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H&M Hennes & Mauritz

Quarterly Report Jan 28, 2010

2920_10-k_2010-01-28_9e04daaa-9c11-4c87-bfbf-0d6619c6fd9a.pdf

Quarterly Report

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H & M HENNES & MAURITZ AB

FULL-YEAR REPORT

1 December 2008 – 30 November 2009

  • The H&M Group's sales excluding VAT for the financial year amounted to SEK 101,393 m (88,532), an increase of 15 percent. In local currencies, the increase was 4 percent.
  • Profit after financial items for the financial year was SEK 22,103 m (21,190). Group profit after tax was SEK 16,384 m (15,294), corresponding to SEK 19.80 (18.48) per share, an increase of 7 percent.
  • Sales excluding VAT for the fourth quarter amounted to SEK 28,011 m (26,310), an increase of 6 percent. In local currencies, sales increased by 3 percent.
  • Gross profit for the fourth quarter amounted to SEK 18,581 m (16,416), an increase of 13 percent. The gross margin amounted to 66.3 percent (62.4).
  • Profit after financial items for the fourth quarter amounted to SEK 7,992 m (7,114), an increase of 12 percent. Group profit after tax was SEK 6,154 m (5,089).
  • Successful establishment in Russia during 2009.
  • H&M plans for a net contribution of around 240 stores for the financial year 2009/2010.
  • The Board of Directors proposes a dividend of SEK 16.00 (15.50) per share.
  • ----------------------------------------------------------------------------------------------------- Sales in December 2009 increased by 15 percent in local currencies compared to the same month previous year.
  • Sales during the period 1 26 January 2010 increased by 13 percent in local currencies compared to the same period last year.

Sales

Sales excluding VAT for the H&M Group for the financial year amounted to SEK 101,393 m (88,532), an increase of 15 percent. Sales including VAT amounted to SEK 118,697 m (104,041), an increase of 14 percent. In local currencies the increase was 4 percent. In comparable units, sales decreased by 5 percent.

Sales excluding VAT in the fourth quarter amounted to SEK 28,011 m (26,310), an increase of 6 percent. Sales including VAT were SEK 32,758 m (30,848), an increase of 6 percent. In local currencies sales increased by 3 percent and in comparable units sales decreased by 6 percent.

The Group opened 275 (234*) stores and closed 25 (18) stores during the financial year, a net contribution of 250 stores. In the fourth quarter 159 (129) stores were opened and 11 (9) were closed. The total number of stores in the Group as per 30 November 2009 thus amounted to 1,988 (1,738), of which 36 are franchise stores, 23 COS stores and 46 stores within the FaBric Scandinavien group.

* including 13 Monki stores and 7 Weekday stores through H&M's acquisition of FaBric Scandinavien AB.

Results for the financial year

Gross profit for the financial year amounted to SEK 62,474 m (54,468), an increase of 15 percent. This corresponds to a gross margin of 61.6 percent (61.5).

The operating profit after deducting selling and administrative expenses was SEK 21,644 m (20,138), which corresponds to an operating margin of 21.3 percent (22.7).

Operating profit for the financial year has been charged with depreciation amounting to SEK 2,830 m (2,202).

Consolidated net interest income was SEK 459 m (1,052).

Profit after financial items amounted to SEK 22,103 m (21,190), an increase of 4 percent.

For the financial year group profit after a tax rate of 25.9 percent (27.8) amounted to SEK 16,384 m (15,294), corresponding to earnings per share of SEK 19.80 (18.48), an increase of 7 percent.

Return on shareholders' equity was 42.2 percent (44.3) and return on capital employed was 56.7 percent (61.1).

Comments on the full year

The sales increase during the year has been weak, which is deemed to be due to several factors, mainly the recession with restrained consumption and the fact that the market has been discount-driven.

Internet and catalogue sales had a positive development during the year.

H&M Home, fashion for the home, which was launched in February 2009 via internet and catalogue sales was well received. The development of COS, Monki and Weekday has continued according to plan.

