Annual Report • Jan 26, 2012
Annual Report
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1 December 2010 – 30 November 2011
"H&M stands strong in a challenging market. We increased sales by 8 percent in local currencies and continued to gain market share during what was one of the toughest years for a long time for the fashion retail industry in many countries. The fact that we have gained market share, proves that our customers appreciate our collections, which offer a wide range of inspiring fashion for everyone.
The situation in the sourcing markets has also been challenging. Cost inflation has been high resulting in increased purchasing costs for the fashion retail industry. Despite increased purchasing costs, we chose a strategy of strengthening our customer offering and market position even further relative to competitors. The investments have varied over time and have involved everything from even better prices to even higher quality and more sustainable materials. We are convinced that this will gradually become more evident to customers and will strengthen H&M's already strong market position even further.
Our strong expansion continued during the year. We opened 266 new stores net, five new markets were added and we created around 7,000 new jobs. Today we have a strong global presence with around 2,500 stores in 43 markets and more than 94,000 employees.
We are also planning for a strong expansion in 2012 with approximately 275 new stores net. The countries in which we will open the most stores during the year are China, the US and the UK. Bulgaria, Latvia, Malaysia and Thailand will become new H&M markets. We also plan to open in Mexico during the autumn 2012, it will be our first store in Latin America. This will make a total of 10 new H&M markets over a period of two years. Expansion will also continue within our other brands such as COS and Monki, including the opening of the first COS stores in Hong Kong, Italy, Finland and Kuwait.
The new year has started well, with strong sales development in both December and so far in January. Most indicators suggest that the macro-economic climate in many of our markets will continue to be tough during 2012, but we have a strong belief in our offering and are convinced that H&M will continue to maintain its strong position as the year goes on. We are looking forward to an exciting year full of opportunities."
Sales including VAT increased by 8 percent in local currencies for the financial year. Sales in comparable units decreased by 1 percent. Converted into SEK, sales increased to SEK 128,810 m (126,966). Sales excluding VAT increased to SEK 109,999 (108,483).
The strengthening of the Swedish krona during the year has meant that most of the sales countries' currencies have depreciated against the Swedish krona compared to the previous year. For H&M, this fact has had significant negative effects when translating sales in local currencies into the company's reporting currency of SEK. As a result, although sales increased by 8 percent in local currencies, the increase in Swedish krona was only 1 percent.
Sales including VAT for the fourth quarter increased by 6 percent in local currencies. Sales in comparable units decreased by 3 percent. Converted into SEK, sales increased by 4 percent to SEK 36,191 m (34,792). Sales excluding VAT increased to SEK 30,952 m (29,711).
The Group opened 296 (243) stores and closed 30 (25) stores during the financial year, i.e. a net addition of 266 new stores. In the fourth quarter, 160 (138) stores opened and 13 (10) stores closed. The total number of stores in the Group as per 30 November 2011 thus amounted to 2,472 (2,206), of which 70 franchise stores, 45 COS stores, 52 Monki stores, 19 Weekday stores and 4 Cheap Monday stores.
Gross profit for the Group for the financial year amounted to SEK 66,147 m (68,269), a decrease of 3 percent. This corresponds to a gross margin of 60.1 percent (62.9).
The operating profit amounted to SEK 20,379 m (24,659). This corresponds to an operating margin of 18.5 percent (22.7).
Operating profit for the financial year has been charged with depreciation amounting to SEK 3,262 m (3,061).
Consolidated net interest income was SEK 563 m (349).
Profit after financial items amounted to SEK 20,942 m (25,008).
The Group's profit for the financial year after applying a tax rate of 24.5 percent (25.3) was SEK 15,821 m (18,681), which represents earnings per share of SEK 9.56 (11.29), a decrease of 15 percent.
