H&M Hennes & Mauritz

Quarterly Report • Apr 6, 2016

H & M Hennes & Mauritz AB

Three-month report

First quarter (1 December 2015 — ²⁹ February 2016)

• The H&M group's sales including VAT increased by 9 percent in local currencies in the first quarter. Converted into SEK, sales including VAT increased by 8 percent to SEK 50,624 m (46,791). Sales excluding VAT amounted to SEK 43,691 m (40,276).
• Gross profit amounted to SEK 22,699 m (22,213). This corresponds to a gross margin of 52.0 percent (55.2).
• Profit after financial items amounted to SEK 3,327 m (4,723). The group's profit after tax amounted to SEK 2,545 m (3,613), corresponding to SEK 1.54 (2.18) per share. Profits in the quarter were negatively affected by substantially higher purchasing costs due to the strengthened US dollar and by increased markdowns.
• Very satisfactory sales and profit development for H&M's e-commerce.
• As of 31 March 2016 H&M offers e-commerce in an additional seven countries: Croatia, Estonia, Ireland, Latvia, Lithuania, Luxembourg and Slovenia. Very soon H&M will launch e-commerce in Japan and later in the year also in Greece, Canada and South Korea. A total of 11 H&M online markets will thus be added in 2016 which means that H&M will offer e-commerce in 34 markets by the end of the year.
• The H&M group's sales including VAT in March 2016 increased by 2 percent in local currencies compared to the corresponding month the previous year. Total sales in March, April and May should be seen together, since Easter and weather effects during this period affect the comparability of an individual month.
• The H&M group plans a net addition of around 425 new stores for the 2015/2016 financial year. Most of the expansion will take place in existing markets. New Zealand, Cyprus and Puerto Rico are planned to become new H&M markets.
• The group's store number 4,000 will open in April, in Mall of India in New Delhi.

	Q1	Q1
SEK m	2016	2015
Net sales	43,691	40,276
Gross profit	22,699	22,213
gross margin, %	52.0	55.2
Operating profit	3,270	4,637
operating margin, %	7.5	11.5
Net financial items	57	86
Profit after financial items	3,327	4,723
Tax	-782	-1,110
Profit for the period	2,545	3,613
Earnings per share, SEK	1.54	2.18

+9% Sales increase in local currencies

3,970 stores in 61 markets

H&M Conscious Exclusive

Comments by Karl-Johan Persson, CEO

"Sales including VAT in the first quarter amounted to almost SEK 51 billion and profit before tax to just over SEK 3.3 billion. In local currencies, sales increased by 9 percent, which was slightly below plan. This should be seen in the light of a very good first quarter last year when sales increased by 15 percent in local currencies and profits in SEK increased by 35 percent.

Profits in this year's first quarter have been negatively affected by a continued very negative US-dollar effect which made our purchasing much more expensive, as well as by increased markdowns due to larger volumes of winter garments that remained as a result of the warm autumn. The negative dollar effect continues for purchases made for the second quarter 2016, although the negative effect has begun to gradually decrease due to the start of the annualisation of last year's strong US-dollar exchange rate. Should today's exchange rates continue, the effect of the US dollar on purchasing costs for the fourth quarter will be neutral or slightly positive compared to the corresponding quarter the previous year.

Our strong expansion continues, we are gaining market share and we are confident that we can grow at a fast pace both through stores and online, in existing as well as in new markets, for many years to come. The spring will bring many store openings, for example the opening of flagship stores in South Africa, Switzerland, Hungary and India. Since 2010 we have doubled the number of stores in the group, and this April we will pass another milestone when store number 4,000 opens. The store will open in Mall of India, New Delhi – in India, where H&M has had a very good reception since the first stores opened last year.

For the past few years we have been in an intensive period of investments related to new brands and concepts, as well as IT and online. Among other things, these investments have enabled a fast roll-out of H&M's very profitable e-commerce to further markets. This year alone we will add 11 new H&M online markets: Ireland, Croatia, Slovenia, Estonia, Latvia, Lithuania, Luxembourg, Japan, Greece, Canada and South Korea, which means that H&M will offer e-commerce in a total of 34 markets by the end of the year and preparations are under way for a continued roll-out into all markets in the group.