In a time of significant exchange rate fluctuations H&M's policy* to hedge the mark-up on the internal sales of goods to the subsidiaries had a major impact, both negative and positive, on the gross margin in the different quarters of the year. There was a total negative effect of approximately SEK 370 m on the gross profit during the year, corresponding to a negative effect of 0.4 percentage units on the gross margin. Despite this, the company has achieved a gross margin of 61.6 percent (61.5) mainly due to greater surplus capacity at suppliers and a more efficient buying process.

The cost control in the Group has been good during the whole financial year. Selling and administrative expenses increased by 18.9 percent in SEK. In local currencies, the increase was 9 percent which is entirely related to the expansion. Selling and administrative expenses in relation to sales excluding VAT increased to 40.3 percent (38.8) which is explained mainly by weak sales during the year. Costs in comparable stores, which have been well adjusted to the recession, decreased compared to the previous year.

The rate of expansion has been high; a net total of 250 new stores were added during the financial year, which is 25 more stores than was originally planned. The large number of additional stores compared to what was originally planned, is largely due to the economic downturn, which provided opportunities for new store projects and also due to that a number of store contracts scheduled for the first quarter 2010 were completed earlier than planned, allowing these stores to open during the fourth quarter 2009.

Russia and Lebanon became new H&M markets during the year. The first stores in Moscow opened in the spring, while the first franchise stores in Beirut opened during the autumn; these were all very well received. The opening of H&M's first stores in Beijing was another example of successful establishments during the year.

The proportion of refurbished stores remained on the same high level as last year. The investments and costs for new and refurbished stores calculated per unit were lower than in the previous year.

* for information on changed currency hedging policy, see page 5.

Results for the fourth quarter

Gross profit for the fourth quarter amounted to SEK 18,581 m (16,416), an increase of 13 percent. This corresponds to a gross margin of 66.3 percent (62.4).

Operating profit was SEK 7,909 m (6,819) for the fourth quarter, an increase of 16 percent. This corresponds to an operating margin of 28.2 percent (25.9).

Profit after financial items was SEK 7,992 m (7,114), an increase of 12 percent.

Profit after tax amounted to SEK 6,154 m (5,089).

Comments on the fourth quarter

Sales excluding VAT increased by 6 percent. In local currencies, sales increased by 3 percent, however with great differences between the different sales markets.

The weak sales increase is mainly explained by continued recession with restrained consumption, a discount-driven market and mild weather during the autumn which had a negative effect on sales of weather dependent garments such as jackets and heavy knitwear. The gross margin, which amounted to 66.3 percent (62.4), has been positively affected by the currency hedging of the mark-up on sales of goods to the subsidiaries with approximately 1.2 percentage units while it during the fourth quarter 2008 affected the gross margin negatively by approximately 1.5 percentage units. Among other things, the gross margin has also been positively affected by greater surplus capacity at suppliers, efficiencies in the buying process and year-end effects that are mainly due to lower shrinkage than estimated. Increased markdowns affected the gross margin negatively by 0.5 percentage units compared to the corresponding quarter the previous year.

Selling and administrative expenses in the quarter amounted to SEK 10,672 m (9,597), an increase of 11 percent.

The 20 percent increase of the stock-in-trade compared to the same time the previous year is mainly due to the expansion and the fact that sales during the quarter have been lower than planned. As sales were weak during the fourth quarter, the stock-in-trade per 30 November 2009 contains a larger proportion of mainly weather dependent garments compared to the same time the previous year. This will lead to larger markdowns during the first quarter 2009/2010 and thereby affect the gross margin negatively compared to the corresponding quarter last year.

Financial position and cash flow

Consolidated total assets as per 30 November 2009 increased by 6 percent compared to the same time last year and amounted to SEK 54,363 m (51,243).