Return on shareholders' equity was 35.8 percent (44.1) and return on capital employed was 47.1 percent (58.7).
| FULL-YEAR | FULL-YEAR | Q4 | Q4 | |
|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | |
| (SEK m) | ||||
| Net sales | 109,999 | 108,483 | 30,952 | 29,711 |
| Gross profit | 66,147 | 68,269 | 19,150 | 18,792 |
| gross margin, % | 60.1 | 62.9 | 61.9 | 63.2 |
| Operating profit | 20,379 | 24,659 | 6,665 | 7,060 |
| operating margin, % | 18.5 | 22.7 | 21.5 | 23.8 |
| Net financial items | 563 | 349 | 137 | 118 |
| Profit after financial items | 20,942 | 25,008 | 6,802 | 7,178 |
| Tax | -5,121 | -6,327 | -1,445 | -1,691 |
| Profit for the period | 15,821 | 18,681 | 5,357 | 5,487 |
| Earnings per share, SEK | 9.56 | 11.29 | 3.24 | 3.32 |
H&M has continued to gain market share in a year that has been very challenging for the fashion retail industry in many countries. Economic uncertainty in a number of markets has had a negative effect on consumption resulting in fiercer competition for consumer spending. For fashion retailers, this has resulted in multiple price activities and markdowns which were intensified during the second half-year.
In these circumstances, sales have been good showing that H&M's strong offering has been well received by customers. The fact that sales in comparable units decreased by 1 percent for the full-year should also be viewed in the light of last year's strong comparables of a 5 percent increase in comparable units. Sales development has been very positive in countries such as the US, China, Russia and the UK.
The Group's other brands COS, Monki, Weekday and Cheap Monday have also had a positive sales development during the year. It has been a very good year for COS in particular, which has developed beyond the company's high expectations both regarding sales and profits. There are now nearly 50 COS stores in nine countries and the expansion continues.
It has also been a challenging year in the sourcing markets, where high cost inflation, mainly as a result of very high cotton prices, has led to increased purchasing costs.
To maintain a long-term perspective and always be able to offer customers the best combination of fashion and quality at the best price in each market, H&M has deliberately invested to further strengthen its customer offering and thereby its position in the market. The investments have varied over time and have involved everything from even better prices to even higher quality and more sustainable materials.
A total of 266 new stores net were opened in 2011, which was more than the originally planned 250 stores. The fact that more stores than planned were added was mainly due to greater expansion opportunities in China and the very positive reception in H&M's new markets of Romania and Croatia. China, the US, the UK and Germany were the largest expansion markets during the year.
The reception in H&M's new market of Singapore in South East Asia has been very good. The new franchise markets Jordan and Morocco, which opened at the end of November, have also made a good start.
E-commerce is becoming increasingly important for the fashion retail industry as well as for H&M. The new H&M Shop Online, which was launched at the beginning of 2011, offers an inspiring, innovative and interactive shopping experience. H&M's website including the new H&M Shop Online is today one of the world's most visited websites in the fashion retail industry. The newly launched shop online for COS and Monki in 18 markets have been well received.
During the year H&M increased its investments within marketing, IT and online and catalogue sales. The purpose of these investments is to further strengthen H&M's market position in the long term and to secure future expansion. The company has also introduced a long-term incentive programme for all employees, the H&M Incentive Program, which aims to encourage long-term commitment and support future recruitment. Even if these investments have led to cost increases, the cost control remains good. Costs in comparable stores have decreased compared to the previous year.
The profit decrease compared to the previous year is mainly related to the increased purchasing costs combined with the fact that H&M chose a strategy of further strengthening its customer offering and its market position relative to competitors. In addition, more than SEK 1.2 billion of the decrease in profit after financial items compared to the previous year is related to negative currency translation effects, as most of the sales countries' currencies have depreciated relative to the Swedish krona during the year. The item affecting comparability, SEK 248 m to the H&M Incentive Program, has also affected the year's profits.
The number of refurbished stores remained at the same high level as in the 2010 financial year while investments for new and refurbished stores were lower per unit than in 2010.
Gross profit for the fourth quarter amounted to SEK 19,150 m (18,792), an increase of 2 percent. This corresponds to a gross margin of 61.9 percent (63.2).
Operating profit for the fourth quarter amounted to SEK 6,665 m (7,060). This corresponds to an operating margin of 21.5 percent (23.8).
Profit after financial items was SEK 6,802 m (7,178).
Profit after tax was SEK 5,357 m (5,487), corresponding to SEK 3.24 (3.32) per share, a decrease of 2 percent.
H&M's sales including VAT increased by 6 percent in local currencies in the quarter. Converted into SEK, sales amounted to SEK 36,191 m (34,792). Sales are considered to be satisfactory considering that consumption in many of H&M's markets was affected by unseasonably warm weather and was also restrained due to concerns regarding the effects of the debt crisis in Europe.
