Q2 2026 Haypp Group AB Earnings Call

August 12, 2026

Speaker #2: Your line is muted.

Speaker #3: Call recording is on.

Speaker #4: Welcome to the Haypp Group Q2 2026 earnings call. For the first part of the conference call, participants will be in listen-only mode. During the Q&A session, participants will be able to ask questions by dialing #5 on their telephone keypad.

Operator 1: Welcome to Haypp Group Q2 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing #5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Gavin O'Dowd and CFO Peter Deli. Please go ahead.

Operator: Welcome to Haypp Group Q2 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Gavin O'Dowd and CFO Peter Deli. Please go ahead.

Speaker #4: Now I will hand the conference over to the speakers, CEO Gavin O'Dowd and CFO Peter Deli. Please go ahead.

Speaker #5: Good morning and good afternoon, everyone. Welcome to Haypp Group's Q2 results. My name is Gavin O'Dowd, and together with our CFO, Peter Deli, we will take you through today's presentation.

Gavin O'Dowd: Good morning and good afternoon, everyone, and welcome to Haypp Group's Q2 results. My name is Gavin O'Dowd, and together with our CFO, Peter Deli, we will take you through today's presentation. Starting at slide 3, which is the agenda for today. I will take you through an overview of Haypp and the Q2 performance highlights, and Peter will take us through the consumer, financial, and segment performances before handing back to me for progress on our key strategic priority markets and an outlook. I would like to take you to slide 5 to remind you of some of the key dynamics around our business. We are an online retailer of risk-reduced products with a strong focus on nicotine pouches, which as of today, make up over 70% of our volumes.

Gavin O'Dowd: Good morning and good afternoon, everyone, and welcome to Haypp Group's Q2 results. My name is Gavin O'Dowd, and together with our CFO, Peter Deli, we will take you through today's presentation. Starting at slide three, which is the agenda for today. I will take you through an overview of Haypp and the Q2 performance highlights, and Peter will take us through the consumer, financial, and segment performances before handing back to me for progress on our key strategic priority markets and an outlook. I would like to take you to slide five to remind you of some of the key dynamics around our business. We are an online retailer of risk-reduced products with a strong focus on nicotine pouches, which as of today, make up over 70% of our volumes.

Speaker #5: Starting at slide 3, which is the agenda for today. I will take you through an overview of Haypp and the Q2 performance highlights, and Peter will take us through the consumer, financial, and segment performances.

Speaker #5: Before handing back to me for progress on our key strategic priority markets and an outlook, I would like to take you to slide 5, to remind you of some of the key dynamics around our business.

Speaker #5: We are an online retailer of risk-reduced products, with a strong focus on nicotine patches, which, as of today, make up over 70% of our volume.

Speaker #5: We have multiple storefronts per market, and we operate in five markets in Europe, in the US, and we have also recently launched in Saudi Arabia.

Gavin O'Dowd: We have multiple storefronts per market, and we operate in five markets in Europe, in the US, and we have also recently launched in Saudi Arabia. Approximately 90% of our revenue comes from product sales, with sales of Media and Insights to brand owners accounting for just over 10%. While the jurisdictional complexity around the sale of nicotine is often viewed as a hardship, given our expertise and scale, we view it as a barrier to entry. We are targeting to approximately double our 2024 revenue by 2028 and increase our 2024 EBIT by 3 to 4x. Moving to slide 6. The scale of market growth potential in our existing geographic footprint is determined by the US and the UK. While the UK is a distant second, it has some very favorable long-term dynamics.

Speaker #5: Approximately 90% of our revenue comes from product sales, with sales of media and insights to brand owners accounting for just over 10%. While jurisdictional complexity around the sale of nicotine is often viewed as a hardship, given our expertise and scale, we view it as a barrier to entry.

Speaker #5: We are targeting to approximately double our 2024 revenue by 2028 and increase our 2024 EBIT by three to four times. Moving to slide 6, the scale of market growth potential in our existing geographic footprint is determined by the US and the UK.

Speaker #5: While the UK is a distant second, it has some very favorable long-term dynamics. Continuing on to slide 7, the US and the UK are also the two markets with extremely low online penetration rates, reflecting the early stages of the category lifecycle.

Gavin O'Dowd: Continuing on to slide 7, the US and the UK are also the two markets with extremely low online penetration rates, reflecting the early stages of the category life cycle, including the historically limited assortment in the US. Hence, these are two markets which we have dedicated significant resources to in recent quarters. We will touch on this more throughout our presentation. Moving into the quarterly performance updates and remaining on slide 7 for a moment. This quarter has been our fastest volume and sales year-on-year growth since we IPO'd 5 years ago. It is also our highest-ever gross margin. Moving to slide 9, we are happy to see continued acceleration in nicotine pouches to 45% year-on-year growth. In absolute volume, this is by far our fastest year-on-year nicotine pouch growth in the history of the group.

Speaker #5: Including the historically limited assortment in the US. Hence, these are two markets to which we have dedicated significant resources in recent quarters. We will touch on this more throughout our presentation.

Speaker #5: Moving into the quarterly performance updates, and remaining on slide 7 for a moment, this is the first quarter—sorry, this quarter has been our fastest volume and sales year-on-year growth since the IPOed 5 years ago.

Speaker #5: It is also our highest-ever gross margin. Moving to slide 9, we are happy to see continued acceleration in nicotine patches, with 45% year-on-year growth.

Speaker #5: In absolute volume, this is by far our fastest year-on-year nicotine patch growth in the history of the group. Growth markets have been a significant contributor, with 91% year-on-year growth, and now account for almost half of our nicotine patch volume.

Gavin O'Dowd: Growth markets have been a significant contributor with 91% year-on-year growth and now account for almost half of our nicotine pouch volume. The strong performance in the growth segment accounted for 71% of the group nicotine pouch growth. This momentum is underpinned by the group's investment focus and supports our future growth expectations. Moving to our performance highlights on slide 10, an increase in active consumers was the primary driver of our growth. However, increased share of consumption among existing consumers in our core markets also contributed to the 28% volume growth. Gross margins were upcycling to a record high, generating a gross profit increase of 29%. This consisted of a substantial increase in Media and Insights, which was partially reinvested into the consumer offer to further accelerate the flywheel. Year on year, we have materially increased our investment and capabilities in the US and the UK.

Speaker #5: The strong performance in the growth segment accounted for 71% of the group nicotine pouch growth. This momentum is underpinned by the group's investment focus and supports our future growth expectations.

Speaker #5: Moving to our performance highlights on slide 10. An increase in active consumers was the primary driver of our growth. However, increased share of consumption among existing consumers in our core markets also contributed to the 28% volume growth.

Speaker #5: Gross margins were up slightly to a record high, generating a gross profit increase of 29%. This consisted of a substantial increase in media and insights, which was partially reinvested into the consumer offer to further accelerate the flywheel.

Speaker #5: Year on year, we have materially increased our investment and capabilities in the US and the UK. This, combined with increases in marketing expenditure while the window to do so remains open, has led to a reduction in EBIT margins.

Gavin O'Dowd: This, combined with increases in marketing expenditure while the window to do so remains open, has led to a reduction in the EBIT margins, which we expect to level off and to continue at this level for the remainder of this year before trending back towards our 2028 guidance. On slide 11, we show the actual performance of each of these KPIs and their relative change versus prior year. Growth in consumer flowed through to orders and volume, leading to our fastest net sales growth in 5 years, which in turn led to our highest-ever gross margins. The planned investments, predominantly in the US and the UK, have temporarily reduced our EBIT. With that, I will hand over to Peter.