During the financial year the Group generated a cash flow of SEK -3,607 m (5,292). The operating activities generated a positive cash flow of SEK 17,973 m (17,966). Cash flow was among other things affected by dividend of SEK -12,825 m (-11,584), investments in fixed assets of SEK -5,686 m (-5,193) and by short-term investments with a duration of four to twelve months of SEK -3,001 m (4,900). Liquid funds and short-term investments amounted to SEK 22,025 m (22,726).

The stock-in-trade increased by 20 percent compared to the same time last year and amounted to SEK 10,240 m (8,500). This corresponds to 10.1 percent (9.6) of sales excluding VAT. The stock-in-trade was 18.8 percent (16.6) of total assets.

The equity/assets ratio was 74.7 percent (72.1) and the share of risk-bearing capital was 78.5 percent (75.7).

Shareholders' equity apportioned on the outstanding 827,536,000 shares as per 30 November 2009 was SEK 49.08 (44.65).

Expansion

H&M's growth target is to increase the number of stores with 10-15 percent per year with continued high profitability and at the same time increase sales in comparable units. H&M remains positive towards the future expansion and the company's business opportunities. For the 2009/2010 financial year a net contribution of approximately 240 stores is planned, of which 25 Monki and Weekday stores and 12 COS stores. Most of the Group's new stores are planned for the US, the UK, China, France, Germany and Italy. The proportion of refurbishments of existing stores is expected to remain on the same high level as during 2008/2009.

As previously communicated, the following establishments are planned for 2010: The first store in Seoul, South Korea, will open during the spring and the second store during the autumn 2010.

Israel will become new franchise market during 2010 where the first three stores are planned to open in Tel Aviv, Jerusalem and Haifa during the spring.

H&M plans to start online sales in the UK during the autumn 2010.

Tax

The tax rate for the 2008/2009 financial year was 25.9 percent (27.8). On 1 January 2009 the Swedish rate of corporate tax was reduced to 26.3 percent from its previous level of 28 percent. In the end of the financial year 2008/2009 it was made clear that the new lower Swedish rate of corporate tax affects the Group already for the 2008/2009 financial year. Tax expense for the year was thus SEK 225 m lower than originally estimated.

For the full year of 2009/2010 the effective tax rate for the Group is expected to be approximately 26 percent.

Employees

The average number of employees, converted into full-time positions, in the Group was 53,476 (53,430), of which 4,874 (4,924) in Sweden.

The Parent Company

The parent company had no external sales (136) during the 2008/2009 financial year. Profit after financial items amounted to SEK 15,267 m (15,395). Investments in fixed assets amounted to SEK -94 m (-185).

Sales comments on the current quarter

Sales including VAT in local currencies for December 2009 increased by 15 percent compared to the same month previous year. Sales in comparable units increased by 3 percent.

Sales during the period 1 - 26 January 2010 increased by 13 percent in local currencies compared to the same period last year.

Changed currency hedging policy

H & M Hennes & Mauritz AB changed the internal transfer pricing model within the Group during the second half of 2007. Among other things, this meant the introduction of currency hedging for the mark-up on the internal sales of goods to the subsidiaries in order to secure part of the Group's gross earnings in Swedish kronor.

During a time of significant exchange rate fluctuations in the autumn of 2008 and spring of 2009 the currency hedging for the mark-up on internal sales of goods to the subsidiaries had a major impact, both negative and positive, on gross margin in the different quarters of the year. To avoid such effects in the future the company has decided to end the hedging of the internal mark-up with effect from 1 December 2009 and thereby return to, as previously, only applying currency hedging for the Group's flow of goods.

Although the currency hedging for the internal mark-up to the subsidiaries ended as of 1 December 2009, there are outstanding FX forward contracts entered before 1 December 2009 that will mature during the first half-year 2009/2010. This means that the majority of the internal mark-up for the first quarter is currency-hedged, which is expected to have a positive impact on the gross margin based on current exchange rates. For the second quarter a somewhat smaller proportion of the internal mark-up is currency-hedged, and is therefore estimated, at current currency rates, to have a smaller effect on the gross margin than in the first quarter 2009/2010.