The gross margin was 61.9 percent (63.2). The decrease in the gross margin was mostly due to increased purchasing costs during the time of sourcing for the fourth quarter 2011 compared to the corresponding period the previous year, combined with the chosen strategy of further strengthening the customer offering and the market position relative to competitors. The increased purchasing costs are mainly related to the continued sharp increase in the cotton price during 2011 compared to the already high levels in 2010. The cotton price peaked in spring 2011, but remained at higher levels than in 2010 right up until the autumn.
The gross margin has also been negatively affected by 0.6 percentage units as a result of increased markdowns in relation to sales compared to the corresponding quarter the previous year.
The decrease in the gross margin has been partly offset by a positive US dollar effect at the time of sourcing for the fourth quarter compared to the corresponding period the previous year.
Selling and administrative expenses in the quarter amounted to SEK 12,485 m (11,732), an increase of 6 percent. In local currencies, the increase was 8 percent. The cost increase compared to the fourth quarter 2010 is mainly due to the expansion and to investments within IT and online in order to further strengthen H&M's market position in the long term and to secure future expansion. Cost control in the Group remains good. Costs in comparable stores decreased compared to the fourth quarter 2010.
Profitability remained strong with an operating margin of 21.5 percent (23.8). Profit after financial items amounted to SEK 6,802 (7,178), a decrease of 5 percent.
The stock-in-trade increased by 20 percent compared to the same time the previous year and amounted to SEK 13,819 m (11,487). In local currencies the increase was also 20 percent. The stock increase is mainly explained by the expansion and higher purchasing costs, but also by the warm autumn's effect on sales of winter garments. The stock-in-trade as of 30 November 2011 consists of more winter garments compared to the same time the previous year and is therefore slightly higher than planned. Apart from this, the level and composition of the stock-in-trade are deemed satisfactory.
Consolidated total assets as per 30 November 2011 amounted to SEK 60,188 m (59,182), an increase of 2 percent compared to the same time the previous year.
The current operations generated a positive cash flow of SEK 17,420 m (21,838). Cash flow was among other things affected by dividends of SEK -15,723 m (-13,239), investments in fixed assets of SEK -5,174 m (-4,959) and by changes in short-term investments with a duration of four to twelve months of SEK 1,209 m (-5,166). During the financial year, the Group generated a cash flow of SEK -2,359 m (-1,530). Liquid funds and short-term investments amounted to SEK 21,277 m (24,858).
The stock-in-trade increased by 20 percent compared to the same time the previous year and amounted to SEK 13,819 m (11,487). This corresponds to 12.6 percent (10.6) of sales excluding VAT. The stock-in-trade was 23.0 percent (19.4) of total assets.
The equity/assets ratio was 73.3 percent (74.6) and the share of risk-bearing capital was 74.9 percent (76.2).
Shareholders' equity apportioned on the outstanding 1,655,072,000 (1,655,072,000) shares as per 30 November 2011 was SEK 26.65 (26.69).
H&M remains positive as regards future expansion and the Group's business opportunities.
H&M's growth target remains intact. The growth target is to increase the number of stores by 10-15 percent per year with continued high profitability, while at the same time increasing sales in comparable units. For the 2011/2012 financial year a net addition of approximately 275 stores is planned. China, the US and the UK are expected to be the largest expansion markets for H&M in 2012. There are also still great opportunities for expansion in markets such as France, Italy and Germany.
The proportion of refurbishments of existing stores is expected to remain at the same high level as during 2010/2011.
H&M will open its first store in Sofia, Bulgaria in March 2012. H&M is continuing to expand in South East Asia with a store opening in Kuala Lumpur in Malaysia during the autumn 2012. In autumn, H&M will also open its first stores in Riga in Latvia. In addition to these new H&M countries, H&M plans to open in Mexico in autumn 2012. It will be the company's first store in Latin America. Thailand will become a new franchise market in cooperation with the franchisee J.S.Gill. The first store is scheduled to open in autumn 2012 in Bangkok. The franchise opening in Jakarta in Indonesia has been postponed until spring 2013.
In autumn 2012 H&M will start online sales in the US, the world's largest online market.
Expansion continues for the Group's other brands COS, Monki, Weekday and Cheap Monday. COS, for example, will open its first stores in Hong Kong, Italy and Finland during spring 2012 and in Kuwait during autumn 2012. The opening in Kuwait will be in cooperation with the franchisee Alshaya. H&M Home will also continue to expand.