Another important part of our long-term work on further strengthening the group's future market position is our ability to offer customers a wider selection of brands with different identities. Our new brands - COS, & Other Stories, Monki, Weekday och Cheap Monday - represent an increasingly important part of the group and we are looking forward to launching more new brands further ahead.

We are also continuing our ambitious work on sustainability, which is an integral part of our customer offering. Tomorrow, on 7 April, this year's edition of the muchappreciated "H&M Conscious Exclusive" collection will be launched in around 180 selected stores and online. If you want to know more about our sustainability work, our sustainability report "H&M Conscious Actions Sustainability Report 2015" will be available on hm.com as of 14 April."

H&M's sustainability report 2015

"Since 2010 we have doubled the number of stores. This April we will open store no. 4,000 in the group. The store will open in Mall of India, New Delhi."

Sales

With continued strong expansion, the H&M group continued to gain market share in a fashion retail market that in many countries was still characterised by a challenging macroeconomic situation.

Sales including VAT converted into SEK increased by 8 percent to SEK 50,624 m (46,791) in the first quarter.

Sales excluding VAT increased by 8 percent to SEK 43,691 m (40,276) in the first quarter.

In local currencies sales including VAT increased by 9 percent.

Sales development in the first quarter 2016 should be seen in the light of the sales development in Q1 last year, which was very good with a sales increase of 15 percent in local currencies and 25 percent in SEK. Since the Swedish krona strengthened in the first quarter 2016 against most sales currencies in the group compared to the same period last year, the positive currency translation effect last year turned around to become slightly negative in the first quarter 2016.

Currency translation effects arise when sales and profits in local currencies are translated into the company's reporting currency, which is SEK. A positive currency translation effect arises when the Swedish krona weakens and a negative currency translation effect arises when the Swedish krona strengthens.

Sales in top ten markets, first quarter

	Q1 - 2016	Q1 - 2015	Change in %		29 Feb - 16	Q1 - 2016
	SEK m	SEK m	SEK	Local	Number of	New stores
	inc. VAT	inc. VAT		currency	stores	(net)
Germany	8,661	8,671	0	1	447	-2
USA	6,377	5,422	18	11	426	11
UK	3,546	3,486	2	1	265	1
France	3,206	3,182	1	2	223	1
Sweden	2,324	2,147	8	8	175	-1
China	2,301	2,148	7	6	365	12
Italy	2,062	1,887	9	11	151	1
Spain	1,831	1,816	1	2	166	1
Netherlands	1,737	1,692	3	4	139	0
Switzerland	1,492	1,585	-6	-6	96	0
Others*	17,087	14,755	16	19	1,517	22
Total	50,624	46,791	8	9	3,970	46
* Of which franchises	1,228	991	24	10	161	5

H&M Sport

Gross profit and gross margin

H&M's gross profit and gross margin are a result of many different factors, internal as well as external, and are also affected by the decisions that H&M takes in line with its strategy to always have the best customer offering in each individual market – based on the combination of fashion, quality, price and sustainability.

H&M Conscious Exclusive

Gross profit increased to SEK 22,699 m (22,213) in the first quarter, corresponding to a gross margin of 52.0 percent (55.2).

Markdowns in relation to sales increased by 1.4 percentage points in the first quarter 2016 compared to the corresponding quarter in 2015. The increase compared to the same quarter last year is mainly explained by the ingoing stock-in-trade that contained a larger volume of winter garments as a result of the warm autumn.

Overall, the market situation as regards external factors such as cost inflation and purchasing currencies continued to be very negative during the purchasing period for the first quarter compared to the corresponding purchasing period in the previous year, mostly due to the impact of the stronger US dollar on purchasing costs.

The negative US-dollar effect continues for purchases made for the second quarter 2016, although the negative effect has begun to gradually decrease due to the start of the annualisation of last year's strong US-dollar exchange rate. If today's exchange rates will continue, the effect of the US dollar on purchasing costs for the fourth quarter will be neutral or slightly positive compared to the corresponding quarter the previous year.

Selling and administrative expenses

Cost control in the group remains good. For the first quarter of 2016, selling and administrative expenses increased by 11 percent in SEK as well as in local currencies compared to the first quarter last year. The increase is mainly due to the expansion and the long-term investments within IT and online, and to the broadening of the product range.