Speaker #5: Which we expect to level off and continue at this level for the remainder of this year, before trending back towards our 2028 guidance.

Speaker #5: On slide 11, we show the actual performance of each of these KPIs and their relative change versus the prior year. Growth in consumers flowed through to orders and volume, leading to our fastest net sales growth in five years, which in turn led to our highest-ever gross margins.

Speaker #5: The planned investments, predominantly in the US and the UK, have temporarily reduced our EBIT. With that, I will hand over to Peter. Thank you, Gavin.

Peter Deli: Thank you, Gavin, and good morning. Good afternoon, everyone. Let me take you through our Q2 performance. The headline this quarter is strong, broad-based growth, highest organic growth rate since IPO. We have accelerated both our top line and our consumer base. Our fundamentals remain solid and exactly as planned, we are carrying a deliberate level of investment that is weighing on near-term profit. Let me now go a level deeper, starting with our consumers, because ultimately, consumer growth is what underpins everything else in the model. Going to slide 13, this slide shows the continued strength in our consumer base. Group active consumers reached a new all-time high, up 24.4% year on year. There are two reinforcing trends behind it, rapid growth in our growth markets and core turning firmly into growth.

Speaker #5: Good morning, good afternoon, everyone. Let me take you through our Q2 performance. The headline this quarter is strong, broad-based growth, with the highest organic growth rates since the IPO. We have accelerated both our top line and our consumer base. Our fundamentals remain solid, and, exactly as planned, we are carrying a deliberate level of investment that is weighing on near-term profit.

Speaker #5: Let me now go a level deeper, starting with our consumers, because ultimately, consumer growth is what underpins everything else in the model.

Speaker #5: Going to slide 13, this slide shows the continued strength in our consumer base. Group active consumers reached a new all-time high, up 24.4% year-on-year. There are two reinforcing trends behind it.

Speaker #5: Rapid growth in our gross markets and core, turning firmly into gross. The standout is the gross segment, where active consumers were up 74.2%, driven primarily by the US and UK.

Peter Deli: The standout is the growth segment, where active consumers were up 74.2%, driven primarily by the US and UK. Our marketing there is showing clear traction with strong conversion and repeat purchase behavior. In core, active consumers grew 9.3%, a meaningful improvement versus the declines we saw earlier last year. This is supported by a growing number of nicotine pouch consumers and a stabilizing snus base. The momentum in both core and growth gives us confidence that our acquisition strategy is working, paired with sustained strong retention, and that we are building a solid foundation for continued volume and sales acceleration. Slide 14. Here we break volume down by category. Nicotine pouches remain the engine. Nicotine pouch weight in group volume supports our future growth with the US and UK the primary market drivers.

Speaker #5: Our marketing is showing clear traction, with strong conversion and repeat purchase behavior. In our core, active consumers grew 9.3%, a meaningful improvement versus the declines we saw earlier last year. This is supported by a growing number of nicotine pouch consumers and a stabilizing snus base.

Speaker #5: The momentum in both core and gross gives us confidence that our acquisition strategy is working, paired with sustained strong retention, and that we are building a solid foundation for continued volume and sales acceleration.

Speaker #5: Slide 14: Here we break volume down by category. Nicotine pouches remain the engine. Nicotine pouch weight in group volume supports our future growth, with the US and UK the primary market drivers.

Speaker #5: In core markets, NP and nicotine pouches are now around 54% of volume and still growing at high teen rates, taking meaningful market share. On snus, volume decline continues to moderate since Q4 last year, helped by an enhanced consumer offer designed to capture mixed category household purchases in Swedish homes.

Peter Deli: In core markets, nicotine pouches are now around 54% of volume and still growing at high teen rates, taking meaningful market share. On snus, volume decline continues to moderate since Q4 last year, helped by an enhanced consumer offer designed to capture mixed category household purchases in Swedish homes. On vapor heat-not-burn, the UK discontinuation reduced the year-on-year growth, but the underlying trajectory is expected to continue with strong growth both in Germany and Sweden. Important to note that is ahead of consumer base growth across all markets, signaling that our offering resonates well with the consumers, and we are gaining share of wallet. Overall, the category dynamics remain very supportive, and our scale positions as well to capture the ongoing shift toward reduced-risk products. Now let me turn to the financials and walk you through the P&L and the balance sheet.

Speaker #5: On vape and heat-not-burn, the UK discontinuation reduced the year-on-year growth, but the underlying trajectory is expected to continue with strong growth both in Germany and Sweden.

Speaker #5: It's important to note that this is ahead of consumer-based growth across all markets, signaling that our offering resonates well with consumers and that we are gaining share of wallet.

Speaker #5: Overall, the category dynamics remain very supportive, and our scale positions us well to capture the ongoing shift toward reduced-risk products. Now, let me turn to the financials and walk you through the P&L and the balance sheet.

Speaker #5: Starting with the net sales on slide 16, we saw further acceleration in our top line. Net sales grew 27.7% as reported and 27.1% at constant currency, the highest constant currency growth rates we have delivered since IPO.

Peter Deli: Starting with the net sales on slide 16, we saw further acceleration in our top line. Net sales grew 27.7% as reported and 27.1% at constant currency, the highest constant currency growth rates we have delivered since IPO. In absolute terms, net sales reached almost 1.2 billion SEK. The negative FX translation impact is driven by the NOK to SEK translation, with US dollar to SEK partly offsetting it. What I am particularly pleased about is that all critical parts of the business contributed. Nicotine pouches remained the key growth driver, and given NP is above 70% of our volume, that strong growth plus the rising share of sales creates a positive mix effect. Within nicotine pouches, the US and UK are the key drivers with solid mid-teen growth in the core markets.

Speaker #5: In absolute terms, net sales reached almost SEK 1.2 billion. The negative translation impact is driven by the NOK to SEK translation, with the US dollar to SEK partly offsetting it.

Speaker #5: What I'm particularly pleased about is that all critical parts of the business contributed. Nicotine pouches remained the key growth driver, and given NP is above 70% of our volume, that strong growth, plus the rising share of sales, creates a positive mix effect.

Speaker #5: Within nicotine pouches, the US and UK are the key drivers, with solid, meeting growth in the core markets. Price mix in the nicotine pouch segment was negative in the quarter, driven by the growth segment—mainly the US business.

Peter Deli: Price mix in the nicotine pouch segment was negative in the quarter, driven by the growth segment, mainly the US business. I want to stress that these promotions are manufacturer-led and margin neutral for us. There is an offset in our cost of goods sold. Snus sales stabilized after a few challenging quarters in 2025. The decline is lower now than what we have anticipated at our capital markets day, helped by the improved Swedish consumer offer. Vape and heat-not-burn contributed to growth despite the UK discontinuation, with Sweden and Germany volume up by 70%. On slide 17, let me talk to you about our gross profit. We delivered gross profit of 229 million SEK this quarter, a major step-up in absolute terms, up 29.2% year on year. Gross profit growth run slightly ahead of net sales, so gross margin improved a marginal 0.2 points to 19.5%.

Speaker #5: I want to stress that these promotions are manufacturer-led and margin-neutral for us. There is an offset in our cost of goods sold. Snooze sales stabilized after a few challenging quarters in 2025; the decline is slower now than what we had anticipated at our Capital Markets Day, helped by the improved Swedish consumer offer.