Tax
The tax rate for the financial year 2010/2011 was 24.5 percent (25.3). The lower tax rate compared to the previous year's tax rate, is mainly due to adjustments of previous years' tax costs.
For the financial year 2011/2012 the tax rate is expected to be in the region of 25–26 percent, depending on the results of the subsidiaries in each country.
The average number of employees in the Group, converted into full-time positions, was 64,874 (59,440), of which 5,855 (5,398) are employed in Sweden.
The parent company's external sales amounted to SEK 24 m (6) for the financial year. Profit after financial items amounted to SEK 16,451 m (14,868). Investments in fixed assets amounted to SEK 119 m (100).
Sales including VAT in December 2011 increased by 13 percent in local currencies compared to the same month the previous year. Sales in comparable units increased by 4 percent compared to the same month the previous year.
Sales during the period 1–24 January 2012 increased by 12 percent in local currencies compared to the same period last year.
The stock-in-trade as of 30 November 2011 was slightly higher than planned and contained more winter garments compared to the same time the previous year due to the unseasonable warm autumn. The company's view is that this will likely lead to somewhat increased markdowns in relation to sales in the first quarter 2011/2012 compared to the same quarter the previous year.
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 any surplus liquidity is also distributed.
The Board of Directors has decided to propose a dividend of SEK 9.50 per share (9.50) to the 2012 Annual General Meeting corresponding to 99 percent (84) of the profit 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.
The Annual General Meeting 2012 will be held on Thursday 3 May, at 3 pm in Victoriahallen, at the Stockholm International Fairs.
The Annual Report and the Corporate Governance Report are expected to be published on 29 March 2012 on www.hm.com and will be sent out by post to shareholders that have so requested and will also be available at the company's head office.
The Group applies the 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 2009/2010 which is described in Note 1 – Accounting principles.
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.
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 fashion, weather situations, changes in consumer behaviour, climate changes, trade interventions, external factors in production countries and foreign currency, but also in connection with expansion into new markets, the launch of new concepts and how the brand is managed.
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 2009/2010. There were no significant changes in risks and uncertainties during the period.
Return on equity: Profit for the year in relation to average shareholders' equity.
Return on capital employed: Profit after financial items plus interest expense in relation to average shareholders' equity plus average interest-bearing liabilities.
Share of risk-bearing capital: Shareholders' equity plus deferred tax liability in relation to the balance sheet total.
Equity/assets ratio: Shareholders' equity in relation to the balance sheet total.
Equity per share: Shareholders' equity divided by number of shares.
P/E ratio: Price per share divided by earnings per share.
Comparable units: Comparable units comprise the stores and the internet and catalogue sales countries that have been in operation for at least one financial year. H&M's financial year is from 1 December to 30 November.
All figures within parenthesis refer to the corresponding period or point of time the previous year.
| 29 March 2012 | The Annual Report 2011 to be published |
|---|---|
| 29 March 2012 | Three-month report, 1 December 2011 – 29 February 2012 |
| 3 May 2012 | Annual General Meeting 2012, Victoriahallen, at the Stockholm International Fairs at 3 p.m. |
| 20 June 2012 | Six-month report, 1 December 2011 – 31 May 2012 |
The Full-year Report has not been audited by the company's auditors.
Stockholm, 25 January 2012 Board of Directors
The information in this Full-year 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 26 January 2012.
| Nils Vinge, IR | +46-8-796 52 50 |
|---|---|
| Jyrki Tervonen, CFO | +46-8-796 52 77 |
| Karl-Johan Persson, CEO | +46-8-796 52 33 |
| Switchboard | +46-8-796 55 00 |
H & M Hennes & Mauritz AB (publ)
SE-106 38 Stockholm
Phone: +46-8-796 55 00, 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 around 2,500 stores in 43 markets including franchise markets. In 2011, sales including VAT were SEK 128,810 million and the number of employees was more than 94,000. For further information, visit www.hm.com.