During the year the part of the Group's flow of goods (around 10 percent) that was not currencyhedged had an impact on the gross margin that varied substantially in the various quarters due to rapid and significant exchange rate fluctuations. In order to decrease such effects in the future the company has therefore also, with effect from 1 December 2009, decided to apply currency hedging for 100 percent for the Group's flow of goods instead of as previously 90 percent.

Dividend proposal

H&M's financial goal is to enable the company to continue enjoying good growth and to be prepared to exploit business opportunities. It is essential that the expansion, as in the past, proceeds with continued high degree of financial strength and continued freedom of action.

Based on this policy, the Board of Directors has determined that the total dividend should equal about half of the profit after tax. In addition, the Board may propose that the surplus liquidity can also be distributed.

The Board of Directors will propose to the Annual General Meeting 2010 a dividend of SEK 16.00 per share (15.50), which corresponds to 81 percent (84) of the result after tax.

The Board of Directors is of the opinion that the proposed distribution of earnings is justifiable taking into consideration the financial position and continued freedom of action of the Group and the parent company and observing the requirements that the nature and extent of the business, its risks and future expansion plans impose on the Group's and the parent company's equity and liquidity.

Annual General Meeting 2010

The Annual General Meeting 2010 will be held on Thursday 29 April, at 3 pm in the Victoria Hall, at the Stockholm International Fairs.

Annual Report 2008/2009

The Annual Report including the Corporate Governance Report is expected to be published on 25 March 2010, on the same date it will also be published on www.hm.com. The printed Annual Report will be sent out by post to shareholders that have so requested and will also be available at the company's head office.

Accounting principles

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

The accounting principles applied in this report are unchanged compared to last year and are described in the Annual Report and Consolidated Financial Statements for 2007/2008, in Note 1 – Accounting principles.

The parent company applies the Swedish Annual Accounts Act and Recommendation RFR 2.2, Accounting for Legal Entities, which essentially means that IFRS is applied. In accordance with Recommendation RFR 2.2, IAS 39 is not applied in the parent company.

Risks and uncertainties

A number of factors may affect H&M's results and business. Most 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 fashions, weather situations, quota systems and exchange rates, but also in connection with expansion into new markets, the launch of new concepts, changes in consumer behaviour and handling of the brand.

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 2007/2008. There were no significant changes in risks and uncertainties during the period.

Calendar

8 April 2010 Three month Report, 1 Dec 2009 – 28 Feb 2010 29 April 2010, at 3 p.m. Annual General Meeting 2010 24 June 2010 Half-year Report, 1 Dec 2009 – 31 May 2010 29 September 2010 Nine month Report, 1 Dec 2009 – 31 Aug 2010 27 January 2011 Full-year Report, 1 Dec – 30 Nov 2010

The Full-year Report has not been audited by the company's auditors.

Stockholm, 27 January 2010 The Board of Directors

All figures within parenthesis refer to the corresponding period or point of time the previous year. Comparable units, previously referred to as comparable stores, imply the stores and the internet and catalogue sales countries that have been in operation for at least a financial year. H&M's financial year extends from 1 December to 30 November.

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 7.30 (CET) on 28 January 2010.

Contact persons:

+46-8-796 5250
+46-8-796 5277
+46-8-796 5233
+46-8-796 5500

Information about H&M and press images are available at www.hm.com

H & M Hennes & Mauritz AB (Publ.) 106 38 Stockholm Phone: +46-8-796 5500, Fax: +46-8-24 80 78, E-mail: [email protected] Registered office Stockholm, Reg. No 556042-7220

H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on NASDAQ OMX Stockholm. The company's business concept is to offer fashion and quality at the best price. In addition to H&M, the group includes the brands COS, Monki, Weekday and Cheap Monday as well as H&M Home. The H&M Group has almost 2,000 stores in 35 markets. In 2009, sales including VAT were SEK 118,697 million and the number of employees was more than 74,000. For further information, visit www.hm.com.