Speaker #5: Vape and heat-not-burn contributed to growth despite the UK discontinuation, with volume in Sweden and Germany up by 70%. On slide 17, let me talk to you about our gross profit.

Speaker #5: We delivered a gross profit of SEK 229 million this quarter, a major step up in absolute terms, up 29.2% year-on-year. Gross profit growth ran slightly ahead of net sales, so gross margin improved a marginal 0.2 points to 19.5%.

Speaker #5: Within the margin, there are two opposing forces. The fast growth of median insights lifted the margin, adding 0.9 percentage points to bring median insights' gross margin contribution to 11.9%, with growth across all key markets.

Peter Deli: Within the margin, there are two opposing forces. The fast growth of Media and Insights lifted the margin, adding 0.9 points to bring Media and Insights gross margin contribution to 11.9% with growth across all key markets. We then reinvested much of that incremental benefit back into our consumer offer, mainly targeted pricing, which we believe is the right trade-off while the acquisition window is open. Moving to slide 18, overheads increased in the quarter, and this was fully expected. From last quarter, we break the base into three elements, marketing, fulfillment, and G&A, and total overhead was 14.8% of net sales. Marketing at 1.8% increased as we leaned into consumer acquisition in the US and UK while the opportunity window is open, and we are seeing substantial increases in new nicotine pouch consumer acquisition rates in both markets.

Speaker #5: We then reinvested much of that incremental benefit back into our consumer offer, mainly targeted pricing, which we believe is the right trade-off while the acquisition window is open.

Speaker #5: Moving to slide 18, overheads increased in the quarter and this was fully expected. From last quarter, we break the base into three elements: marketing, fulfillment, and G&A. Total overhead was 14.8% of net sales.

Speaker #5: Marketing at 1.8% increased as we leaned into consumer acquisition in the US and UK while the opportunity window is open, and we are seeing substantial increases in new nicotine pouch consumer acquisition rates in both markets.

Speaker #5: We are pleased with some of the channels' performance, particularly with high purchase intent, lower-funnel marketing, and we will continue to deploy capital subject to the ongoing performance.

Peter Deli: We are pleased with some of the channels' performance, particularly with high purchase intent, lower-funnel marketing, and we will continue to deploy capital subject to the ongoing performance. We will be efficient and disciplined with the capital we deploy. Fulfillment at 1.6% is where our scale benefits shows. The cost base grew 25% while volume grew 28%, so we are growing into our warehouse infrastructure. The UK move to a larger automated facility will extend that. G&A at 11.3% is the biggest driver of the increase. This is mainly driven by the organizational build-out in the US and UK, and within our central functions, including AI. Some of this structure is deliberately ahead of the current business because the skill sets and local focus are critical to our long-term success. We expect G&A intensity to moderate and as a percentage of net sales, we won't expect further increases for H2.

Speaker #5: We will be efficient and disciplined with the capital we deploy. Fulfillment at 1.6% is where our scale benefits show. The cost base grew 25%, while volume grew 28%, so we are growing into our warehouse infrastructure.

Speaker #5: The UK move to a larger automated facility will extend that. G&A at 11.3% is the biggest driver of the increase. This is mainly driven by the organizational build-out in the US and UK, and within our central functions including AI.

Speaker #5: Some of these structures are deliberately ahead of the current business because the skill sets and local focus are critical to our long-term success. We expect G&A intensity to moderate, and as a percentage of net sales, we don't expect further increases for H2.

Speaker #5: Given the size of the Group's G&A cost base relative to adjusted EBIT, management sees significant potential to improve productivity and scalability through targeted AI investments.

Peter Deli: Given the size of the group's G&A cost base relative to adjusted EBIT, management sees significant potential to improve productivity and scalability through targeted AI investments. These initiatives are expected to further improve operational efficiency across the organization. Moving to slide 19, this brings us to adjusted EBIT, which was SEK 28.6 million with a margin of 2.4%, down from 4.2% last year. I want to be transparent about this. The compression is entirely by design. Higher gross profit and a stable gross margin are working in our favor and show that our business model is robust, but the investments in G&A, mainly personal, and in marketing more than offset that at the EBIT line. Growth segment accounting for the compression. We are prioritizing consumer acquisition and market share gains in the US and UK, with both markets already showing substantial growth versus last year.

Speaker #5: These initiatives are expected to further improve operational efficiency across the organization. Moving to slide 19, this brings us to adjusted EBIT, which was SEK 28.6 million, with a margin of 2.4%, down from 4.2% last year.

Speaker #5: I want to be transparent about this. The compression is entirely by design. Higher gross profit and a stable gross margin are working in our favor and show that our business model is robust, but the investments in G&A, mainly personnel, and in marketing more than offset that at the EBIT line.

Speaker #5: Growth segment accounting for the compression. We are prioritizing consumer acquisition and market share gains in the US and UK, with both markets already showing substantial growth versus last year.

Speaker #5: We expect this investment phase to continue through 2026, with margin expansion resuming as scale benefits flow through in 2027 and 2028. Slide 20: Finally, on the balance sheet, working capital, and leverage.

Peter Deli: We expect this investment phase to continue through 2026 with margin expansion resuming as scale benefits flow through in 2027 and 2028. Slide 20. Finally, on the balance sheet, working capital and leverage. The sequential increase in inventory mainly reflects opportunistic inventory build across several markets with some additional US stock build for new product launches and stock in our newly established Swiss warehouse accounting for the remainder. Net working capital turnover remained in line with the range of prior quarters despite the opportunistic stock builds. Net debt increased sequentially, driven by that higher working capital and increased lease commitments and leverage moved from 0.2 times to around one times on a net debt to last 12 months adjusted EBITDA basis. That is still a low and very manageable level, and we remain disciplined in managing working capital as we scale.

Speaker #5: The sequential increase in inventory mainly reflects opportunistic inventory build across several markets, with some additional U.S. stock build for new product launches, and stock in our newly established Swiss warehouse accounting for the remainder.

Speaker #5: Net working capital turnover remained in line with the range of prior quarters, despite the opportunistic stock builds. Net debt increased sequentially, driven by that higher working capital and increased lease commitments, and leverage moved from 0.2 times to around 1 times on a net debt to last 12 months’ adjusted EBITDA basis.

Speaker #5: That is still a low and very manageable level, and we remain disciplined in managing working capital as we scale. Let me now turn to segment performance, taking Growth and Core in turn.

Peter Deli: Let me now turn to segment performance, taking growth and Core in turn. This is where you can really see the two engines of the model, growth driving acceleration and future share, Core providing the profitable cash-generative foundation. Starting with the Growth segment on slide 22. This is where we see the most significant acceleration. Active consumers grew 74.2%, orders 72.3%. This is a notable increase of new customers in the quarter explaining the slower growth of order number. Total volume up 80%, with nicotine pouch volume up 91%. The difference is driven by the discontinuation of UK vape. Growth segment represents 47% of the group's nicotine pouch volume. Both the US and UK delivered exceptional performance, with volumes up by 125% and 113% respectively. Net sales grew 57% or 62% at constant currency, and the segment now represents a 30% share of the group net sales.

Speaker #5: This is where you can really see the two engines of the model: growth-driving acceleration, and futures share core providing the profitable, cash-generative foundation.

