By Timothy S. Donahue

Top Takeaways:

• Haypp posts Q3 net sales of SEK 952.1 million, driven by 21% like-for-like nicotine-pouch volume growth.
• ZYN’s return to the U.S. market shows “promising early indicators,” boosting Q4 expectations.
• Litigation settlement and increased expansion costs weigh on bottom-line profit, but leadership says the platform for 2026–2028 growth is strengthening.

Haypp Group reported stable third-quarter performance results for 2025, supported by strong underlying demand for nicotine pouches and stabilizing conditions across its key Scandinavian markets. The company is also seeing early momentum from the reintroduction of ZYN in the United States, which boosted expectations for year-end results.

Net sales amounted to SEK 952.1 million (US$95.5 million) for the quarter, up 0.8 percent compared to the same period last year, supported by a 21 percent like-for-like (LFL) volume increase in nicotine pouches, which now constitute 68 percent of Haypp’s entire oral-nicotine sales.

CEO Gavin O’Dowd opened the earnings call by emphasizing that the quarter showed not only category resilience but also significant improvements in margin structure and long-term platform stability.

“This quarter’s results demonstrate the strength of our underlying growth engine,” he said. “The U.S. return of ZYN strengthens the outlook for Q4. The U.S. market developments and our gross-margin expansion are reinforcing our overall foundation for growth.”

Gross margins increased to 18.8 percent from 17.6 percent a year earlier, driven by pricing and campaign optimization, purchasing improvements, and logistics efficiencies. Adjusted EBITDA grew to SEK 53.0 million, and adjusted EBIT rose to SEK 33.4 million.

Haypp’s reported operating profit, however, declined to SEK 6.2 million from SEK 12.4 million in Q3 2024 after absorbing a SEK 17.2 million litigation settlement disclosed during the period. Net profit also fell to SEK 4.5 million, down from SEK 16.9 million the year prior.

O’Dowd noted that the settlement would have a one-time impact on results. “The settlement is contained within the quarter and does not affect our medium-term guidance or the fundamentals of the business,” he said.

Despite bottom-line pressure, the CEO said the company delivered a stable quarter with progress across market segments, a strengthened supply chain, and further advancement of its multi-market e-commerce platform migration.

The company’s main Nordic operations—especially in Sweden and Norway—continued to support overall performance and strengthen Haypp’s position in oral-nicotine e-commerce. CFO Peter Deli told analysts, “Our Nordic performance remains stable and predictable. We maintained strong customer loyalty, and we continue to deliver in line with expectations.”

Haypp emphasized that strong category penetration, repeat purchase habits, and advanced digital retail capabilities continue to set its Nordic operations apart from competitors. O’Dowd reaffirmed confidence in the region: “We continue to see healthy category growth. The Nordic business remains robust, and our customers stay highly engaged.”

Executives also emphasized that neither the proposed excise adjustments nor packaging discussions across Scandinavian markets have had a material impact on consumer behavior. “We follow regulatory developments closely,” O’Dowd said, “but overall, we do not see any fundamental changes in demand.”

The company’s growth markets showed mixed headline results but strong underlying momentum. LFL growth in the U.S. and European expansion markets was notable, despite reported revenue reflecting discontinued tobacco products, previous U.S. state closures, and temporary ZYN unavailability earlier in the year.

The return of ZYN to U.S. channels during Q3 was highlighted as one of the most significant operational developments of the quarter. “We are seeing very strong engagement from U.S. consumers following the product’s reintroduction,” O’Dowd said. “We expect the benefits of ZYN’s return to be realized in Q4. The early signs are promising.”

The Emerging segment—which includes vaping and heated-tobacco products primarily in Germany and Sweden—continued to expand as well, with these two categories now comprising more than 70 percent of Emerging sales. Haypp said the relative size of this segment reflects both strong consumer interest in broader reduced-risk products (RRPs) and the company’s agility in markets where multi-category nicotine offerings are permitted.