GROUP INCOME STATEMENT (SEK m)

1 December - 30 November

2009 2008 Q4 2009 Q4 2008
Sales including VAT 118,697 104,041 32,758 30,848
Sales excluding VAT 101,393 88,532 28,011 26,310
Cost of goods sold -38,919 -34,064 -9,430 -9,894
GROSS PROFIT 62,474 54,468 18,581 16,416
Selling expenses -38,224 -32,185 -9,961 -8,997
Administrative expenses -2,606 -2,145 -711 -600
OPERATING PROFIT 21,644 20,138 7,909 6,819
Interest income 467 1,060 86 297
Interest expense -8 -8 -3 -2
PROFIT AFTER FINANCIAL ITEMS 22,103 21,190 7,992 7,114
Tax -5,719 -5,896 -1,838 -2,025
PROFIT FOR THE YEAR 16,384 15,294 6,154 5,089

All profit is attributable to the parent company H & M Hennes & Mauritz AB's shareholders.

Earnings per share, SEK* 19.80 18.48 7.44 6.15
Number of shares, thousands* 827,536 827,536 827,536 827,536
Depreciation, total 2,830 2,202 672 457
of which cost of goods sold 310 245 95 67
of which selling expenses 2,350 1,825 507 341
of which administrative expenses 170 132 70 49

* Before and after dilution.

GROUP BALANCE SHEET (SEK m)

30 November

ASSETS 2009 2008
FIXED ASSETS
Intangible fixed assets
Brands 396 443
Customer relationships 110 123
Leasehold rights 744 659
Goodwill 424 431
1,674 1,656
Tangible fixed assets
Buildings and land 492 480
Equipment, tools, fixture and fittings 14,319 11,961
14,811 12,441
Long-term receivables 551 476
Deferred tax receivables 1,246 1,299
TOTAL FIXED ASSETS 18,282 15,872
CURRENT ASSETS
Stock-in-trade 10,240 8,500
Short-term receivables
Accounts receivables 1,990 1,991
Other receivables 889 1,206
Prepaid expenses 937 948
3,816 4,145
Short-term investments 3,001 -
Liquid funds 19,024 22,726
TOTAL CURRENT ASSETS 36,081 35,371
TOTAL ASSETS 54,363 51,243

GROUP BALANCE SHEET (SEK m)

30 November

EQUITY AND LIABILITIES 2009 2008
EQUITY
Share capital 207 207
Reserves 1,514 1,410
Retained earnings 22,508 20,039
Profit for the year 16,384 15,294
TOTAL EQUITY 40,613 36,950
Long-term liabilities*
Provisions for pensions 254 228
Deferred tax liabilities 2,038 1,818
Other provisions 368 368
2,660 2,414
Short-term liabilities**
Accounts payable 3,667 3,658
Tax liabilities 439 1,279
Other liabilities 2,531 3,255
Accrued expenses and prepaid income 4,453 3,687
11,090 11,879
TOTAL LIABILITIES 13,750 14,293
TOTAL EQUITY AND LIABILITIES 54,363 51,243
Pledged assets and contigent liabilities - -

* Only provisions for pensions are interest-bearing.

** No current liabilities are interest-bearing.

GROUP CHANGES IN EQUITY (SEK m)

All shareholders' equity is attributable to the parent company H & M Hennes & Mauritz AB's shareholders since there are no minority interests.