Speaker #5: Starting with the growth segment on slide 22, this is where we see the most significant acceleration. Active consumers grew 74.2% and orders 72.3%. This is a notable increase of new customers in the quarter, explaining the slower growth of order number.

Speaker #5: Total volume is up 80%, with nicotine pouch volume up 91%. The difference is driven by the discontinuation of UK vape. The growth segment represents 47% of the group’s nicotine pouch volume. Both the US and UK delivered exceptional performance, with volumes up by 125% and 113%, respectively.

Speaker #5: Net sales grew 57%, or 62% at constant currency, and the segment now represents a 30% share of group net sales. The gap between net sales growth and volume growth is driven by manufacturers' finance price reductions.

Peter Deli: The gap between net sales growth and volume growth is driven by manufacturers' finance price reductions. Gross margin was 18.9%, down 5.5 points. That reflects an exceptionally strong prior year comparison and the deliberate investment into our consumer offer this quarter. EBITDA was negative at SEK 32.5 million. This is expected and reflects the investment phase we are in as we build local teams and scale acquisition. Those investments are what accelerate our long-term share capture, and they are already translating into very strong consumer and volume growth. To support the further development of this segment, we automatized our UK warehouse and localized our operations in Switzerland to improve consumer experience in both markets. As communicated earlier, we exited Austria from 1 July. Austria generated less than SEK 9 million revenue in Q2 2026.

Speaker #5: Gross margin was 18.9%, down 5.5 points. That reflects an exceptionally strong prior year comparison and the deliberate investment into our consumer offer this quarter.

Speaker #5: EBITDA was negative at SEK 32.5 million. This is expected and reflects the investment phase we are in as we build local teams and scale acquisition.

Speaker #5: Those investments are what we want to accelerate our long-term share capture, and they are already translating into very strong consumer and volume growth. To support the further development of this segment, we automatized our UK warehouse and localized our operations in Switzerland to improve consumer experience in both markets.

Speaker #5: As communicated earlier, we exited Austria as of July 1. Austria generated less than SEK 9 million in revenue in Q2 2026. Overall growth is performing in line with our expectations and is the primary driver of our long-term revenue and EBIT expansion.

Peter Deli: Overall, growth is performing in line with our expectations and is the primary driver of our long-term revenue and EBIT expansion. Moving to slide 23. In the Core segment, we delivered steady, predictable performance consistent with the role it plays in the portfolio. Active consumers grew 9.3% and total volume 11.3%, driven by nicotine pouch and supported by the improved snus offer. NP volume up 19%. Volume growth ahead of consumer growth is a clear sign we are increasing share of wallet. Net sales grew 18.2%, or 15.8% at constant currency. Positive price mix driven by increased Media and Insights revenue. The increased Media and Insights revenue led to a gross margin increase of 2.1 points to 19.7%, and EBITDA grew 33% to SEK 87.9 million, a healthy 10.7% margin.

Speaker #5: Moving to slide 23, in the core segment we delivered steady, predictable performance consistent with the role it plays in the portfolio. Active consumers grew 9.3% and total volume 11.3%, driven by nicotine pouches and supported by the improved snus offer.

Speaker #5: MP volume is up 19%. Volume growth ahead of consumer growth is a clear sign we are increasing share of wallet. Net sales grew 18.2%, or 15.8% at constant currency, with a positive price mix driven by increased media and insights revenue.

Speaker #5: The increased media and insights revenue led to a gross margin increase of 2.1 points to 19.7%, and EBITDA grew 33% to SEK 87.9 million—a healthy 10.7% margin.

Speaker #5: So, while growth is the accelerator, core remains the foundation of our margin and cash generation, and its rising nicotine pouch penetration supports long-term margin expansion.

Peter Deli: While growth is the accelerator, Core remains the foundation of our margin and cash generation, and its rise in nicotine pouch penetration supports long-term margin expansion. Strong growth across both segments reflects the continued execution of our strategy and supports our ambition to drive further profit expansion over time. With this, I give the word back to Gavin to guide us through the strategic priorities.

Speaker #5: Strong growth across both segments reflects the continued execution of our strategy and supports our ambition to drive further profit expansion over time. With this, I give the word back to Gavin to guide us through the strategic priorities.

Speaker #1: Thank you, Peter. I'd now like to take you through our priority markets. Moving to slide 25 and the U.S., I would like to touch on how the market conditions are changing and how these changes are positively impacting our business.

Gavin O'Dowd: Thank you, Peter. I would now like to take you through our priority markets. Moving to slide 25 and the US, I would like to touch on how the market conditions are changing and how these changes are positively impacting our business. In May this year, the FDA announced a level of enforcement discretion, which we expect to accelerate new product introductions significantly versus our Q1 call. This rapid acceleration of new product launches has already begun and is expected to continue well beyond 2026. This decision is likely to support market growth rates as both more consumers find suitable nicotine pouch products to switch to and more existing JUUL users switch entirely to nicotine pouches. This US environment is becoming analogous to the environment which began in Sweden and Norway approximately 6 years ago, and is an environment we have had strong success in.

Speaker #1: In May this year, the FDA announced a level of enforcement discretion, which we expect to accelerate new product introductions significantly versus our Q1 goal.

Speaker #1: This rapid acceleration of new product launches has already begun and is expected to continue well beyond 2026. This decision is likely to support market growth rates, as both more consumers find suitable nicotine pouch products to switch to and more existing JUUL users switch entirely to nicotine pouches.

Speaker #1: The US environment is becoming analogous to the environment that began in Sweden and Norway approximately six years ago, and it is an environment in which we have had strong success.

Speaker #1: A broadening assortment has historically been an accelerator for Haypp. As our operating model enables us to carry a significantly larger range of quality products.

Gavin O'Dowd: A broadening assortment has historically been an accelerator for Haypp, as our operating model enables us to carry a significantly larger range of quality products. In addition, our stores are designed to help consumers navigate the product differences to find the product which is right for them. While expectations of some new product launches was a material factor in our decision to invest in the US, the new outlook suggests an even better opportunity than initially expected. During the quarter, we have experienced strong performance in new customer acquisition, particularly from consumers with high purchasing intent. We will continue to refine our marketing while the opportunity remains. In addition, we have also improved on our referral and loyalty programs. While it is still early days, the improvements are having a meaningful impact.

Speaker #1: In addition, our stores are designed to help consumers navigate the product differences to find the product which is right for them. While expectations of some new product launches were a material factor in our decision to invest in the US, the new outlook suggests an even better opportunity than initially expected.

Speaker #1: During the quarter, we have experienced strong performance in new customer acquisition, particularly from consumers with high purchasing intent. We will continue to refine our marketing while the opportunity remains.

Speaker #1: In addition, we have also improved on our referral and loyalty programs. While still early days, the improvements are having a meaningful impact. The range of activities has led to 125% year-on-year volume growth in a market which is growing between 15% and 20%.

Gavin O'Dowd: The range of activities have led to 125% year-on-year volume growth in a market which is growing between 15% and 20%. Moving to the UK in the next slide 26. The Tobacco and Vapes Bill, which received Royal Assent at the end of April, appears to remain strongly supported by the new government. We continue to expect the secondary legislation to iron out the remaining details, raising the compliance requirements for other retailers. The secondary legislation will be implemented in pieces throughout this year and 2027, with some of the more notable impacts expected in June of 2027. As a reminder, these changes are expected to further consolidate our market leading position and accelerate migration to online. In addition, we expect the ultra strong segment, which we do not sell, to be banned, removing our assortment disadvantage.