Modern Essentials selected by David Beckham

Profit after financial items

Profit after financial items in the first quarter amounted to SEK 3,327 m (4,723), a decrease of 30 percent.

The profit development in the first quarter is mostly explained by higher purchasing costs due to the strong US dollar, increased markdowns and the fact that sales development was slightly below plan.

Costs for long-term investments increased in the first quarter by more than SEK 100 m compared to the corresponding quarter the previous year. These long-term investments aim to further strengthen the H&M group's market position and secure future expansion. The investments are continuing and in absolute terms are expected to increase in 2016 by the same amount as in 2015, i.e. an increase of approximately SEK 600 m. The costs of these investments may be divided unequally between the quarters.

Stock-in-trade

Stock-in-trade amounted to SEK 25,153 m (20,266), an increase of 24 percent in SEK and 25 percent in local currencies compared to the same time the previous year.

The increase in the stock-in-trade is mainly due to the strengthening of the US dollar which affected purchasing costs and thus the value of the stock - and to the group's expansion through stores and online, but also to the fact that sales in the quarter were slightly below plan. The increase is also related to a bookkeeping effect of just above SEK 1 billion associated with the previously communicated change in the administrative process surrounding invoice management for the H&M group's goods purchasing. Apart from these factors, the level and the composition of the stock-in-trade are deemed to be satisfactory.

The stock-in-trade amounted to 13.6 percent (12.7) of sales excluding VAT rolling twelve months and 28.5 percent (24.5) of total assets.

Expansion

The H&M group remains positive as regards future expansion and the group's business opportunities. The strong expansion continues both through stores and online.

The group's growth target remains intact. The aim is to increase the number of stores by 10–15 percent per year with continued high profitability.

For full-year 2016 the group plans a net addition of around 425 new stores, with most of the expansion taking place in existing markets. China and the US will once again be the markets with the most new stores. The group's store number 4,000 will open in April, in Mall of India in New Delhi. Three new store markets are planned for 2016: New Zealand, Cyprus and Puerto Rico, which means that by the end of the financial year H&M will be present in 64 markets.

H&M stores represent the largest part of the group's planned net addition of 425 new stores. Of the group's other brands – COS, Monki, Weekday, & Other Stories and Cheap Monday – the main focus of expansion in 2016 will be on COS, which will open most of its new stores in existing markets but will also open stores in five new markets: the Czech Republic (which opened in the first quarter 2016), to be followed later in the year by Romania, Latvia, Malaysia and Saudi Arabia (via franchise). & Other Stories, Monki and Weekday will also grow by opening stores in both new and existing markets. For example, & Other Stories will open its first store in Ireland, while Monki and Weekday will open in Austria. H&M Home will also continue its rapid expansion, with around 60 new H&M Home departments.

As of 31 March 2016 H&M now also offers e-commerce in Ireland, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg. Very soon H&M will also launch e-commerce in Japan and later in the year also in Greece, Canada and South Korea. A total of 11 H&M online markets will thus be added in 2016 which means that H&M will offer e-commerce in 34 markets by the end of the year.

H&M Beauty has got off to a very good start since its launch began in July 2015. At the end of the first quarter H&M Beauty was available in almost 1,000 stores in 45 H&M markets, as well as at hm.com. H&M Beauty is a new and broad concept for make-up, body care and hair styling which offers high quality value-for-money products in a specially produced design. The rollout of H&M Beauty – which replaces H&M's current cosmetics – in both new and existing markets will continue during 2016. The plan is to add H&M Beauty into a further 275 H&M stores during 2016.

H&M Home

Store count by brand

In the first quarter, the group opened 59 (50) stores and closed 13 (10) stores, i.e. a net increase of 46 (40) new stores. The group had 3,970 (3,551) stores as of 29 February 2016, of which 161 were franchise stores.

