmets that we address, but if you look at the total market, I would probably assume it's more up to 20%-25% of the market. All right, cool. Thanks. Thank you very much. Thank you. Our next question comes from Emanuel Jansson with Danske Bank. Please go ahead. Hi, Max and Karin, thank you for taking my question. I believe at this stage, most of my questions have already been answered. Can you give us some flavor on the bike category and what kind of type of retailers that maybe have seen a better situation, maybe at the current trading and also throughout the most recent quarters here? If it's mainly the bigger retailers with maybe better cash flow situation, or as you have also seen in the US, we have a lot of independent bike dealers. Have you seen any, like, improvements in that kind of different kind of a retailer? Yeah. Actually, that's a very good question. There is somewhat a difference. If you look at the really big bike dealers that has a lot of more control of their supply chain, they were the first one to react, so they actually slowed down quicker than anyone, and they will also start up a lot quicker than anyone. The bigger one that have their own supply chain much more under control, they were much quicker to react, and they are also, of course, quicker out of the starting pits, like I said. When it comes to the independent bike dealers, especially in the US, it depends a little bit. The ones that have been really close to the market, the true independent one, I would say that they are quite good at managing the inventory. They know what they need, they know their market and so on. We already start to see some recovery there. You have also a lot of branded retailers with, Trek and Specialized and so on. Since they have a lot more of the supply chain, probably it will take a little bit longer for them before they are out of the starting pits. Okay. Perfect. Can you give us any sense of how, on how big, as% of group sales or bike sales that comes from independent bike dealers? In the U.S., you mean? Yeah, in as a total if that's possible. Yeah. You normally talk about the independent bike dealers in the US in our addressable market to be somewhere around 30%-40%. Okay. Perfect. Good. Just a quick question on snow category and also most are now entering Q1 and Q2. It feels like on how you're stating the words as well that we will see a gradual improvement here in terms of organic growth since we also will face less exposure from the bike segment in Q1, Q2. Can you give us some flavor on the inventory levels in Moto and in the snow category? Yeah. There's two mixed situations. Of course, when it comes to gradual improvement of organic growth, I hope that you don't mean snow, because of course 85% is a fantastic number to have in a year. Of course, we have seen a really strong start of the season in snow. The snow category, we know that the US market have had a lot of snow. Of course, we also start to see a lot of snow also in Europe after a slow start. At least I think we are off to a good season. Of course, when we started the season, there were very low inventory when it comes to snow helmets on the market. Given what we have heard so far, it indicates that it will be a very strong season and that we will start with a normalized season for next year. I wouldn't say that we will have a lot of carryover inventory as it seems now. When it comes to motorcycle, there is a little bit of a different picture because, of course, a lot of the brands have been extremely busy with certifying the helmets for the new standard ECE 22.06. There is also a lot of the old motorcycle helmets that you are still allowed to sell but not allowed to produce, which is under the ECE 22.05 standard. They have been sold out on the market. They are mainly impacted on the street motorcycle helmets and so on. We actually don't see a huge impact for that because our proportion of the total sales there is still quite low, and for us it's much more a penetration game. We also now see that a lot of the new ECE 22.06 helmets, which is the new standard, is being rolled out. When you roll out a new helmet, it's often with the Mips technology. Of course, we see the ramp-up effect from that. Okay. Cool. Yeah. Is that mainly from existing customers within Moto, or is it new customers that you are getting from, due to the new standard? It's both. Both. Yeah. Okay. Lastly from my side, just thinking about safety, and you signed the uvex last year, and now you also signed Delta Plus. Do you feel like that is creating a buzz in the construction market, and is it easier for you to get in contact with other helmet manufacturers and so on? Yeah. I mean, when you talk about an ingredient brand journey, you always talk about being relevant in a type of helmet. Of course, with these two bigger players, you become much more relevant and a lot quicker than we actually expected. Of course, it's always good to have a couple of ambassadors that vouch for the