Between April and June, turnover reached SEK 1.2 billion, an increase of 28 percent compared to the same period last year. However, operating profit decreased by 13.5 percent to SEK 9 million, compared to SEK 10.4 million the year before.
During the quarter, the company handled a total of 1.4 million orders from 667,000 active customers.
Expanding Logistics in Europe
Turnover increased rapidly in the growth markets segment, which includes the USA and the United Kingdom. To manage the volumes and shorten delivery times for consumers, the company recently commissioned a new automated warehouse north of London.
The company has also opened its own warehouse in Switzerland, enabling it to offer next-day delivery to large parts of the country.
Our focus on the USA and the United Kingdom is paying off with a volume in the second quarter in both markets that is up over 100 percent year-on-year, says CEO Gavin O'Dowd.
In the group's core markets, consisting of Sweden and Norway, the number of active customers increased by 9 percent. Within these countries, the company operates subscription services, primarily for traditional snus, which is a growing area.
New Markets and Loyalty Programs
The decline in operating profit is largely explained by increased costs for marketing, administration and personnel, primarily related to the expansion in the USA and the United Kingdom. In the USA, the company has introduced a revised loyalty and referral program, and redirected its marketing resources to focus on consumers with a clear purchase intention.
As part of finding new growth areas, Haypp also launched its e-commerce platform in Saudi Arabia in July, a market described as the world's second largest for nicotine pouches.
The Group’s business model is perfectly suited for success in this more dynamic environment, says Gavin O'Dowd.