In This Article:
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Sales Growth: 25% increase in Q3 2024, excluding FX headwind.
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Nicotine Pouch Volume: 63% of total volumes, up 10 percentage points from Q3 2023.
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Adjusted EBIT: SEK 33.1 million, an 81% increase, with a 3.5% adjusted EBITDA margin.
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Core Markets Growth: 16% growth excluding FX headwind, driven by nicotine pouch category.
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Growth Markets Sales: 44% increase excluding a 4% currency headwind.
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Emerging Markets Sales: 64% increase quarter over quarter, with 20,000 active customers.
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Investment Level: SEK 69 million year-to-date Q3, representing 2.5% of sales.
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Net Debt to Adjusted EBITDA Ratio: 0.8, indicating a robust balance sheet.
Release Date: November 07, 2024
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 significant year-on-year growth in NPQ volumes, with a 42% increase in Q3 2024.
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Nicotine pouches accounted for 63% of total volumes, showing a robust trend and a 10% increase from Q3 2023.
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Sales grew by 25% in Q3 2024, excluding FX headwinds, indicating strong performance across both growth and core markets.
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Adjusted EBIT grew by 81% to SEK 33.1 million, improving the adjusted EBITDA margin from 2.4% to 3.5% year-over-year.
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The company has maintained a healthy balance sheet with a net debt to adjusted EBITDA ratio of 0.8, showcasing financial stability.
Negative Points
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Haypp Group AB (FRA:8QG0) is facing legal challenges, including a complaint from the city of San Francisco regarding the sale of flavored nicotine pouches.
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The company has created a reserve for the San Francisco complaint, indicating potential financial liabilities.
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Emerging markets remain small, with an EBITDA loss of SEK 7.8 million in Q3, highlighting ongoing investment needs.
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The company has suspended sales of flavored products in California due to new legislation, impacting approximately 10% of nicotine pouch volume.
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There is uncertainty regarding the regulatory environment in the US, which could affect future operations and profitability.
Q & A Highlights
Q: Can you provide an update on the withdrawn Swedish license and any dialogue with authorities? Have you submitted your appeal, and do you think the changes made could be sufficient for the license to be reinstated? A: Yes, we have submitted our appeal, moving the process into the legal system. We've implemented all recommendations from the municipality, but we expect the process to go through the courts, where we hope for a favorable outcome. Gavin O Dowd, CEO