Speaker #1: Moving to the UK in the next slide, slide 26. The tobacco and vape bill, which received Royal Assent at the end of April, appears to remain strongly supported by the new government.

Speaker #1: We continue to expect the secondary legislation to iron out the remaining details, raising the compliance requirements for other retailers. The secondary legislation will be implemented in pieces throughout this year and 2027, with some of the more notable impacts expected in June 2027.

Speaker #1: As a reminder, these changes are expected to further consolidate our market-leading position and accelerate migration to online. In addition, we expect the ultra-strong segment—which we don't sell—to be banned.

Speaker #1: Removing our assortment disadvantage. I would also like to draw your attention to some of our key highlights in the UK market during the quarter.

Gavin O'Dowd: I would also like to draw your attention to some of our key highlights in the UK market during the quarter. The enhanced local capabilities which we built up in Q1 are now fully embedded and already performing well, leading to a continued acceleration in new consumer inflow while maintaining our excellent retention rates. Our performance is supported by a high level of brand owner support and high demand for both our Media and Insights. We successfully automated our UK warehouse to support continued growth over the long term. This range of activities has led to strong triple digit growth in the quarter, which is over twice that of the estimated overall market growth. Moving to the next slide 27. There has been little change in either European regulation or Swedish litigation since last quarter.

Speaker #1: The enhanced local capabilities which we built up in Q1 are now fully embedded and already performing well, leading to a continued acceleration in new consumer inflow.

Speaker #1: While maintaining our excellent retention rates, our performance is supported by a high level of brand owner support and strong demand for both our media and our insights.

Speaker #1: We successfully automated our UK warehouse to support continued growth over the long term. This range of activities has led to strong, triple-digit growth in the quarter.

Speaker #1: This is over twice that of the estimated overall market growth. Moving to the next slide, slide 27. There has been little change in either European regulation or Swedish litigation since last quarter.

Speaker #1: The Tobacco Tax Directive continues to be negotiated, with a first draft still expected this year. The European Commission recently completed a public consultation on the third Tobacco Products Directive.

Gavin O'Dowd: The Tobacco Tax Directive continues to be negotiated, with a first draft still expected this year. The European Commission recently completed a public consultation on the third Tobacco Products Directive. Both directives are expected to undergo revision during the negotiation period from member states later this year. Regarding the Swedish litigation, Haypp is still awaiting a decision on the appeal from the Supreme Court of Sweden. Haypp does not expect any material impact from the decision. Moving to the penultimate slide 29. In summary, our markets continue to evolve favorably, with continued category growth leading to sustainable regulation in line with Haypp's operating model. Investment in capabilities and marketing in the US and the UK are driving rapid consumer-based growth, which in turn has led to our fastest organic growth rates since before we IPO'd in 2021.

Speaker #1: Both directives are expected to undergo revision during the negotiation period from member states later this year. Regarding the Swedish litigation, Haypp is still awaiting a decision on the appeal from the Supreme Court.

Speaker #1: Haypp does not expect any material impact from the decision. Moving to the penultimate slide, slide 29—in summary, our markets continue to evolve favorably, with continued category growth leading to sustainable regulation in line with Haypp's operating model.

Speaker #1: Investment in capabilities and marketing in the US and the UK are driving rapid consumer base growth, which in turn has led to our fastest organic growth rates since before we IPOed in 2021.

Speaker #1: This growth has fed our flywheel model, leading to the highest-ever gross margin, while we continue to further invest in the consumer offer. Our decision to increase our G&A to drive this growth is complete and is expected to stabilize at current levels for the rest of this year and scale in future years.

Gavin O'Dowd: This growth has fed our flywheel model, leading to the highest-ever gross margin while continuing to further invest into the consumer offer. Our decision to increase our G&A to drive this growth is complete and is expected to stabilize at current levels for the rest of this year and scale in future years. We are on track to deliver our 2028 revenue and profit targets. Moving to the next slide, to recap on those targets, which are set for 2028. Revenue growth of 18% to 25% CAGR from 2024 at constant currency, and a 5.5% adjusted EBIT margin, plus or minus 150 basis points, subject to the investment opportunities which remain at that time. Before handing over to the operator, I would like to thank the team for the great work in recent quarters, which led to the strong performance in this quarter.

Speaker #1: We are on track to deliver our 2028 revenue and profit targets. Moving to the next slide, to recap on those targets, which are set for 2028: revenue growth of 18 to 25% CAGR from 2024 at constant currency.

Speaker #1: And a 5.5% adjusted EBIT margin, plus or minus 150 basis points, subject to the investment opportunities which remain at that time.

Speaker #1: Before handing over to the operator, I'd like to thank the team for the great work in recent quarters, which led to the strong performance in this quarter.

Speaker #1: With that, I will hand over to the operator for questions.

Gavin O'Dowd: With that, I will hand over to the operator for questions.

Speaker #2: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue if you wish to withdraw your question, please dial pound key six on your telephone keypad.

Operator 2: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Christian Small from Pareto Securities. Please go ahead.

Operator: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Christian Small from Pareto Securities. Please go ahead.

Speaker #2: The next question comes from Christian Small from Pareto Securities. Please go ahead.

Speaker #3: Hi, guys. Thank you for taking my question. So, starting off with expansion to Saudi Arabia—very interesting. Could you maybe expand a bit on the rationale behind this, and also what you expect in terms of both short-term contribution and long-term contribution from this market?

Christian Small: Hi, guys. Thank you for taking my question. Starting off with the expansion to Saudi Arabia, very interesting. Could you maybe expand a bit on the rationale behind this and also what you expect in terms of both short-term contribution but also long-term contribution from this market?

Christian Moe: Hi, guys. Thank you for taking my question. Starting off with the expansion to Saudi Arabia, very interesting. Could you maybe expand a bit on the rationale behind this and also what you expect in terms of both short-term contribution but also long-term contribution from this market?

Speaker #1: Good afternoon, Christian. Yes, so of course we're very much in the early days. It's a very recent launch, but we entered into Saudi Arabia. There were a few fundamental rationales for this.

Gavin O'Dowd: Good afternoon, Christian. Yes, we are very much in the early days. It is a very recent launch where we entered into Saudi Arabia. There were a few fundamental rationales for this. First and foremost, Saudi Arabia has now become, based on our calculations, the second-largest nicotine pouch market in the world and is still showing very robust growth, which I think creates a huge opportunity for the category in general at this point in time. I think in addition, we are dealing with a very stable regulatory environment whereby the recognition of risk reduction is well accepted into the regulation and into the general policy within KSA. So I think these are the main reasons why we see it as being a significant opportunity.

Speaker #1: First and foremost, Saudi Arabia has now become, based on our calculations, the second-largest nicotine pouch market in the world and is still showing very robust growth.

Speaker #1: Which I think creates a huge opportunity for the category in general at this point in time. I think, in addition, we're dealing with a very stable regulatory environment, whereby the recognition of risk reduction is well accepted in the regulation and in the general policy within KSA.

Speaker #1: So, I think these are the main reasons why we see it as being a significant opportunity. But we do recognize, as a team which has expanded into multiple markets over the last nine years since I've been here, that the early days of entering into a market make it quite difficult when it comes to predicting what impact it will have over the medium to long term.