	New Stores (Net)	Total No of stores
Brand	Q1 - 2016	29 Feb - 2016	28 Feb - 2015
H&M	40	3,650	3,295
COS	6	159	117
Monki	0	106	93
Weekday	-1	19	21
& Other Stories	1	31	20
Cheap Monday	0	5	5
Total	46	3,970	3,551

COS

Store count by region

	New Stores (Net)	Total No of stores
Region	Q1 - 2016	29 Feb - 2016	28 Feb - 2015
Europe & Africa	10	2,724	2,560
Asia & Oceania	25	720	544
North & South America	11	526	447
Total	46	3,970	3,551

Tax

The H&M group's tax rate is expected to be approximately 22.5 – 23.5 percent for the 2015/2016 financial year. In the first quarter an estimated tax rate of 23.5 percent has been used which will also be used for the second and third quarter. The final outcome of the tax rate depends on the results of the group's various companies and the corporate tax rates in each country.

Current quarter

Sales including VAT in March increased by 2 percent in local currencies. Sales in March, April and May should be viewed together because the Easter holiday falls in different months in different years, and partly also because the weather during this period can vary greatly from year to year. For H&M in general, a late Easter is better than an early Easter. Weather conditions in March last year were favourable for the season, while the opposite is true this year.

Accounting principles

The group applies International Financial Reporting Standards (IFRS) as adopted by the EU. This report has been prepared according to IAS 34 Interim Financial Reporting as well as the Swedish Annual Accounts Act.

The accounting principles and calculation methods applied in this report are unchanged from those used in the preparation of the annual report and consolidated financial statements for 2014/2015 which are described in Note 1 – Accounting principles.

H & M Hennes & Mauritz AB's financial instruments consist of accounts receivable, other receivables, cash and cash equivalents, accounts payable, accrued trade payables, interest-bearing securities and currency derivatives. Currency derivatives are measured at fair value based on input data corresponding to level 2 of IFRS 13. Other financial assets and liabilities have short terms. It is therefore judged that the fair values of these financial instruments are approximately equal to their book values.

The parent company applies the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities, which essentially involves applying IFRS. In accordance with RFR 2, the parent company does not apply IAS 39 to the measurement of financial instruments; nor does it capitalise development expenditure.

For definitions see the Annual Report.

Risks and uncertainties

A number of factors may affect H&M's results and business. Many of these can be dealt with through internal routines, while certain others are affected more by external influences. There are risks and uncertainties related to fashion, weather conditions, negative macroeconomic changes, geopolitical risks, sustainability and external factors in production countries, trade interventions, foreign currency and tax but also in connection with expansion into new markets, the launch of new concepts, changes in consumer behaviour and how the brand is managed. There are also some risks related to the group's reputation, so called "reputational risks".

For a more detailed description of risks and uncertainties, refer to the administration report and to note 2 in the annual report and consolidated accounts for 2015.

Calendar

3 May, 2016, at 3 p.m.	Annual General Meeting 2016, Erling Persson Hall, Aula Medica, Karolinska Institutet in Solna
22 June, 2016	Six-month report, 1 Dec 2015 – 31 May 2016
30 September, 2016	Nine-month report, 1 Dec 2015 – 31 August 2016
31 January, 2017	Full-year report, 1 Dec 2015 – 30 November 2016

This three-month report has not been audited by the company's auditors.

Stockholm, 5 April 2016 Board of Directors

The information in this interim report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under Sweden's Securities Market Act. It will be released for publication at 8.00 (CET) on 6 April 2016. This interim report and other information about H&M, is available at www.hm.com

H&M Kids

Contact

As previously communicated, press and telephone conferences will no longer be held in conjunction with the releases of the Q1 and Q3 reports. In order to avoid any phone queues when the reports are published, it will be possible for the financial market and media to call Nils Vinge, Head of Investor Relations, and ask questions during an open call between 09.00 - 10.00 CET on these report dates.

For log in details to the call on 6 April, please register at hm.com, investor relations, the calendar, three-month report 2016. This phone conversation will be held in English.

After 10.00 CET Nils Vinge will be available on +46 (8) 796 52 50 or via email: nils.vinge@hm.com

To book an interview please contact Kristina Stenvinkel, Head of Communications +46 (8) -796 39 08 stenvinkel@hm.com

For other matters please contact the Communications and Press Department: +46 (8) -796 53 00 mediarelations@hm.com

H & M Hennes & Mauritz AB (publ) SE-106 38 Stockholm Phone: +46-8-796 55 00, Fax: +46-8-24 80 78, E-mail: info@hm.com Registered office: Stockholm, Reg. No. 556042-7220

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, Cheap Monday, & Other Stories as well as H&M Home. The H&M group has more than 3,900 stores in 61 markets including franchise markets. In 2015, sales including VAT amounted to SEK 210 billion and the number of employees was more than 148,000. For further information, visit www.hm.com.