Share
capital
Translation
effects
Hedging
reserves
Retained
earnings
Total
shareholders'
equity
Shareholders' equity, 1 December 2008 207 1,942 -532 35,333 36,950
Translations effect, hedging reserves
Deferred tax
-
-
-386
-
680
-190
-
-
294
-190
Income and expenses posted directly
to equity
- -386 490 - 104
Profit for the year - - - 16,384 16,384
Total income and expenses - -386 490 16,384 16,488
Dividend - - - -12,825 -12,825
Shareholders' equity, 30 November 2009 207 1,556 -42 38,892 40,613
Share
capital
Translation
effects
Hedging
reserves
Retained
earnings
Total
shareholders'
equity
Shareholders' equity, 1 December 2007 207 263 - 31,623 32,093
Translations effect, hedging reserves - 1,679 -739 - 940
Deferred tax - - 207 - 207
Income and expenses posted directly
to equity - 1,679 -532 - 1,147
Profit for the year - - - 15,294 15,294
Total income and expenses - 1,679 -532 15,294 16,441
Dividend - - - -11,584 -11,584
Shareholders' equity, 30 November 2008 207 1,942 -532 35,333 36,950

GROUP CASH FLOW STATEMENT (SEK m)

1 December - 30 November

2009 2008
Profit after financial items* 22,103 21,190
Provisions for pensions 26 72
Depreciation 2,830 2,202
Tax paid -6,468 -5,940
Cash flow from current operations before changes 18,491 17,524
in working capital
Cash flow from changes in working capital
Current receivables -71 -1,343
Stock-in-trade -1,740 -183
Current liabilities 1,293 1,968
CASH FLOW FROM CURRENT OPERATIONS 17,973 17,966
Investment activities
Investment in leasehold rights -180 -446
Investment in/sale of buildings and land -25 -23
Investment in fixed assets -5,481 -4,724
Acquistion of subsidiaries 7 -555
Change in short-term investments, 4 - 12 months -3,001 4,900
Other investments -75 -242
CASH FLOW FROM INVESTMENT ACTIVITIES -8,755 -1,090
Financing activities
Dividend -12,825 -11,584
CASH FLOW FROM FINANCING ACTIVITIES -12,825 -11,584
CASH FLOW FOR THE YEAR -3,607 5,292
Liquid funds at beginning of the financial year 22,726 16,064
Cash flow for the year -3,607 5,292
Exchange rate effect -95 1,370
Liquid funds at the end of the year** 19,024 22,726

* Interest paid amounts for the Group to SEK 8 m (8).

Received interest amounts for the Group to SEK 466 m (1 070).

** Liquid funds and short-term investments by the end of the financial year amounted to SEK 22,025 m (22,726).

FIVE YEAR SUMMARY

1 December - 30 November

THE FINANCIAL YEAR 2009 2008 2007 2006 2005
Sales including VAT, SEK m 118,697 104,041 92,123 80,081 71,886
Sales excluding VAT, SEK m 101,393 88,532 78,346 68,400 61,262
Change from previous year, % 15 13 15 12 14
Operating profit, SEK m 21,644 20,138 18,382 15,298 13,173
Operating margin, % 21.3 22.7 23.5 22.4 21.5
Depreciation for the year, SEK m 2,830 2,202 1,814 1,624 1,452
Profit after financial items, SEK m 22,103 21,190 19,170 15,808 13,553
Profit after tax, SEK m 16,384 15,294 13,588 10,797 9,247
Liquid funds and short-term investments, SEK m 22,025 22,726 20,964 18,625 16,846
Stock-in-trade, SEK m 10,240 8,500 7,969 7,220 6,841
Equity, SEK m 40,613 36,950 32,093 27,779 25,924
Number of shares, thousands* 827,536 827,536 827,536 827,536 827,536
Earnings per share, SEK* 19.80 18.48 16.42 13.05 11.17
Shareholders' equity per share, SEK* 49.08 44.65 38.78 33.57 31.33
Cash flow from current operations
per share, SEK*
20,92 21,71 18,59 14,57 12,25
Dividend per share, SEK 16.00** 15.50 14.00 11.50 9.50
Return on shareholders' equity, % 42.2 44.3 45.4 40.2 38.4
Return on capital employed, % 56.7 61.1 63.7 58.7 56.3
Share of risk-bearing capital, % 78.5 75.7 78.5 80.0 80.2
Equity/assets ratio, % 74.7 72.1 76.9 78.1 78.1
Total number of stores 1,988 1,738 1,522 1,345 1,193
Average number of employees 53,476 53,430 47,029 40,855 34,614

* Before and after dilution.

