Haypp Group (HAYPP) Q3 2024 earnings summary

Executive summary

• Nicotine pouch volumes rose 42% year-over-year, now representing 63% of total volumes and surpassing 50% in all markets for the first time, reflecting robust demand for less harmful nicotine products.

• Q3 2024 net sales grew 23% to SEK 944.2m, with 25% growth in constant currency, marking the highest rate in two years and driven by all divisions.

• Growth and core markets contributed significantly to group sales, with emerging segments and vaping also becoming meaningful contributors.

• Regulatory challenges in Sweden and California emerged, but are expected to have limited impact on the overall outlook.

• Profit for Q3 reached SEK 16.9m, with EPS before dilution at SEK 0.57.

Financial highlights

• Net sales increased 23% to SEK 944.2m in Q3; constant currency growth was 25%.

• Adjusted EBIT grew 81% to SEK 33.1m, with margin improving to 3.5% from 2.4% last year.

• Gross margin improved by 1.7 percentage points to 14.3% (12.6%).

• Adjusted EBITDA rose to SEK 50.8m (SEK 32.9m), margin 5.4% (4.3%).

• Cash flow from operating activities increased to SEK 159.1m (127.9).

Outlook and guidance

• Longer-term financial targets will be provided in spring 2025.

• Margin expansion is expected to continue as scale benefits materialize, though specific 2025 guidance is premature.

• Ongoing investments in compliance and infrastructure are expected to support future growth and competitive advantage.

• Regulatory issues in Sweden and California are expected to have limited impact; business fundamentals and growth outlook remain robust.