The company also confirmed that it will stop selling UK nicotine vaping and heat-not-burn (HnB) products in Q4 2025, pending more regulatory clarity, calling it a smart and protective choice. “We are committed to operating within clear regulatory frameworks,” O’Dowd said. “Where the regulatory path is unclear, we take responsible actions to safeguard the long-term business.”

ZYN Re-Entry, Margin Expansion

A key focus of analyst questions during the earnings call was on U.S. growth expectations and how quickly ZYN’s reintroduction would impact Q4 performance. O’Dowd highlighted that early results are promising and align with expectations for increased demand. “The U.S. return of ZYN has strengthened our platform and will support Q4 results,” he said. “We are seeing encouraging signs from consumers immediately.”

Deli discussed the structural improvements that support margin recovery. “This is not a one-off. The margin gains reflect strategic changes in pricing, campaign optimization, purchasing patterns, and logistics,” he told analysts. He mentioned that the new e-commerce platform, which is nearly finished, would further streamline logistics processes and enhance long-term cost efficiency.

According to Haypp’s leadership, the platform overhaul is one of the company’s most significant long-term investments. The CEO said, “The migration is almost complete. Once finished, we will have a much more scalable and efficient operating infrastructure.” He described improved data integration, unified marketing capabilities, inventory efficiency, and enhanced fulfillment reliability as critical elements for Haypp’s 2026–2028 growth plan.

Analysts also examined competitive dynamics in Scandinavia. O’Dowd directly addressed these questions by saying, “Competition remains intense, but our customer loyalty and scale continue to set us apart. We feel confident in our Nordic model.”

When asked to clarify whether Nordic pricing pressures or promotional conditions had shifted, Deli emphasized the importance of consistency. “Our pricing and promotional environment remains stable. We continue to focus on sustainable margin development rather than short-term share capture.”

Haypp also reaffirmed its medium-term financial targets during the call. These include an annual organic revenue growth of 18–25 percent and adjusted EBIT margins around 5.5 percent (plus or minus 150 basis points) by 2028. “We remain committed to our long-term financial goals,” Deli said. “The fundamentals are strong.”

The CEO echoed these sentiments. “We are well on track,” O’Dowd said. “Our strategy is delivering, and we see significant opportunities ahead.”

Strong Q4 Expected

Closing the call, Haypp executives said Q4 is expected to reflect meaningful tailwinds from restored U.S. availability, the stable performance of Scandinavia, and the ongoing shift of consumers toward oral nicotine as reduced-risk alternatives become more established globally.

“The benefits of ZYN’s U.S. return and the margin expansion we are seeing will be more visible in Q4,” O’Dowd said. “We are building a foundation for sustainable long-term growth.”

Deli noted that although the litigation settlement and platform investments impacted profit this quarter, these factors do not change the company’s 2026–2028 framework. “Our underlying trends are strong,” he said. “The platform is nearly complete. The profitability structure is improving. We remain well positioned.”

For nicotine-pouch manufacturers, distributors, and broader reduced-risk product stakeholders, Haypp’s Q3 results highlighted the increasing consumer shift away from combustibles and toward oral nicotine. The company emphasized that nicotine pouches remain the fastest-growing reduced-risk segment across markets where they are allowed and noted that regulatory interest is expected to keep rising.

“Nicotine pouches have fundamentally changed the harm-reduction landscape,” O’Dowd said during the call. “We are seeing strong consumer adoption and increasing interest from regulators wanting clear frameworks.”

Haypp also emphasized that its hybrid multi-category expansion strategy—integrating oral nicotine, vaping, and heated-tobacco products where appropriate—remains key to meeting evolving consumer preferences. While the company highlighted pouches as its main category, it sees significant potential for future growth in vaping and HnB in markets with clear regulations.

As the year goes on, the company’s strategic priorities stay the same: reinforcing market leadership in Scandinavia, expanding U.S. operations, entering more regulated European markets, improving margins, and finalizing its global e-commerce platform.

O’Dowd said the company’s future looks promising. “We are well on track,” he said. “Our strategy is delivering, and we see significant opportunities ahead.”