Haypp Group: Riposte

“We successfully relaunched Zyn, the market-leading brand on our U.S. storefronts, and we maintained our strong gross margin, allowing us to initiate the necessary investment, primarily towards the U.S. market, to lay the foundation for the next growth chapter. Despite the increased level of investments, our adjusted EBIT remained flat versus the same period last year at 3.5%.” – Peter Deli, CFO, Haypp Group, Q3’25 remarks

Interpretations of Haypp Group’s Q3’25 results appear to be mixed. Gross margin remained strong, as it had throughout H1’25, showing a notable increase from Q3’24. At the same time, reported net sales were essentially flat, and active consumers decreased year over year. The latter two points reflect a negative currency impact, a lapping of the step-up benefit from the offline ZYN shortage in the comparable period last year, and the decline of snus in Core Markets.

It is all too easy to paint a story of a company forced to play defense. However, the company has demonstrated its ability to parry numerous challenges, all while thrusting forward on the attack. Context provided by like-for-like figures reveals a strong performance. During Q3’25, the group’s number of active consumers and the number of orders both showed a meaningful sequential increase. As articulated by management, growth in the US, the key to the Growth Markets segment, marked a radical reacceleration during October.

Build build build

Part of the mixed interpretations following Q3’25 results stemmed from the marked increase in overhead costs. However, this, directly weighing on group operating margin, was well-telegraphed by management during the first half of the year. This was the focus of my Q1’25 note, Land Grab, in which I stated the expectation for group profitability to soften throughout the remainder of the year relative to a strong first half. Expounded on in that note were three buckets of investment:

1. Building and scaling a team exclusively focused on the US market.

2. Investments in infrastructure to enhance customer convenience.

3. Marketing initiatives to raise awareness of the online sales channel.

In Q3’25, Haypp’s average number of full-time employees increased significantly from a year prior. The group continues to make headway in its infrastructure investments, not only in physical infrastructure but also in the technical capabilities of its websites. While less clearly laid out, there are ample opportunities for the group to raise awareness of the online sales channel and rekindle relationships with customers who had been lost due to the ZYN shortage affecting online availability.

Haypp Group is also well-positioned to enhance its customer acquisition and retention rates through a key initiative that I have not yet seen discussed anywhere.