GROUP INCOME STATEMENT (SEK m)

	Q1	Q1	1 Dec 2014-
	2016	2015	30 Nov 2015
Sales including VAT	50,624	46,791	209,921
Sales excluding VAT	43,691	40,276	180,861
Cost of goods sold	-20,992	-18,063	-77,694
GROSS PROFIT	22,699	22,213	103,167
Gross margin, %	52.0	55.2	57.0
Selling expenses	-17,771	-16,125	-70,292
Administrative expenses	-1,658	-1,451	-5,933
OPERATING PROFIT	3,270	4,637	26,942
Operating margin, %	7.5	11.5	14.9
Interest income	58	87	310
Interest expense	-1	-1	-10
PROFIT AFTER FINANCIAL ITEMS	3,327	4,723	27,242
Tax	-782	-1,110	-6,344
PROFIT FOR THE PERIOD	2,545	3,613	20,898

All profit for the year is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.

Earnings per share, SEK*	1.54	2.18	12.63
Number of shares, thousands*	1,655,072	1,655,072	1,655,072
Depreciation, total	1,819	1,556	6,399
of which cost of goods sold	206	177	725
of which selling expenses	1,490	1,279	5,262
of which administrative expenses	123	100	412
* Before and after dilution.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK m)

	Q1 2016	Q1 2015	1 Dec 2014- 30 Nov 2015
PROFIT FOR THE PERIOD	2,545	3,613	20,898
Other comprehensive income
Items that are or may be reclassified to profit or loss
Translation differences	-976	1,878	1,514
Change in hedging reserves	-285	-150	245
Tax attributable to change in hedging reserves	68	36	-59
Items that will not be classified to profit or loss
Remeasurement of defined benefit pension plans	-	-	43
Tax related to the above remeasurement	-	-	-11
OTHER COMPREHENSIVE INCOME	-1,193	1,764	1,732
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	1,352	5,377	22,630

All comprehensive income is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.

GROUP BALANCE SHEET IN SUMMARY (SEK m)

ASSETS	29 Feb - 2016	28 Feb - 2015	30 Nov 2015
Fixed assets
Intangible fixed assets	4,445	3,408	4,115
Property, plant and equipment	32,578	28,537	32,962
Financial assets	3,067	3,187	3,200
	40,090	35,132	40,277
Current assets
Stock-in-trade	25,153	20,266	24,833
Current receivables	8,525	7,150	7,753
Short-term investments, 4-12 months	1,119	7,627	-
Cash and cash equivalents	13,452	12,399	12,950
	48,249	47,442	45,536
TOTAL ASSETS	88,339	82,574	85,813
EQUITY AND LIABILITIES
Equity	59,401	56,933	58,049
Long-term liabilities*	4,754	3,805	4,827
Current liabilities**	24,184	21,836	22,937
TOTAL EQUITY AND LIABILITIES	88,339	82,574	85,813

* Only provisions for pensions are interest-bearing.

** No current liabilities are interest-bearing.

CHANGE IN GROUP EQUITY IN SUMMARY (SEK m)

	29 Feb - 2016	28 Feb - 2015	30 Nov 2015
Shareholders' equity at the beginning of the period	58,049	51,556	51,556
Total comprehensive income for the period	1,352	5,377	22,630
Dividend	-	-	-16,137
Shareholders' equity at the end of the period	59,401	56,933	58,049

GROUP CASH FLOW STATEMENT (SEK m)