| 2011 | 2010 | Q4 2011 | Q4 2010 | |
|---|---|---|---|---|
| Sales including VAT | 128,810 | 126,966 | 36,191 | 34,792 |
| Sales excluding VAT | 109,999 | 108,483 | 30,952 | 29,711 |
| Cost of goods sold | -43,852 | -40,214 | -11,802 | -10,919 |
| GROSS PROFIT | 66,147 | 68,269 | 19,150 | 18,792 |
| Gross margin, % | 60.1 | 62.9 | 61.9 | 63.2 |
| Selling expenses | -42,517 | -40,751 | -11,629 | -10,942 |
| Administrative expenses | -3,251 | -2,859 | -856 | -790 |
| OPERATING PROFIT | 20,379 | 24,659 | 6,665 | 7,060 |
| Operating margin, % | 18.5 | 22.7 | 21.5 | 23.8 |
| Interest income | 568 | 356 | 138 | 122 |
| Interest expense | -5 | -7 | -1 | -4 |
| PROFIT AFTER FINANCIAL ITEMS | 20,942 | 25,008 | 6,802 | 7,178 |
| Tax | -5,121 | -6,327 | -1,445 | -1,691 |
| PROFIT FOR THE PERIOD | 15,821 | 18,681 | 5,357 | 5,487 |
All profit is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.
| Earnings per share, SEK* | 9.56 | 11.29 | 3.24 | 3.32 |
|---|---|---|---|---|
| Number of shares, thousands* | 1,655,072 | 1,655,072 | 1,655,072 | 1,655,072 |
| Depreciation, total | 3,262 | 3,061 | 797 | 729 |
| of which cost of goods sold | 366 | 336 | 89 | 79 |
| of which selling expenses | 2,698 | 2,540 | 661 | 608 |
| of which administrative expenses | 198 | 185 | 47 | 42 |
* Before and after dilution. The number of shares has been adjusted for all periods because of the two-for-one share split carried out by H&M in 2010.
| 2011 | 2010 | Q4 2011 | Q4 2010 | |
|---|---|---|---|---|
| PROFIT FOR THE PERIOD | 15,821 | 18,681 | 5,357 | 5,487 |
| Other comprehensive income | ||||
| Translation differences | -35 | -2,169 | 272 | -879 |
| Change in hedging reserves | -113 | 386 | 417 | 286 |
| Tax attributable to other comprehensive income | 30 | -100 | -108 | -74 |
| OTHER COMPREHENSIVE INCOME | -118 | -1,883 | 581 | -667 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 15,703 | 16,798 | 5,938 | 4,820 |
All comprehensive profit is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.
30 November
| ASSETS | 2011 | 2010 |
|---|---|---|
| FIXED ASSETS | ||
| Intangible fixed assets | ||
| Brands | 302 | 349 |
| Customer relations | 84 | 97 |
| Leasehold rights | 585 | 688 |
| Goodwill | 64 | 64 |
| 1,035 | 1,198 | |
| Tangible fixed assets | ||
| Buildings and land | 804 | 656 |
| Equipment, tools, fixture and fittings | 16,589 | 14,813 |
| 17,393 | 15,469 | |
| Long-term receivables | 608 | 518 |
| Deferred tax receivables | 1,234 | 1,065 |
| TOTAL FIXED ASSETS | 20,270 | 18,250 |
| CURRENT ASSETS | ||
| Stock-in-trade | 13,819 | 11,487 |
| Current receivables | ||
| Accounts receivables | 2,337 | 2,258 |
| Other receivables | 1,375 | 1,453 |
| Prepaid expenses | 1,110 | 876 |
| 4,822 | 4,587 | |
| Short-term investments | 6,958 | 8,167 |
| Liquid funds | 14,319 | 16,691 |
| TOTAL CURRENT ASSETS | 39,918 | 40,932 |
| TOTAL ASSETS | 60,188 | 59,182 |
30 November
| EQUITY AND LIABILITIES | 2011 | 2010 |
|---|---|---|
| EQUITY | ||
| Share capital | 207 | 207 |
| Reserves | -487 | -369 |
| Retained earnings | 28,563 | 25,653 |
| Profit for the year | 15,821 | 18,681 |
| TOTAL EQUITY | 44,104 | 44,172 |
| Long-term liabilities* | ||
| Provisions for pensions | 377 | 257 |
| Deferred tax liabilities | 950 | 906 |
| 1,327 | 1,163 | |
| Current liabilities** | ||
| Accounts payable | 4,307 | 3,965 |
| Tax liabilities | 1,851 | 2,304 |
| Other liabilities | 2,428 | 2,202 |
| Accrued expenses and prepaid income | 6,171 | 5,376 |
| 14,757 | 13,847 | |
| TOTAL LIABILITIES | 16,084 | 15,010 |
| TOTAL EQUITY AND LIABILITIES | 60,188 | 59,182 |
| Pledged assets and contingent liabilities | - | - |
* Only pension liabilities are interest-bearing.