Gavin O'Dowd: But we do recognize, as a team which have expanded into multiple markets over the last 9 years since I have been here, that the early days of entering into a market makes it quite difficult when it comes to predicting what impact it will have over the medium to long term. But we do see strong potential within it, hence why we are dedicating a degree of resources and energy towards it. But when it comes to quantifying what that would be, I consider 1 month in to be a little bit premature on that front.

Speaker #1: But we do see strong potential within it, hence why we're dedicating a degree of resources and energy towards it. But when it comes to quantifying what that would be, I consider one month in to be a little bit premature on that front.

Speaker #3: Yeah, makes sense. And then you kind of touched upon this, but could you maybe expand a bit on the new flavors launched in the US during the quarter?

Christian Small: Yeah. Makes sense. You kind of touched upon this, but could you maybe expand a bit on the new flavors launched in the US during the quarter, so with ZYN Ultra and the newer editions. So how have they been received during the quarter?

Christian Moe: Yeah. Makes sense. You kind of touched upon this, but could you maybe expand a bit on the new flavors launched in the US during the quarter, so with ZYN Ultra and the newer editions. So how have they been received during the quarter?

Speaker #3: So, with Sinultra and the newer editions, how have they been received during the quarter?

Speaker #1: Yes. So in general, we don't comment publicly on how individual brand owners are performing throughout the quarter. We leave it to them to share their views on that.

Gavin O'Dowd: Yes. In general, we don't comment publicly on how individual brand owners are performing throughout the quarter. We leave it down to them to share their views on that one. But we can certainly see that there is quite a broad range of good products coming to the US. Some already come, as you mentioned. Some I think which are publicly announced to be coming later on this quarter and early into Q4. In general, we feel that all of these products are quite good quality, and we believe that there's certainly a strong position in each of the markets in the US market at this stage. So we believe that this is very much the onset of a new era for this market.

Speaker #1: But we can certainly see that there is quite a broad range of good products coming to the US; some have already arrived, as you mentioned.

Speaker #1: Some, I think, which are publicly announced, will be coming later on this quarter and early Q4. In general, we feel that all of these products are quite good quality, and we believe that there's certainly a strong position in each of the markets in the US market for them.

Speaker #1: At this stage, we believe that this is very much the onset of a new era for this market.

Speaker #3: Yeah, perfect. That's helpful. And just to follow up on that—would you say that the new flavor ranges are mostly bringing in incremental demand, or is it bigger baskets?

Christian Small: Yeah. Perfect. That's helpful. Just to follow up on that. Would you say that the new flavor ranges are mostly bringing in incremental demand, or is it bigger baskets? Or would you say it's more of the existing ZYN users switching over to their old flavors or formats? How would you describe this dynamic?

Christian Moe: Yeah. Perfect. That's helpful. Just to follow up on that. Would you say that the new flavor ranges are mostly bringing in incremental demand, or is it bigger baskets? Or would you say it's more of the existing ZYN users switching over to their old flavors or formats? How would you describe this dynamic?

Speaker #3: Or would you say it's more of the existing senior search switching over to their old flavors or formats? How would you describe this dynamic?

Speaker #1: I think you can see the consumers, and this is not unusual from our experience in other markets as new products are launched. Whether they are under the existing brand or under new brands—particularly for those which are coming under the existing brand—you will generally see consumers coming from quite a range of locations as regards to where those products are coming from, where those consumers are coming in from.

Gavin O'Dowd: I think you can see the consumers, and this is not unusual from our experience in other markets as new products are launched, whether they are under the existing brand or under new brands. But particularly for those which are coming under the existing brand, you will generally see consumers coming from quite a range of locations with regards to where those consumers are coming in from. Many of whom, and particularly for the earlier stages, you will get disproportionately large shares of trial versus repeat purchase as it comes through. What we're seeing from the new products that we've seen so far is that they are continuing with a directionally similar path to what we've seen historically in other markets as well.

Speaker #1: Many of whom, and particularly for the earlier stages, you will get disproportionately large shares of trial versus repeat purchase as it comes through. And what we're seeing from the new products that we've seen so far is that they are continuing with a similar direction—a similar path—to what we've seen historically in other markets as well.

Speaker #3: Yeah, perfect. And then finally, on marketing, could you say anything in terms of marketing relative to sales? What should we expect this ratio to look like through H2 here?

Christian Small: Yeah. Perfect. Then finally, on marketing, could you say anything in terms of marketing relative to sales? What should we expect this ratio to look like through H2 here?

Christian Moe: Yeah. Perfect. Then finally, on marketing, could you say anything in terms of marketing relative to sales? What should we expect this ratio to look like through H2 here?

Speaker #1: Yeah. So the way we're approaching this one, Christian, is very much on the principle of return on capital employed, rather than a set amount of money which will be spent.

Gavin O'Dowd: Yeah. The way we are approaching this one, Christian Small, is very much on the principle of return on capital employed rather than a set amount of money which will be spent. We have been testing quite a range of different marketing activities during Q1 and Q2. Some have been quite successful. Some will need to be either adapted or some have already been stopped. The way we are approaching this is that we set ourselves targets for different consumer segments as regards to how much we are prepared to pay to acquire that customer in certain channels while the window remains open and so long as we can see good return on that capital employed. We will allocate capital with a disciplined mindset towards it, rather than necessarily starting off with having a set target of how much we will spend.

Speaker #1: We have been testing quite a range of different marketing activities during Q1 and Q2. Some have been quite successful, while others will need to be either adapted, or have already been stopped.

Speaker #1: So, the way we are approaching this is that we set ourselves targets for different consumer segments as regards to how much we are prepared to pay to acquire that customer in certain channels.

Speaker #1: While the window remains open, and so long as we can see good return on that capital employed, we will allocate capital with a disciplined model and a disciplined mindset towards it.

Speaker #1: Rather than necessarily starting off with having a set target for how much we will spend.

Speaker #3: Yeah, makes sense. So, you said that there have been different measures of success in the marketing. Could you elaborate a bit on that? Which ones have you seen the most success with during the last quarters here?

Christian Small: Yeah, makes sense. You said that there has been different measures of success in the marketing. Could you elaborate a bit on that? Which ones have you seen are most successful during the two last quarters here?

Christian Moe: Yeah, makes sense. You said that there has been different measures of success in the marketing. Could you elaborate a bit on that? Which ones have you seen are most successful during the two last quarters here?

Speaker #1: I think what we have been finding is that some of the marketing activities, which were more hinging on generating awareness, were undoubtedly, as well as to be expected.

Gavin O'Dowd: I think what we have been finding is that some of the marketing activities which were more hinging on generating awareness were undoubtedly, as was to be expected, somewhat less successful than dealing more with consumers, which were much further down in the marketing funnel, and that they were already highly propensed to be buying the products and hence they were more susceptible towards coming to us. So we have seen much more dynamic on that. However, we feel as though there is still a range of opportunities across the funnel and we continue to adapt and develop each of those as they come through.

Speaker #1: Some had less success than dealing more with consumers who were much further down in the marketing funnel, and that they were already highly propensed to be buying the products, and hence they were more susceptible towards coming to us.

Speaker #1: So we've seen much more dynamism on that. However, we feel as though there's still a range of opportunities across the funnel, and we continue to adapt and develop each of those as they come through.

Speaker #1: But we've certainly seen, for those consumers with a high propensity, that they have been quite successful with the activity so far.

Christian Small: Okay, perfect.

Christian Moe: Okay, perfect.

Gavin O'Dowd: But we have certainly seen for those consumers which have a high propensity to be quite successful with the activity so far.

