H & M Hennes & Mauritz AB Three-month report

First quarter (1 December 2021 – 28 February 2022)

• The H&M group’s net sales in local currencies increased by 18 percent in the first quarter. Converted into SEK the group’s net sales increased by 23 percent to SEK 49,166 m (40,060).
• Well-received collections led to a higher share of full-price sales and lower costs for markdowns. At the same time, sales and profits for the quarter were impacted by the negative effects of the pandemic in many of the group’s major markets. The result was also affected by increased growth-related initiatives, particularly within tech and the supply chain.
• Gross profit increased to SEK 24,260 m (19,057). This corresponds to a gross margin of 49.3 percent (47.6).
• Operating profit increased to SEK 458 m (-1,128), corresponding to an operating margin of 0.9 percent (-2.8). For rolling 12 months the operating margin was 8.1 percent (-0.4).
• The group’s profit after tax increased to SEK 217 m (-1,070), corresponding to SEK 0.13 (-0.65) per share.
• Cash flow from operating activities amounted to SEK 3,624 m (5,936).
• Financial net cash increased to SEK 17,446 m (2,199). Cash and cash equivalents plus undrawn credit facilities amounted to SEK 42,848 m (42,432).
   

• The H&M group has paused all sales in Russia, Belarus and Ukraine. In total 185 stores as well as online sales in Russia are affected.
• Net sales in the period 1-28 March 2022 increased by 6 percent in local currencies compared with the corresponding period last year. Excluding Russia, Belarus and Ukraine the increase was 11 percent.
• H&M continues to expand into more markets. In March the first H&M store in Cambodia was successfully opened via franchise. Further new H&M markets in 2022 will be Ecuador, Kosovo and North Macedonia, and via franchise Costa Rica and Guatemala. In 2023 H&M plans to open its first store in Albania.
• The H&M group is integrating its annual and sustainability report, which is published today. The report presents our further strengthened climate goals, a threefold increase in the use of recycled materials and a substantial decrease in the use of plastic packaging.
• The annual general meeting will be held on 4 May 2022 to resolve, among other things, on the board’s proposed dividend of SEK 6.50 per share, to be paid in two instalments, and the authorisation to buy back shares for cancellation for a total amount of SEK 3 billion.

“We are deeply concerned about the war in Ukraine and are following developments closely. We stand with all those around the world who are calling for peace. Once again, we have to be flexible and act quickly as circumstances change. H&M Group, H&M Foundation and the Erling-Persson Foundation have to date donated around SEK 170 m as well as clothes and other necessities to organisations including UNHCR, Save the Children, the Red Cross and UNICEF,” says Helena Helmersson, CEO.

Comments by Helena Helmersson, CEO

“Having ended last year with sales back at the same level as before the pandemic and in a strong financial position, we started the new year with increased initiatives to create an even better foundation for long-term growth. The initiatives mainly involve continuing to develop the customer experience by, for example, further broadening the assortment and integrating the sales channels, and by continuing to invest in infrastructure such as tech and the supply chain, but also in renewable energy and sustainable materials.

In addition to the general consequences of the pandemic such as disruptions and delays in the supply chain, some of our major markets were impacted by a new wave of the pandemic in the first quarter. Despite this we saw a recovery of sales in physical stores compared with last year, while online sales continued to perform well. This shows the value of having both physical and digital channels which strengthen and complement each other. Well-received collections led to full-price sales continuing to increase which led to more than expected decrease of markdowns.

We are deeply concerned about the war in Ukraine and sympathise with all those affected. We closed our stores in Ukraine for the safety of our colleagues. Since the beginning of March all sales have also been paused in Russia and Belarus. H&M Group, the H&M Foundation and the Erling-Persson Foundation have so far donated around SEK 170 m as well as clothes and other necessities to organisations including UNHCR, Save the Children, the Red Cross and UNICEF. The H&M group cares about all our colleagues and stands with all those around the world who are calling for peace.

Other than effects associated with the paused sales in Russia, Belarus and Ukraine, the group’s other plans remain in place. Our flexibility is good, which enables us to act quickly as circumstances change in the world around us. We have a well-positioned customer offering and are fully focused on meeting customers’ ever-increasing expectations of affordable and sustainable fashion.

The H&M group is taking further steps towards offering customers more sustainable products. We are integrating our annual and sustainability report, which is published today and shows, among other things, that we have tripled our use of recycled materials and further strengthened our ambitious climate goals. Read more about that and our sustainability work at hmgroup.com.”

Communication in conjunction with the three-month report

The three-month report, i.e. 1 December 2021 – 28 February 2022, will be published at 08:00 CEST on 31 March 2022, followed by a telephone conference at 09:00 CEST for the financial market and media. The telephone conference will be held in English, hosted by CEO Helena Helmersson, CFO Adam Karlsson and Head of IR Nils Vinge.

For log in details for the telephone conference please register at hmgroup.com or via this link: http://emea.directeventreg.com/registration/3588167.

To book interviews in conjunction with the three-month report on 31 March 2022, please contact: Kristina Stenvinkel, telephone: +46 70 796 54 40, stenvinkel@hm.com or
Iñigo Sáenz Maestre, Head of Media Relations, telephone +46 72 980 53 52, inigo.saenz@hm.com.

Contact

Nils Vinge, Head of IR                       +46 8 796 52 50
Helena Helmersson, CEO                  +46 8 796 55 00 (switchboard)
Adam Karlsson, CFO                         +46 8 796 55 00 (switchboard)

H & M Hennes & Mauritz AB (publ)
SE-106 38 Stockholm
Phone: +46-8-796 55 00, e-mail: info@hm.com
Registered office: Stockholm, Reg. No. 556042-7220

For more information about the H&M group visit hmgroup.com.

Information in this interim report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014. The information was submitted for publication by the abovementioned persons at 08:00 (CET) on 31 March 2022. This interim report and other information about the H&M group, is available at hmgroup.com.

H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm. H&M’s business idea is to offer fashion and quality at the best price in a sustainable way. In addition to H&M, the group includes the brands COS, Monki, Weekday, & Other Stories, H&M HOME and ARKET as well as Afound. For further information, visit hmgroup.com.

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