** No current liabilities are interest-bearing.
Since there are no minority interests, all shareholders' equity is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.
| SHARE TRANSLATION | HEDGINGS | RETAINED | TOTAL | ||
|---|---|---|---|---|---|
| CAPITAL | EFFECTS | RESERVES | EARNINGS SHAREHOLDERS' | ||
| EQUITY | |||||
| Shareholders' equity, 1 December 2010 | 207 | -613 | 244 | 44,334 | 44,172 |
| Adjuistment of opening balance* | - | - | - | -48 | -48 |
| 207 | -613 | 244 | 44,286 | 44,124 | |
| Profit for the year | - | - | - | 15,821 | 15,821 |
| Other comprehensive income | |||||
| Translation differences | - | -35 | - | - | -35 |
| Change in hedging reserves | |||||
| Reported in other comprehensive income | - | - | -368 | - | -368 |
| Transfer to income statement | - | - | 255 | - | 255 |
| Tax attributable to hedging reserves | - | - | 30 | - | 30 |
| Other comprehensive income | - | -35 | -83 | - | -118 |
| Total comprehensive income | - | -35 | -83 | 15,821 | 15,703 |
| Dividend | - | - | - | -15,723 | -15,723 |
| Shareholders' equity, 30 November 2011 | 207 | -648 | 161 | 44,384 | 44,104 |
* Adjustment of pension obligations related to prior years.
| SHARE TRANSLATION | HEDGINGS | RETAINED | TOTAL | ||
|---|---|---|---|---|---|
| CAPITAL | EFFECTS | RESERVES | EARNINGS SHAREHOLDERS' | ||
| EQUITY | |||||
| Shareholders' equity, 1 December 2009 | 207 | 1,556 | -42 | 38,892 | 40,613 |
| Profit for the year | - | - | - | 18,681 | 18,681 |
| Other comprehensive income | |||||
| Translation differences | - | -2,169 | - | - | -2,169 |
| Change in hedging reserves | |||||
| Reported in other comprehensive income | - | - | 1,378 | - | 1,378 |
| Transfer to income statement | - | - | -992 | - | -992 |
| Tax attributable to other comprehensive income | - | - | -100 | - | -100 |
| Other comprehensive income | - | -2,169 | 286 | - | -1,883 |
| Total comprehensive income | - | -2,169 | 286 | 18,681 | 16,798 |
| Dividend | - | - | - | -13,239 | -13,239 |
| Shareholders' equity, 30 November 2010 | 207 | -613 | 244 | 44,334 | 44,172 |
1 December - 30 November
| 2011 | 2010 | |
|---|---|---|
| Current operations | ||
| Profit after financial items* | 20,942 | 25,008 |
| Provisions for pensions | 120 | 3 |
| Depreciation | 3,262 | 3,061 |
| Tax paid | -5,666 | -5,451 |
| Cash flow from current operations before changes | 18,658 | 22,621 |
| in working capital | ||
| Cash flow from changes in working capital | ||
| Current receivables | -244 | -778 |
| Stock-in-trade | -2,331 | -1,557 |
| Current liabilities | 1,337 | 1,552 |
| CASH FLOW FROM CURRENT OPERATIONS | 17,420 | 21,838 |
| Investment activities | ||
| Investment in leasehold rights | -71 | -147 |
| Investment in/sale of buildings and land | -157 | -209 |
| Investment in fixed assets | -4,946 | -4,603 |
| Adjustment of consideration/acquistion of subsidiaries | - | -8 |
| Change in short-term investments, 4 - 12 months | 1,209 | -5,166 |
| Other investments | -91 | 4 |
| CASH FLOW FROM INVESTMENT ACTIVITIES | -4,056 | -10,129 |
| Financing activities | ||
| Dividend | -15,723 | -13,239 |
| CASH FLOW FROM FINANCING ACTIVITIES | -15,723 | -13,239 |
| CASH FLOW FOR THE YEAR | -2,359 | -1,530 |
| Liquid funds at beginning of the financial year | 16,691 | 19,024 |
| Cash flow for the year | -2,359 | -1,530 |
| Exchange rate effect | -13 | -803 |
| Liquid funds at end of the financial year** | 14,319 | 16,691 |
* Interest paid for the Group amounts to SEK 5 m (7).
