In This Article:
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Nicotine Pouch Volume Growth: Reported growth of 10%, like-for-like growth of 35%.
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Gross Margin: Increased by nearly 4 percentage points to 18%.
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Adjusted EBIT: Reached 5.2% on a group level.
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Core Markets Sales Growth: 10% growth driven by nicotine pouches.
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Growth Markets Sales Growth: Like-for-like growth of 65%.
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Emerging Segment Sales Growth: Almost 300% increase compared to Q1 2024.
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Net Debt to Adjusted EBITDA Ratio: Decreased to 0.4, the lowest in the group's history.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Haypp Group AB (FRA:8QG0) reported a 35% year-on-year growth in nicotine patch volume on a like-for-like basis, indicating strong demand.
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The company achieved a significant increase in gross margin by nearly 4 percentage points to 18%, showcasing the strength of its operating model.
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The US market is experiencing robust growth, with a 40% annual increase, and Haypp Group AB (FRA:8QG0) is well-positioned to capitalize on this trend.
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The infrastructure transformation, including the rollout of European middleware, is on track, enhancing agility and control in a dynamic market environment.
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Haypp Group AB (FRA:8QG0) delivered record-high adjusted EBIT in Q1 2025, reflecting strong financial performance and strategic investments.
Negative Points
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The company faces ongoing legal and regulatory challenges, including cases in San Francisco and potential restrictions in Norway and Spain.
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There is a significant drop in the number of active customers in growth markets, attributed to the lack of Zyn supply and other factors.
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Haypp Group AB (FRA:8QG0) anticipates lower profits in H2 2025 due to planned investments in the US market, impacting short-term earnings.
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The emerging segment is experiencing steep losses, and profitability is contingent on achieving scale and volume.
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The company is not planning to issue dividends over the medium term, opting instead to reinvest surplus cash flows into expansion.
Q & A Highlights
Q: You delivered a solid margin expansion in Q1. Are these gross margin improvements sustainable, or should we expect a negative mix effect once supply returns? A: (Gavin O'Dowd, CEO) We benefited from year-end stock builds, which is a small component of the gross margin. We plan to return part of the savings to consumers later in the year. The US market conditions have changed, and we will adjust margins to balance the consumer offer.
Q: Considering your planned OPEX ramp-up in H2, what impact do you expect on the Adjusted EBIT margin? A: (Gavin O'Dowd, CEO) We will invest significantly in building US capabilities. The specific impact on a quarterly basis will be clearer in H2, but we anticipate substantial investment in the US market.