Haypp Group (HAYPP) investor relations material

Executive summary

• Nicotine pouch volumes grew 23% year-over-year on a like-for-like basis, with strong double-digit growth outside the US and adjustments for Zyn shortages and Easter timing.

• Achieved record gross margin expansion, supported by operational efficiencies and strategic investments in the US and UK.

• Revenue increased 20% year-over-year on a like-for-like basis, with reported net sales impacted by currency effects and US market disruptions.

• Investments in US market expansion, technology, compliance, and consumer experience are expected to impact margins in the near term but support long-term growth.

• Regulatory and legal environments remain dynamic, with ongoing litigation and new EU and UK regulations impacting product categories.

Financial highlights

• Q2 gross margin reached a record 19%–19.2%, up from 14%–14.3% last year, driven by product mix and operational efficiencies.

• Adjusted EBIT margin increased to 4.2% in Q2, with adjusted EBIT up 11% to SEK 38.3mn.

• Core markets net sales up 4%–6% in Q2, with EBITDA margin improving to 10.2%.

• Growth markets reported net sales down 26% due to US Zyn shortage, but LFL net sales up 49%; EBITDA margin improved to 1.5%.

• Cash flow from operating activities for H1: SEK 137.1mn, down from SEK 189.1mn year-over-year.

Outlook and guidance

• Long-term prospects for risk-reduced nicotine products and online channels remain strong, with compliance expected to be a competitive advantage.

• Strategic investments in the US and technology will impact margins in H2 2025, but are expected to drive long-term growth.

• 2028 targets: 18–25% CAGR revenue growth, adjusted EBIT margin of 5.5% ±150bps, and reinvestment of cash flows; no dividend planned.