Received interest for the Group amounts to SEK 568 m (356).
** Liquid funds and short-term investments at the end of the financial year amounted to SEK 21,277 m (24,858).
Full-year 1 December - 30 November
| SEK m | SEK m | Change in % | No. of stores | New | Closed | ||
|---|---|---|---|---|---|---|---|
| COUNTRY | 2011 | 2010 | SEK | Local currency |
30 Nov 2011 | stores | stores |
| Sweden | 8,318 | 8,365 | -1 | -1 | 173 | 9 | 4 |
| Norway | 5,397 | 5,858 | -8 | -5 | 104 | 4 | 1 |
| Denmark | 4,195 | 4,358 | -4 | 3 | 90 | 4 | 1 |
| United Kingdom | 9,227 | 8,392 | 10 | 19 | 213 | 26 | 5 |
| Switzerland | 5,995 | 6,122 | -2 | -7 | 80 | 5 | |
| Germany | 29,721 | 30,628 | -3 | 4 | 394 | 23 | 6 |
| Netherlands | 6,995 | 7,387 | -5 | 1 | 118 | 7 | 1 |
| Belgium | 3,157 | 3,345 | -6 | 1 | 66 | 6 | 4 |
| Austria | 4,793 | 5,255 | -9 | -2 | 66 | 1 | 1 |
| Luxembourg | 385 | 406 | -5 | 1 | 10 | ||
| Finland | 2,379 | 2,567 | -7 | -1 | 47 | 5 | 1 |
| France | 9,336 | 9,140 | 2 | 9 | 168 | 18 | 1 |
| USA | 9,691 | 8,916 | 9 | 21 | 233 | 26 | 1 |
| Spain | 5,828 | 6,109 | -5 | 2 | 132 | 11 | 1 |
| Poland | 2,747 | 2,668 | 3 | 12 | 89 | 13 | |
| Czech Republic | 722 | 707 | 2 | 6 | 24 | 2 | |
| Portugal | 899 | 937 | -4 | 3 | 23 | 2 | |
| Italy | 4,410 | 4,331 | 2 | 9 | 87 | 15 | |
| Canada | 2,774 | 2,713 | 2 | 8 | 58 | 3 | |
| Slovenia | 500 | 568 | -12 | -6 | 12 | 1 | |
| Ireland | 514 | 517 | -1 | 7 | 15 | 3 | |
| Hungary | 496 | 387 | 28 | 38 | 20 | 5 | |
| Slovakia | 254 | 225 | 13 | 21 | 10 | 3 | |
| Greece | 764 | 646 | 18 | 27 | 22 | 6 | 2 |
| China | 3,598 | 2,527 | 42 | 55 | 82 | 35 | |
| Japan | 1,549 | 1,794 | -14 | -12 | 15 | 5 | |
| Russia | 1,512 | 916 | 65 | 78 | 19 | 8 | |
| South Korea | 410 | 255 | 61 | 69 | 6 | 4 | |
| Turkey | 309 | 28 | 1,004 | 1,254 | 8 | 7 | |
| Romania | 331 | 11 | 11 | ||||
| Croatia | 264 | 6 | 6 | ||||
| Singapore | 111 | 1 | 1 | ||||
| Franchise | 1,229 | 899 | 37 | 57 | 70 | 21 | 1 |
| Total | 128,810 | 126,966 | 1 | 8 | 2,472 | 296 | 30 |
| SEK m | SEK m | Change in % | No. of stores | New | Closed | ||
|---|---|---|---|---|---|---|---|
| COUNTRY | Q4-2011 | Q4-2010 | SEK | Local currency |
30 Nov 2011 | stores | stores |
| Sweden | 2,120 | 2,179 | -3 | -3 | 173 | 4 | 1 |
| Norway | 1,464 | 1,533 | -5 | -6 | 104 | 2 | |
| Denmark | 1,156 | 1,178 | -2 | 0 | 90 | 2 | |
| United Kingdom | 2,731 | 2,438 | 12 | 16 | 213 | 14 | |
| Switzerland | 1,601 | 1,661 | -4 | -10 | 80 | 4 | |
| Germany | 8,132 | 8,210 | -1 | 1 | 394 | 12 | 4 |
| Netherlands | 1,921 | 2,032 | -5 | -4 | 118 | 4 | 1 |
