Haypp Group Q1 2026: Strong Nicotine Pouch Growth Drives Record Sales as Investments Pressure Margins
Haypp Group reported a strong start to 2026, with Q1 net sales increasing 20% year-on-year to a record SEK 1.10bn, corresponding to 24% growth in constant currency terms. Growth was primarily driven by continued strength in nicotine pouches, where category volumes increased 40% during the quarter, supported by accelerating momentum in both the US and UK markets.
The Group sells reduced risk nicotine products (RRPs), mostly nicotine pouches, via its 16 e-commerce sites in 7 markets. Total order volumes increased 23% year-on-year, while the number of active consumers reached a new high of 652,000, up from 553,000 in the prior-year period (i.e. order growth above consumer growth). ~90% of Haypp’s revenue is from product sales and ~10% is from Media & Insights. However, 62% of Haypp’s gross profit comes from Media & Insights.
The company maintained stable profitability at the gross margin level despite continued investments in growth markets. Gross profit increased 20% year-on-year to SEK 205.0mn, while the gross margin remained broadly unchanged at 18.6% versus 18.5% in Q1 2025. The stable margin performance was supported by higher media and insights revenue contributions, partly offset by targeted pricing investments aimed at consumer acquisition and retention.
Adjusted EBITDA declined to SEK 52.0mn from SEK 68.1mn in the prior-year quarter, with the adjusted EBITDA margin contracting to 4.7% from 7.4%. Adjusted EBIT similarly declined to SEK 27.2mn from SEK 47.7mn, corresponding to a margin of 2.5% versus 5.2% a year earlier. The margin compression primarily reflected elevated investments in marketing and personnel, particularly across the US and UK operations, as Haypp continued scaling its Growth Markets segment. Increased spending on central HR, marketing infrastructure, and European public relations initiatives also contributed to the higher operating cost base.
Reported operating profit amounted to SEK 14.0mn, down from SEK 37.8mn in Q1 2025, including SEK 3.4mn in items affecting comparability related mainly to restructuring and severance costs tied to organisational changes. Net profit declined to SEK 4.5mn from SEK 30.4mn, while diluted earnings per share fell to SEK 0.14 from SEK 0.98. The quarter’s effective tax rate increased to 47.3%, partly reflecting amortisation effects associated with surplus values.
Core Markets (72% of net sales)
Core Markets – comprising Sweden and Norway – delivered net sales growth of 13% to SEK 799.2mn, or 14% in constant currency. Nicotine pouch volumes in the segment increased 17%, while the decline in traditional snus continued to moderate following earlier excise-driven pricing adjustments. EBITDA in Core Markets rose modestly to SEK 75.5mn, although the EBITDA margin declined to 9.4% from 10.3% due to higher marketing investments, increased warehouse labour costs, and expanded central functions.
In Sweden, Haypp appealed a court decision upholding the revocation of Snusbolaget Norden AB’s tobacco sales licence, though management does not expect any material financial or operational impact from the ruling.
Growth Markets (28% of net sales)
Growth Markets – which include the US, UK, Germany, Austria, and Switzerland – continued to scale rapidly, with net sales increasing 41% year-on-year to SEK 304.8mn, corresponding to 58% constant currency growth. Nicotine pouch volumes in the segment rose 83%, driven by strong US demand and accelerating UK growth trends. Active consumers in Growth Markets increased 66% year-on-year to 192,000. However, EBITDA losses widened to SEK –23.5mn from SEK –4.9mn as Haypp accelerated investments in marketing and personnel to capture long-term market share opportunities. Despite the higher operating losses, the segment’s gross margin remained relatively resilient at 19.9%.
Haypp’s nicotine pouch volume grew +123% and +102% in the U.S. and UK, respectively. Management indicated that US nicotine pouch market growth continues to track at or above expectations outlined during the company’s April 2025 Capital Markets Day. Haypp also expects broader product assortment expansion in the US as competition intensifies and consumer sophistication increases. The company reiterated expectations for additional FDA PMTA decisions during 2026 related to products included in the agency’s accelerated review programme.
In the UK, the recently enacted Tobacco and Vapes Bill establishes a formal regulatory framework for nicotine products, including provisions covering age verification, marketing restrictions, product standards, and potential nicotine content limitations. Haypp stated that its operating model is already broadly aligned with many of the proposed regulatory principles, particularly regarding age verification and responsible marketing practices. Moreover, removal of ultra strong products over 20mg/pouch (~20% of market) could reduce the current assortment disadvantage. The company has accelerated marketing investments ahead of implementation, which is expected around mid-2027.
In Austria, legislation restricting nicotine pouch sales to licensed tobacconists will lead Haypp to exit the market by the end of June 2026, although Austria represented only 0.7% of group sales during the quarter.
Liquidity & Outlook
Cash flow generation remained strong despite the lower earnings base. Operating cash flow increased to SEK 154.8mn from SEK 113.7mn, supported by favourable working capital movements, including higher deferred income. Net debt improved significantly to SEK 40.1mn from SEK 132.0mn at year-end 2025, while cash and cash equivalents increased to SEK 127.1mn. Haypp also maintained substantial liquidity headroom, with SEK 174mn in undrawn credit facilities at quarter-end.
Capital expenditure remained elevated as the company continued investing in infrastructure and automation. Total net investments amounted to SEK 31.2mn during the quarter, including SEK 18.8mn in technology and infrastructure development as well as increased spending on warehouse automation in the UK, with the new automated facility expected to become operational in Q3 2026.
Looking ahead, management expects the strong sales momentum seen in Q1 to continue through the remainder of 2026, supported by favourable category growth dynamics and continued investment in customer acquisition. The company reiterated confidence in achieving its long-term 2028 financial targets, which include annual constant currency revenue growth of 18–25% and an adjusted EBIT margin of 5.5% ±150bps as the business scales further. Haypp’s 2028 targets imply 2x revenue and 3-4x adj. EBIT, relative to FY24 results, largely driven by the U.S. growth.
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