Speaker #3: Okay. Makes sense. Perfect. That was all from me. Thank you very much, guys.

Christian Small: Okay. Makes sense. Perfect. That was all from me. Thank you very much, guys.

Christian Moe: Okay. Makes sense. Perfect. That was all from me. Thank you very much, guys.

Speaker #1: Thank you, Christian.

Gavin O'Dowd: Thank you, Christian.

Speaker #2: As a reminder, if you wish to ask a question, please dial the pound key followed by five on your telephone keypad. The next question comes from Mariah Adesina from Barclays.

Operator 2: As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Mariah Adesina from Barclays. Please go ahead.

Operator: As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Mariah Adesina from Barclays. Please go ahead.

Speaker #2: Please go ahead.

Speaker #4: Hi, team. Thanks for taking my question, and congratulations on the solid results this evening. Just looking at growth markets, I can see that the average order value has declined a little bit year on year—around 8%.

Mariah Adesina: Hi, team. Thanks for taking my question and congratulations on the solid results this evening. Just looking at growth markets then, I can see that the average order value has declined a little bit year-on-year, around 8%. I am just wondering what is driving that decline. Is that due to promotional activity on prices, or is that because we have seen an increase in active consumers who maybe are just having their first or second purchase and so are not necessarily buying a lot of stock yet?

Morayo Adesina: Hi, team. Thanks for taking my question and congratulations on the solid results this evening. Just looking at growth markets then, I can see that the average order value has declined a little bit year-on-year, around 8%. I am just wondering what is driving that decline. Is that due to promotional activity on prices, or is that because we have seen an increase in active consumers who maybe are just having their first or second purchase and so are not necessarily buying a lot of stock yet?

Speaker #4: So I'm just wondering, what's driving that decline? Is that due to promotional activity on prices, or is that because we've seen an increase in active consumers who maybe are just having their first or second purchase, and so are not necessarily buying a lot of stock yet?

Speaker #1: Yeah. Good afternoon, Mariah. It is predominantly the second piece which we're seeing coming through here: an uptick in new consumer inflow tends to result in a downtick in average order size.

Gavin O'Dowd: Yeah. Good afternoon, Mariah. It is predominantly the second piece which we are seeing coming through here. An uptick in new consumer inflow tends to result in a downtick in average order size, as those consumers often start with very small orders to test the concept and see how it goes, and then those orders tend to increase to the second, third, and particularly fourth order, at which point in time they tend to become reasonably stable from there on in. So that is a main driving force within it.

Speaker #1: As those consumers often start with very small orders to test the concept and see how it goes. Then, those orders tend to increase with the second, third, and particularly fourth order.

Speaker #1: At which point in time, they tend to be becoming reasonably stable from there on in. So, that is the main driving force within it.

Speaker #4: Okay, thanks. That's clear. And then, just on the M&I business—the revenue increase—I'm guessing that's been driven largely by the influx of innovation within nicotine pouches.

Mariah Adesina: Okay, thanks. That is clear. And then just on the M&I business, the revenue increase, I am guessing that has been driven largely by the influx of innovation within nicotine pouches. Has that been largely driven just by ZYN Ultra, since that is the only new product launch that we have seen in the quarter, or is that also in anticipation of the other products that we have heard being announced to come later in the year?

Morayo Adesina: Okay, thanks. That is clear. And then just on the M&I business, the revenue increase, I am guessing that has been driven largely by the influx of innovation within nicotine pouches. Has that been largely driven just by ZYN Ultra, since that is the only new product launch that we have seen in the quarter, or is that also in anticipation of the other products that we have heard being announced to come later in the year?

Speaker #4: So, has that been largely driven just by Zin Ultra, since that's the only new product launch that we've seen in the quarter? Or is that also in anticipation of the other products that we've heard are being announced to come later in the year?

Speaker #1: No. Generally, for M&I, the vast majority of it tends to get locked down at the end of the previous calendar year. So, everybody gets the opportunity.

Gavin O'Dowd: No. Generally for M&I, the vast majority of it tends to get locked down at the end of the previous calendar year. Everybody gets the opportunity. Of course, then as the year adapts, somebody may wish to promote a different product if they have the flexibility to do so, that they did not expect to have at the beginning of the year. But the increase in M&I would say, is much more driven by the improvements that we made during 2025 into our M&I offers, which then were sold to the brand owners in the latter part of 2025 and are now manifesting throughout 2026. And I think what we can see here in Q2 is an example of that as it comes through.

Speaker #1: Of course, then as the year adapts, somebody may wish to promote a different product if they have the flexibility to do so that they didn't expect to have at the beginning of the year.

Speaker #1: But the increase in M&I, I would say, is much more driven by the improvements that we made during 2025 to our M&I offers, which were then sold to the brand owners in the latter part of 2025 and are now manifest throughout 2026.

Speaker #1: And I think what we can see here in Q2 is an example of that. As it comes through. And we generally see you may see some movement within this space from a quarter to quarter space within the year, but you generally notice the more notable upticks in it going from one calendar year into the next.

Mariah Adesina: Okay.

Morayo Adesina: Okay.

Gavin O'Dowd: You may see some movement within this space from a quarter-to-quarter space within the year, but you generally notice the more notable upticks in it going from one calendar year into the next.

Speaker #4: Sure. Makes sense. Thank you.

Mariah Adesina: Sure. Makes sense. Thank you.

Morayo Adesina: Sure. Makes sense. Thank you.

Speaker #1: Thank you very much.

Gavin O'Dowd: Thank you very much.

Speaker #2: The next question comes from Daniel Therian from Deutsche Bank. Please go ahead.

Operator 2: The next question comes from Daniel Tharian from Deutsche Bank. Please go ahead.

Operator: The next question comes from Daniel Tharian from Deutsche Bank. Please go ahead.

Speaker #5: Hi Gavin, Peter. Thanks for taking the questions. I have a few from me, just starting with the US market. As product availability broadens and you mentioned that the SKU count could double over the next year or so, how are you thinking about the role of the various websites you have?

Daniel Tharian: Hi, Gavin, Peter. Thanks for taking the questions. A few from me. Just starting with the US market. As product availability broadens, and you mentioned the SKU count could double over the next year or so, how are you thinking about the role of the various websites you have, not just in the US but also in other markets? Do you expect sites to become more differentiated around specific consumer cohorts or value propositions? Is that where your competitive advantage evolves on top of already the widest assortment and low prices?

Speaker #5: I guess not just in the US, but also in other markets. Do you expect sites to become more differentiated around specific consumer cohorts or value propositions?

Speaker #5: Is that where your competitive advantage evolves, on top of already having the widest assortment and low prices?

Speaker #1: Yes. So, Daniel, thank you for the question. When it comes to assortment in general, if a product is up to our standards—if we are comfortable with carrying the product and comfortable with the marketing plan which is going on with the product, and that it's all of the right standards and we know where it's coming from—we won't necessarily, we would very rarely, restrict such a product to a single site.

Gavin O'Dowd: Yes. Daniel, thank you for the question. When it comes to assortment, in general, if a product is up to our standards and we are comfortable with carrying the product and comfortable with the marketing plan which is going on on the product, and that it is all of the right standards and where it is coming from, very rarely would we restrict such a product to a single site. The differentiation when it comes to the consumer offer across the sites tends to hinge much less on the breadth of assortment and much more into the way that the consumer is buying the products from our sites. Whereas some sites may be leaning more towards, for example, reinforcing loyalty, as others perhaps reinforcing trial as it runs through within the site.

