The board of directors of Haypp Group, supported by the Major Shareholders[1] (as defined below), consider the Offering and Listing of the Company’s shares to be a logical and important step to strengthen Haypp Group’s global e-commerce store brands and presence. The board of directors of Haypp Group assesses that a listing on Nasdaq First North Growth Market will increase the awareness of the Company and its products, strengthen Haypp Group’s profile vis-à-vis customers and suppliers and strengthen its ability to attract and retain key personnel and other qualified employees. Further, the Listing will support the Company’s continued growth and provide Haypp Group with access to the capital markets, as well as a diversified base of Swedish and international investors. For these reasons, the board of directors of Haypp Group has applied for listing on Nasdaq First North Growth Market. Nasdaq Stockholm has made the assessment that the Company fulfils the applicable listing requirements on Nasdaq First North Growth Market, provided that certain customary conditions are fulfilled. The Offering is expected to consist of both new shares issued by Haypp and of existing shares in the Company offered by the Major Shareholders.

Gavin O’Dowd, CEO of Haypp Group since 2017:
“We contribute to society by inspiring people to choose healthier enjoyment. We believe that knowledgeable and enlightened people will always choose reduced-risk nicotine products, and one of the specific market dynamics that support our business and continued growth opportunities are an underlying demand for harm reduced products of which nicotine pouches is the fastest growing category. We will continue to prioritize growth over profitability and are well-positioned to contribute to the large and global market with significant growth over the coming years.”

Ingrid Jonasson Blank, Chairman Haypp Group, comments:
“The market for nicotine pouches is currently experiencing a pronounced shift away from combustible tobacco products such as cigarettes to smokeless products such as snus and tobacco-free nicotine pouches as well as a shift from offline to online sales. With origins in Scandinavia our extensive experience from pioneering markets in smoke free alternatives, as well as being a leader in the e-commerce sector, we now take our vision further. The board of directors considers a potential listing as a logical and important step to strengthen Haypp Group’s global e-commerce store brands and presence. Furthermore, it will increase the awareness of our products and strengthen the profile vis-à-vis customers and suppliers as well as attract qualified employees.”

The Offering in brief
Should the Company choose to proceed with the Listing, the Offering is expected to comprise of:

• An offering to the general public in Sweden and Norway
• An offering to institutional investors in Sweden and abroad

The Offering is expected to comprise of existing shares in the Company offered by the Major Shareholders and new shares issued by the Company, where the latter is expected to raise proceeds to the Company of SEK 150 million. The net proceeds from the Offering will be used to repay outstanding bank debt and shareholder loans as well as partly repay the Company's overdraft facility and thereby strengthen Haypp Group’s financial flexibility to act on potential M&A opportunities and carry out strategic growth investments.

In connection with the Offering, all shareholders in the Company, including board members and members of the executive management have been offered to sell shares in the Offering, including shares that are issued by exercise of outstanding warrants in the Company.

Erik Selin[2] has, subject to certain conditions, undertaken to acquire shares in the Offering for an amount of SEK 66 million at a valuation corresponding to a market value for the outstanding shares in the Company of approximately SEK 1.9bn, including proceeds raised in the Offering. In addition, a strong group of anchor investors, including reputable international institutional investors, have also committed to, subject to certain conditions, subscribe for shares in the Offering at the same valuation.

Complete terms, conditions and instructions for the Offering will be included in the prospectus that the Company intends to prepare in connection with the Listing. If the Company decides to proceed with the Listing, the prospectus will be published on the Company's website, www.hayppgroup.com. More information about the process will be published on an ongoing basis.

Haypp in brief
The Haypp Group is spearheading the global transformation from smoking to risk-reduced product alternatives. With origins in Scandinavia, our extensive experience from pioneering markets in smoke free alternatives, as well as being a leader in the e-commerce sector, is now bringing our vision to a global scale. With ten e-commerce store brands, the Haypp Group is present in nine countries where we served more than 500,000 consumers during 2020.