** Proposed by the Board of Directors.

Definition on key figures see Annual Report 2008 note 29.

The International Standards (IFRS) are beeing applied from 2005/2006. The restatement of the 2004/2005 figures according to IFRS has not involved any adjustment.

SALES INCLUDING VAT BY COUNTRY AND NUMBER OF STORES

Full year, 1 December - 30 November

Total 118,697 104,041 14 4 1,988 275 25
Franchise 591 390 52 52 36 18
Russia 373 5 5
Japan 1,111 198 461 324 6 4
China 1,614 881 83 51 27 14
Greece 480 301 59 43 15 7
Slovakia 187 137 36 23 4 1
Hungary 306 304 1 0 10 2
Ireland 557 488 14 2 11 2
Slovenia 615 594 4 -7 10 1
Canada 2,190 1,812 21 13 52 9
Italy 3,616 2,675 35 21 64 19 1
Portugal 928 764 21 9 20 3
Czech Republic 667 670 0 -6 19 4 1
Poland 2,466 2,508 -2 8 65 12
Spain 6,285 5,778 9 -2 114 15
USA 7,487 6,513 15 -3 189 20
France 8,455 7,988 6 -5 135 21
Finland 2,543 2,450 4 -6 38 2
Luxembourg 411 351 17 5 9
Austria 5,503 5,020 10 -2 63 5 2
Belgium 3,502 3,122 12 1 61 7 1
Netherlands 7,402 6,793 9 -2 103 7
Germany 30,069 25,487 18 6 362 31 8
Switzerland 6,042 4,879 24 5 73 7
United Kingdom 7,564 7,337 3 6 167 24 3
Denmark 4,254 3,867 10 -1 77 12 4
Norway 5,598 5,290 6 3 92 8 1
Sweden 7,881 7,444 6 6 161 15 4
COUNTRY 2009 2008 SEK Local currency 30 Nov. 2009 stores stores
SEK m SEK m Change in % No. of stores New Closed

SALES INCLUDING VAT BY COUNTRY AND NUMBER OF STORES

Fourth quarter, 1 September - 30 November

SEK m SEK m Change in % No. of stores New Closed
COUNTRY 2009 2008 SEK Local currency 30 Nov. 2009 stores stores
Sweden 2,208 2,000 10 10 161 6 1
Norway 1,536 1,425 8 3 92 6 1
Denmark 1,143 1,082 6 1 77 9 3
United Kingdom 2,131 2,165 -2 5 167 16 1
Switzerland 1,689 1,525 11 2 73 1
Germany 8,259 7,541 10 4 362 18 2
Netherlands 2,049 2,018 2 -4 103 5
Belgium 901 904 0 -5 61 4
Austria 1,546 1,490 4 -2 63 3 1
Luxembourg 109 105 4 -1 9
Finland 636 659 -3 -5 38 1
France 2,267 2,482 -9 -14 135 12
USA 1,984 2,010 -1 1 189 14
Spain 1,640 1,663 -1 -6 114 9
Poland 702 726 -3 8 65 8
Czech Republic 188 189 -1 -1 19 3 1
Portugal 235 224 5 0 20 2
Italy 1,093 891 23 15 64 12 1
Canada 607 577 5 1 52 1
Slovenia 169 194 -13 -18 10 1
Ireland 144 140 3 -2 11 1
Hungary 89 88 1 3 10 2
Slovakia 59 42 40 41 4 1
Greece 163 104 57 47 15 5
China 492 298 65 62 27 7
Japan 477 198 141 85 6 4
Russia 130 5 3
Franchise 112 108 4 4 36 5
Total 32,758 30,848 6 3 1,988 159 11

SEGMENT REPORTING (SEK m)