Speaker #1: So, the differentiation when it comes to the consumer offer across the sites tends to hinge much less on the breadth of assortment, and much more on the way that the consumer is buying the products from our sites.

Speaker #1: Whereas some sites may be leaning more towards, for example, reinforcing loyalty, others are perhaps reinforcing trial as it runs through within the site.

Speaker #5: Okay, makes sense. Thank you. And then, just going back to Saudi Arabia—I appreciate that it is too early to estimate any quantifiable amount for yourselves. But just about the actual market...

Daniel Tharian: Okay. Makes sense. Thank you. Just going back to Saudi Arabia, I appreciate it is too early to estimate any quantifiable amount for yourselves, but just about the actual market, do you have any idea as to the size or the proportion of volumes that currently go through the online channel or at least are being bulk purchased? Just thinking in comparison to Sweden, where that number, as shown in your slides, is about 36%, with bulk purchasing slightly higher.

Speaker #5: Do you have any ideas about the size or the proportional volumes that currently go through the online channel, or at least are being bulk purchased?

Speaker #5: Just thinking, in comparison to Sweden, where that number, as shown in your slides, is about 36%, with bulk purchasing slightly higher.

Speaker #1: Yeah, when it comes to Saudi Arabia, I don't think there's a significant share of the market going through online at this point in time.

Gavin O'Dowd: Yeah. When it comes to Saudi Arabia, I do not think there is a significant share of the market going through online at this point in time. There is a reasonable amount of it, I would say, going through what you could almost refer to as quick commerce, which is quite advanced in that part of the world. When it comes to bulk purchases, as opposed to with cigarettes, for example, where traditionally people tend to buy one pack at a time, there is already a behavior starting to manifest in the market, which we see in other markets as well, where the consumer is buying more than one, buying multiple units at the same time as they are purchasing.

Speaker #1: There is a reasonable amount of it, I would say, going through, which you could almost refer to as quick commerce, which is quite advanced in that part of the world.

Speaker #1: And then when it comes to bulk purchases, as opposed to with cigarettes, for example, where traditionally people tend to buy one pack at a time, there is already a behavior, certainly manifested in the market—which we see in other markets as well—where the consumer is buying more than one, buying multiple units at the same time as they're purchasing.

Speaker #1: So there is certainly a propensity within the consumer, there again, to store products for a period of time in the future, even if it is only for a few days at the moment.

Gavin O'Dowd: So there's certainly a propensity within the consumer there again, to store products for a period of time in the future, even if it is only for a few days at the moment. We think the dynamics that are there, the consumer behavior is not that hugely different to the consumer behavior that we were seeing here 10 years ago in Scandinavia or three to four years ago in the US or the UK, and has been starting to evolve since as well.

Speaker #1: So, we think the dynamics that are there—the consumer behavior—is not that hugely different from the consumer behavior that we were seeing here ten years ago in Scandinavia, or three to four years ago in the US or the UK, and has been starting to evolve since as well.

Speaker #5: Okay, makes sense. And then just lastly, on the coarseness segment, regarding the moderation, you mentioned that it's performing slightly better than you expected—that CMD. What are your updated long-term thoughts on how that category evolves in terms of: is this category still one that's in structural decline, but you are just increasing your share of wallet and doing better than the overall market?

Daniel Tharian: Okay. Makes sense. Then just lastly, on the Core snus segment. Regarding the moderation, you mentioned that it's performing slightly better than you expected at CMD. What are your updated long-term thoughts on how that category evolves in terms of, is this category still one that's in structural decline, but you are just increasing your share of wallet and doing better than the overall market? Or is the entire I appreciate you said it's been helped by an enhanced consumer offer, but are you slowing the decline rates at the same time as the overall market is improving?

Speaker #5: Or is the entire—I appreciate you said it's been helped by an enhanced consumer offer, but are you improving your—are you slowing the decline rates at the same time as the overall market is improving?

Speaker #1: Yeah, so I think on this one, it's important to lay out that Snooze is, in our opinion, in structural decline in the Scandinavian markets.

Gavin O'Dowd: Well, I think on this one, I think it's important to lay out that snus is, in our opinion, in structural decline in the Scandinavian markets, and hence why the snus category is not a strategically important category for us. I think it's important to look at the reduction in the snus performance, sorry, the reduction in the snus decline rates so that we are now taking market share, is not being done with us to develop a strategically stronger position within the snus. That is more of a byproduct within it. The objective here was to have compelling offers on snus for many of the families within Sweden, whereby there was dual users within the house, one which was using snus and one which was using traditional snus, and one which was using nicotine pouches.

Speaker #1: And hence why the Snooze category is not as strategically important a category for us. I think it's important to look at the reduction in the Snooze performance—sorry, the reduction in the Snooze decline rates.

Speaker #1: So, that we are now taking market share has not been done with us to develop a strategically stronger position within the snooze. That is more of a byproduct within it.

Speaker #1: The objective here was to have compelling offers on Snooze for many of the families within Sweden, whereby there were dual users within the house.

Speaker #1: One which was using snus, and one which was using traditional snus, and one which was using nicotine patches. And that we would have a sufficiently compelling offer for the household purchases there, in order to gain that nicotine pouch consumer onto our platform.

Gavin O'Dowd: And that we would have a sufficiently compelling offer for the household purchasers there in order to gain that nicotine pouch consumer onto our platform. As a side effect of that, we have seen that we've gone from declining in line with or perhaps even ahead of, in some cases, for a quarter or two last year of the market share. We've now gone to a stage where we are actually taking market share in the traditional snus market.

Speaker #1: And as a side effect of that, we have seen that we've gone from declining in line with, or perhaps even ahead of in some cases for a quarter or two last year, the market share.

Speaker #1: We've now reached a stage where we are actually taking market share in the traditional snus market.

Speaker #5: Okay, understood. And just for some clarification, this enhanced consumer offer—is this something like, buy a can of nicotine pouches, Snooze, get 10% off or something like that?

Daniel Tharian: Okay. Understood. Just for some clarification, this enhanced consumer offer, is this something like buy a can of nicotine pouches, snus, 10% off or something like that? Or is it just the way it is laid out on the website?

Speaker #5: Or is it just the way it's laid out on the website?

Speaker #1: It's just more the way it's laid out on the website and the general pricing for Snooze in our store. You would be somewhat restricted from doing an offer like that, due to regulation within Sweden.

Gavin O'Dowd: It is just more the way it is laid out on the website and the general pricing for snus on our store. You would be somewhat restricted from doing an offer like that with regulation within Sweden.

Speaker #5: Understood. Okay. Thank you.

Daniel Tharian: Understood. Okay. Thank you.

Speaker #3: There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Operator 2: There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Operator: There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Speaker #1: There don't appear to be any written questions coming through either. So, with that, I thank you all very much for your time, and I look forward to updating you in three months again on our Q3 performance.

Gavin O'Dowd: There don't appear to be any written questions coming through either. With that, I thank you all very much for your time and look forward to updating you in three months again on our Q3 performance. Thank you very much.

Speaker #1: Thank you very much. Thank you, everyone.

Peter Deli: Thank you, everyone.

Operator 2: The host has ended this call. Goodbye.

Operator: The host has ended this call. Goodbye.

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Q2 2026 Haypp Group AB Earnings Call

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