	Q1 - 2016	Q1 - 2015
Current operations
Profit after financial items*	3,327	4,723
Provisions for pensions	31	25
Depreciation	1,819	1,556
Tax paid	-408	-1,978
Cash flow from current operations before changes in working capital	4,769	4,326
Cash flow from changes in working capital
Current receivables	-1,281	231
Stock-in-trade	-511	-442
Current liabilities	1,345	825
CASH FLOW FROM CURRENT OPERATIONS	4,322	4,940
Investment activities
Investment in intangible fixed assets	-433	-507
Investment in tangible fixed assets	-2,098	-1,725
Change in short-term investments, 4 - 12 months	-1,119	-4,930
Other investments	-8	-87
CASH FLOW FROM INVESTMENT ACTIVITIES	-3,658	-7,249
CASH FLOW FOR THE PERIOD	664	-2,309
Cash and cash equivalents at beginning of the financial year	12,950	14,091
Cash flow for the period	664	-2,309
Exchange rate effect	-162	617
Cash and cash equivalents at end of the period**	13,452	12,399

* Interest paid for the group amounts to SEK 1 m (1).

** Cash and cash equivalents and short-term investments 4-12 months at the end of the period amounted to SEK 14,571 m (20,026).

SALES INCLUDING VAT BY MARKET AND NUMBER OF STORES

Q1, 1 December - 29 February

Market	Q1 - 2016	Q1 - 2015	Change in %		29 Feb - 16	Q1 - 2016
	SEK m	SEK m	SEK	Local currency	No. of stores	New stores	Closed stores
Sweden	2,324	2,147	8	8	175		1
Norway	1,316	1,386	-5	4	120
Denmark	1,283	1,256	2	4	102		1
UK	3,546	3,486	2	1	265	2	1
Switzerland	1,492	1,585	-6	-6	96
Germany	8,661	8,671	0	1	447		2
Netherlands	1,737	1,692	3	4	139	1	1
Belgium	1,043	988	6	7	87	3	1
Austria	1,279	1,258	2	3	77		1
Luxembourg	113	100	13	15	10
Finland	681	661	3	5	60
France	3,206	3,182	1	2	223	1
USA	6,377	5,422	18	11	426	14	3
Spain	1,831	1,816	1	2	166	1
Poland	1,047	930	13	18	157	3
Czech Republic	314	250	26	24	45	2	1
Portugal	295	304	-3	-1	30
Italy	2,062	1,887	9	11	151	2	1
Canada	863	790	9	19	78
Slovenia	120	121	-1	1	12
Ireland	262	243	8	9	23
Hungary	340	276	23	26	40
Slovakia	156	124	26	27	18
Greece	408	379	8	9	32
China	2,301	2,148	7	6	365	12
Hong Kong	502	478	5	-1	26	1
Japan	803	762	5	-1	59	2
Russia	712	580	23	40	100	4
South Korea	295	255	16	19	32	1
Turkey	575	404	42	68	47	1
Romania	468	384	22	25	42
Croatia	174	169	3	3	15
Singapore	267	265	1	1	13	1
Bulgaria	135	101	34	35	18
Latvia	67	65	3	4	6
Malaysia	297	278	7	21	29
Mexico	389	248	57	80	16
Chile	244	115	112	129	4
Lithuania	66	62	6	7	7
Serbia	71	74	-4	-3	6
Estonia	69	64	8	10	6
Australia	396	202	96	108	11	1
Philippines	237	152	56	57	13	1
Taiwan	174	40	335	327	7	1
Peru	123				2
Macau	48				2
India	83				2
South Africa	144				2
Franchise	1,228	991	24	10	161	5
Total	50,624	46,791	8	9	3,970	59	1 3