1 December - 30 November

2009 2008
Nordic region
External net sales 16,302 15,323
Operating profit
Operating margin, %
692
4.2
1,154
7.5
Assets, excluding tax receivables 5,037 4,059
Liabilities, excluding tax liabilities 1,639 1,168
Investments 375 268
Depreciation 259 198
Eurozone excluding Finland
External net sales 57,229 49,961
Operating profit 2,545 2,938
Operating margin, % 4.4 5.9
Assets, excluding tax receivables 16,601 14,190
Liabilities, excluding tax liabilities 3,307 2,911
Investments 2,789 2,439
Depreciation 1,374 1,051
Rest of the World
External net sales
27,862 23,248
Operating profit 1,298 1,196
Operating margin, % 4.7 5.1
Assets, excluding tax receivables 10,711 9,234
Liabilities, excluding tax liabilities 1,875 1,601
Investments 2,135 1,827
Depreciation 1,015 823
Group Functions
Net sales to other segments 57,510 51,558
Operating profit 17,109 14,850
Operating margin, % 29.7 28.8
Assets, excluding tax receivables 20,768 22,461
Liabilities, excluding tax liabilities 4,452 5,516
Investments 387 659
Depreciation 182 130
Eliminations
Net sales to other segments -57,510 -51,558
Total
External net sales 101,393 88,532
Operating profit 21,644 20,138
Operating margin, % 21.3 22.7
Assets, excluding tax receivables 53,117 49,944
Liabilities, excluding tax liabilities 11,273 11,196
Investments 5,686 5,193
Depreciation 2,830 2,202

PARENT COMPANY INCOME STATEMENT (SEK m)

1 December-30 November

2009 2008
Sales including VAT - 136
Sales excluding VAT - 136
Internal sales excluding VAT* 5,521 5,175
Cost of goods sold - -32
GROSS PROFIT 5,521 5,279
Selling expenses -1,898 -1,773
Administrative expenses -1,561 -1,388
OPERATING PROFIT 2,062 2,118
Dividend from subsidiaries 13,092 12,839
Interest income 113 438
Interest expense 0 0
PROFIT AFTER FINANCIAL ITEMS 15,267 15,395
Year-end appropriations -41 -663
Tax -608 -534
PROFIT FOR THE YEAR 14,618 14,198

* Includes received royalty from group companies.

PARENT COMPANY BALANCE SHEET (SEK m)

30 November

ASSETS 2009 2008
FIXED ASSETS
Tangible fixed assets
Buildings and land 51 58
Equipment, tools, fixture and fittings 363 356
414 414
Financial fixed assets
Shares and participation rights 572 583
Receivables from subsidiaries 705 345
Long-term receivables 30 13
Deferred tax receivables 56 51
1,363 992
TOTAL FIXED ASSETS 1,777 1,406
CURRENT ASSETS
Short-term receivables
Receivables from subsidiaries 8,072 8,579
Tax receivables 627 143
Other receivables 13 46
Prepaid expenses 14 12
8,726 8,780
Short-term investments 3,001 -
Liquid funds 3,644 6,525
TOTAL CURRENT ASSETS 15,371 15,305
TOTAL ASSETS 17,148 16,711

PARENT COMPANY BALANCE SHEET (SEK m)

30 November

EQUITY AND LIABILITIES 2009 2008
EQUITY
Restricted equity
Share capital 207 207
Restricted reserves 88 88
295 295
Non-restricted equity
Retained earnings 681 783
Profit for the year 14,618 14,198
15,299 14,981
TOTAL EQUITY 15,594 15,276
UNTAXED RESERVES 825 782
Long-term liabilities
Provisions for pensions 211 193
Short-term liabilities*
Accounts payable 133 98
Other liabilities 245 219
Accrued expenses and prepaid income 140 143
518 460
TOTAL LIABILITIES 729 653
TOTAL EQUITY AND LIABILITIES 17,148 16,711
Pledged assets - -
Contingent liabilities 11,292 11,751

* No current liabilities are interest-bearing.

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