technology. Of course, if you go into a tender process with a construction company and you bring something new on the table, of course it always helps. Yes, we see that, especially in the U.S. market, we really start to become a little bit of the buzz that we really wanted to be. Yes, you're right in that sense. Perfect. Thank you very much, Max. That's very helpful. That's all of my questions. Thank you. Our next question comes from Carl Deijenberg with Carnegie. Please go ahead. Thank you. Hi, Karin and Max. Two final questions from my side. I guess most of the topics have all been covered, but I want to ask about the cost planning here going into 2023. More primarily on OpEx, Jess it's been up roughly SEK 30 million in absolute numbers, both in 2022 and 2021. Before the pandemic, you were roughly SEK 15 million up. I'm just wondering if you could give any sort of post guidance here going into 2023, not accounting for any volume changes, just sort of what you're planning for and what we can expect going into the new year. Yeah, I mean, first of all, since we are expecting some growth, we have a couple of metrics that we steer our businesses around. One is, of course, marketing at 7% of net sales. We believe that's the right number. We were a little bit higher this year because, of course, we didn't expect the dramatic slowdown that we saw in the second half and so on. We expect to go back to around 7% there. When it comes to R&D, then we believe that 5% is the number that we really would like to see. In terms of the other areas, since we have a quite a scalable business model, they will not increase to the same extent. What we do, however, is of course, since we see this more as a temporary thing and of course, making sure that we are calibrated against our long-term target, we still invest in the business. We haven't stopped hiring. We have continued to hire throughout the whole both Q3 and Q4 because of course for us is the right thing to do. You will see a cost increase also in 2023. Okay, very well. My final question was on the gross margin development here in Q4. It improved quite significantly sequentially compared to Q3, while the volume development is from an organic perspective, fairly similar. I'm just wondering if you could elaborate a bit on the drivers there and what explains the incremental difference between 69% in Q3 and 72% in Q4. Yeah. If you look at historic numbers, we have said before also that we are targeting a gross margin above 70%, which we tend to deliver. I would probably say that 69 is probably not the normal number there. We had a couple of things that of course like you said, unfavorable volume, unfavorable sales mix. We also had quite a lot of tooling costs relating to new product development and so on, which were putting a little bit of a burden on gross margin. It's probably more Q3 than Q4 that was not normal. Okay, very well. That was all from me. Thank you. Thank you, Carl. Again, if you have a question, please press Star then one. Our next question comes from Alexander Siljeström with Pareto Securities. Please go ahead. Hi, Max and Karin. I just have two short follow-ups. Firstly, you mentioned that you expect growth in sports in the second half of 2023. I was just thinking about are you sort of aiming for 2020 levels or 2021 levels in terms of volume or somewhere in between? If you could give some color on that in terms of your expectations. Of course, we are not that granular in our guidance even though we have been guiding more than we normally do. We do expect to get back to growth numbers both for the second half of the year and also full year, given that we expect that the first six months will be a little bit down then of course, the second half will be a little bit up. That's what I can give you. I wouldn't start estimating that we will go back to 2020 numbers. We will see more modest growth rate for 2023 than that. Okay. If you take a longer picture of course, then you will see that we in order to hit our long-term financial targets, we need to grow with almost 30%. Over time, of course, that's what we need to go back to. Just on the collaboration here with Delta Plus and the Granit model. Just wanted to follow up with a question here. Could you say how large of a volume that is compared to the SEK 4 million in total for the brand? Yeah, I mean, given that it's their most premium solution, they will probably sell a couple of hundred thousand of a solution like that. Of course, Delta Plus is still on a growth journey and so on, and implementing Mips is probably supporting that growth journey. That's what I expect without knowing exactly where they will be today. Okay, perfect. Thanks a lot. This concludes our question and answer session. I would like to turn the conference back over to Max Strandwitz for any closing remarks. Yes. Thank you everyone for listening in to our year-end result presentation and speak to you again after the Q1 result. Take care everyone.