FIVE YEAR SUMMARY

Q1, 1 December - 29 February

	2012	2013	2014	2015	2016
Sales including VAT, SEK m	32,503	33,146	37,524	46,791	50,624
Sales excluding VAT, SEK m	27,832	28,392	32,143	40,276	43,691
Change from previous year in SEK, %	14	2	13	25	8
Change from previous year in local currencies, %	13	6	12	15	9
Operating profit, SEK m	3,526	3,130	3,401	4,637	3,270
Operating margin, %	12.7	11.0	10.6	11.5	7.5
Depreciation for the period, SEK m	911	1,030	1,208	1,556	1,819
Profit after financial items, SEK m	3,701	3,234	3,486	4,723	3,327
Profit after tax, SEK m	2,739	2,458	2,649	3,613	2,545
Cash and cash equivalents and short-term investments, SEK m	22,029	18,959	18,226	20,026	14,571
Stock-in-trade, SEK m	12,397	13,825	15,865	20,266	25,153
Equity, SEK m	45,852	45,625	47,586	56,933	59,401
Number of shares, thousands*	1,655,072	1,655,072	1,655,072	1,655,072	1,655,072
Earnings per share, SEK*	1.65	1.49	1.60	2.18	1.54
Equity per share, SEK*	27.70	27.57	28.75	34.40	35.89
Cash flow from current operations
per share, SEK*	1.34	2.28	1.61	2.98	2.61
Share of risk-bearing capital, %	79.1	78.4	76.2	73.0	72.1
Equity/assets ratio, %	77.6	75.1	72.1	68.9	67.2
Total number of stores	2,491	2,818	3,192	3,551	3,970
Rolling twelve months
Earnings per share, SEK*	9.63	10.02	10.48	12.65	11.98
Return on equity, %	34.9	36.3	37.2	40.1	34.1
Return on capital employed, %	45.8	47.3	48.5	51.5	44.1

* Before and after dilution.

Definition on key figures see annual report.

SEGMENT REPORTING (SEK m)

	Q1 - 2016	Q1 - 2015
Asia and Oceania
External net sales	6,031	5,056
Operating profit	-161	126
Operating margin, %	-2.7	2.5
Europe and Africa
External net sales	30,194	29,057
Operating profit	-985	-708
Operating margin, %	-3.3	-2.4
North and South America
External net sales	7,466	6,163
Operating profit	-237	-3
Operating margin, %	-3.2	-0.0
Group Functions
Net sales to other segments	17,976	17,807
Operating profit	4,653	5,222
Eliminations
Net sales to other segments	-17,976	-17,807
Total
External net sales	43,691	40,276
Operating profit	3,270	4,637
Operating margin, %	7.5	11.5

PARENT COMPANY INCOME STATEMENT (SEK m)

	Q1	Q1	1 Dec 2014-
	2016	2015	30 Nov 2015
External sales excluding VAT	-	1	15
Internal sales excluding VAT*	898	766	3,605
GROSS PROFIT	898	767	3,620
Selling expenses	-	0	0
Administrative expenses	-50	49	-126
OPERATING PROFIT	848	816	3,494
Dividend from subsidiaries	-	483	13,288
Interest income and similar items**	63	9	154
Interest expense	0	-1	-7
PROFIT AFTER FINANCIAL ITEMS	911	1,307	16,929
Year-end appropriations	-	-	17
Tax	-200	-181	-806
PROFIT FOR THE PERIOD	711	1,126	16,140

* Internal sales consists of royalty of SEK 896 m (569) and other SEK 2 m (0) received from group companies.

* Interest income consists of SEK 2 m (9) in interest income and SEK 61 m (0) in translation effects from group companies.

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME (SEK m)

	Q1 2016	Q1 2015	1 Dec 2014- 30 Nov 2015
PROFIT FOR THE PERIOD	711	1,126	16,140
Other comprehensive income
Items that have not been and will not be reclassified to profit or loss
Remeasurement of defined benefit pension plans	-	-	37
Tax related to the above remeasurement	-	-	-8
OTHER COMPREHENSIVE INCOME	-	-	29
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	711	1,126	16,169

PARENT COMPANY BALANCE SHEET IN SUMMARY (SEK m)

	29 Feb - 2016	28 Feb - 2015	30 Nov 2015
ASSETS
Fixed assets
Property, plant and equipment	472	613	506
Financial fixed assets	1,770	1,649	1,727
	2,242	2,262	2,233
Current assets
Current receivables	7,952	10,481	8,473
Short-term investments, 4-12 months	1,000	6,009	-
Cash and cash equivalents	7,710	428	8,095
	16,662	16,918	16,568
TOTAL ASSETS	18,904	19,180	18,801
EQUITY AND LIABILITIES
Equity	18,005	18,387	17,293
Untaxed reserves	447	464	447
Long-term liabilities*	195	223	195
Current liabilities**	257	106	866
TOTAL EQUITY AND LIABILITIES	18,904	19,180	18,801

* Relates to provisions for pensions.

** No current liabilities are interest-bearing.