Strengths and competitive advantages
Haypp Group considers itself having a number of strengths and competitive advantages that contribute to the Company’s ability to realize strategic objectives and reach financial targets:

• First-mover in a market undergoing structural shift to reduced-risk nicotine products with strong momentum for online sales
• Haypp Group is a leading e-commerce player – with an outstanding value proposition and a loyal customer base
• Unique offering to suppliers through Haypp Group’s bespoke tech platform – enabling unmatched marketing capabilities and customer insights
• Extensive experience of navigating and influencing the complex regulatory waters
• Track-record of strong growth resulting in economies of scale
• Management team with extensive experience within e-commerce and tobacco

Financial overview

Financial targets and dividend policy
The Board of Directors has adopted the following financial targets for the medium to long term.

• Growth: Haypp Group targets to reach net sales of at least SEK 5bn by 2025, predominantly through organic growth
• Profitability: Haypp Group will prioritise growth over profitability and targets to reach a high single digit adjusted EBIT margin in the medium term to long term
• Dividend policy: In the upcoming years, the board of Haypp Group will primarily use the generated cash flows for the Company’s continued expansion

Haypp Group's financial targets stated above constitute forward-looking information. The financial targets are based upon a number of estimates and assumptions relating to, among others, the development of Haypp Group’s industry, business, result of operations and financial position, and are subject to risks and uncertainties. The executive management team’s key assumptions underpinning the financial targets set out above will be described further in the prospectus expected to be published by the Company.

Advisors
Skandinaviska Enskilda Banken AB (publ) (“SEB”) and Carnegie Investment Bank AB (publ) (“Carnegie”) are Joint Global Coordinators and Joint Bookrunners. Advokatfirman Vinge is legal advisor to the Company. Advokatfirman Hammarskiöld & Co is legal advisor to SEB and Carnegie.

For more information and contact
Markus Lindblad
Head of External Affairs:
+46(0)708153983
markus.lindblad@hayppgroup.com

This information was submitted for publication, through the agency of the contact person set out above, at 8:00 CEST on 28 September 2021.

IMPORTANT INFORMATION
This announcement is not an offer to sell or a solicitation of any offer to buy any securities issued by Haypp Group AB (the "Company") in any jurisdiction where such offer or sale would be unlawful. The distribution of this announcement and other information relating to the Offering may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

In any EEA Member State, other than Sweden and Norway, that has implemented the (EU) Regulation 2017/1129 (the “Prospectus Regulation”) and in the United Kingdom, this communication is only addressed to and is only directed at qualified investors in that Member State and in the United Kingdom within the meaning of the Prospectus Regulation and the Prospectus Regulation as it forms part of UK domestic law by virtue of the UK European Union (Withdrawal) Act 2018 (as amended and supplemented from time to time) (the "UK Prospectus Regulation"), respectively.

Neither this advertisement nor the publication in which it is contained is for publication or distribution, directly or indirectly, in whole or in part, in or into the United States of America, including its territories and possessions, any state of the United States and the District of Columbia (the “United States”). The information in this advertisement does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in the Company in any jurisdiction. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or transferred, directly or indirectly, in or into the United States absent exemption from, or in a transaction not subject to, the registration requirements of the Securities Act (as defined in Regulation S under the Securities Act (“Regulation S”)). The securities are being offered and sold outside the United States in reliance on Regulation S and within the United States to “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act (“Rule 144A”)) in reliance on Rule 144A. Prospective purchasers are hereby notified that sellers of the Securities may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States.

In the United Kingdom, this document and any other materials in relation to the securities described herein are only being distributed to, and are only directed at, and any investment or investment activity to which this document or such other materials relate is available only to, and will be engaged in only with, “qualified investors” (as defined in section 2(e) of the UK Prospectus Regulation) who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Persons who are not relevant persons should not take any action on the basis of this document and should not act or rely on it.
This advertisement may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

[1] GR8 Ventures AB, Eastcoast Capital AB, Northerner Holding AB, e-Business Partner Norden AB, Gavin O'Dowd, and Kbay Capital AB.
[2] Through Förvaltnings AB Färgax.
[3] Unaudited.
[4] Unaudited.