| Belgium | 839 | 882 | -5 | -3 | 66 | 3 | 1 |
| Austria | 1,354 | 1,419 | -5 | -3 | 66 | 1 | 1 |
| Luxembourg | 105 | 108 | -3 | -1 | 10 | ||
| Finland | 612 | 641 | -5 | -3 | 47 | 4 | 1 |
| France | 2,659 | 2,566 | 4 | 6 | 168 | 11 | 1 |
| USA | 2,879 | 2,528 | 14 | 19 | 233 | 14 | |
| Spain | 1,538 | 1,598 | -4 | -2 | 132 | 6 | |
| Poland | 761 | 722 | 5 | 17 | 89 | 7 | |
| Czech Republic | 207 | 199 | 4 | 7 | 24 | ||
| Portugal | 225 | 239 | -6 | -4 | 23 | ||
| Italy | 1,287 | 1,312 | -2 | 1 | 87 | 10 | |
| Canada | 784 | 761 | 3 | 6 | 58 | 2 | |
| Slovenia | 143 | 158 | -9 | -7 | 12 | ||
| Ireland | 146 | 141 | 4 | 7 | 15 | 1 | |
| Hungary | 146 | 123 | 19 | 31 | 20 | 4 | |
| Slovakia | 78 | 67 | 16 | 20 | 10 | 3 | |
| Greece | 209 | 181 | 15 | 18 | 22 | 2 | 2 |
| China | 1,157 | 770 | 50 | 53 | 82 | 21 | |
| Japan | 536 | 496 | 8 | 6 | 15 | 3 | |
| Russia | 415 | 287 | 45 | 52 | 19 | 3 | |
| South Korea | 134 | 93 | 44 | 44 | 6 | 1 | |
| Turkey | 108 | 28 | 286 | 388 | 8 | 3 | |
| Romania | 138 | 11 | 5 | ||||
| Croatia | 139 | 6 | 3 | ||||
| Singapore | 111 | 1 | 1 | ||||
| Franchise | 356 | 242 | 47 | 60 | 70 | 10 | 1 |
| Total | 36,191 | 34,792 | 4 | 6 | 2,472 | 160 | 13 |
15
* Before and after dilution. The number of shares has been adjusted for all periods because of the two-for-one share split carried out by H&M in 2010.
** Proposed by the Board of Directors.
Definition on key figures see page 7.
| 2009 | 2010 | 2011 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q 1 | Q 2 | Q 3 | Q 4 | Q 1 | Q 2 | Q 3 | Q 4 | Q 1 | Q 2 | Q 3 | Q 4 | |
| Sales including VAT, SEK m | 27,282 | 31,070 | 27,587 | 32,758 29,095 | 31,604 | 31,475 | 34,792 | 28,708 | 32,400 | 31,511 | 36,191 | |
| Sales excluding VAT, SEK m | 23,299 | 26,538 | 23,545 | 28,011 24,846 | 27,033 | 26,893 | 29,711 | 24,503 | 27,632 | 26,912 | 30,952 | |
| Change from previous year, % | 18 | 23 | 13 | 6 | 7 | 2 | 14 | 6 | -1 | 2 | 0 | 4 |
| Operating profit, SEK m | 3,364 | 5,671 | 4,700 | 7,909 | 4,978 | 6,965 | 5,656 | 7,060 | 3,408 | 5,599 | 4,707 | 6,665 |
| Operating margin, % | 14.4 | 21.4 | 20.0 | 28.2 | 20.0 | 25.8 | 21.0 | 23.8 | 13.9 | 20.3 | 17.5 | 21.5 |
| Depreciation for the period, SEK m | 721 | 715 | 722 | 672 | 772 | 783 | 777 | 729 | 808 | 826 | 831 | 797 |
| Profit after financial items, SEK m | 3,554 | 5,784 | 4,773 | 7,992 | 5,055 | 7,040 | 5,735 | 7,178 | 3,538 | 5,752 | 4,850 | 6,802 |
| Profit after tax, SEK m | 2,577 | 4,193 | 3,460 | 6,154 | 3,741 | 5,209 | 4,244 | 5,487 | 2,618 | 4,257 | 3,589 | 5,357 |
| Liquid assets*, SEK m | 23,625 | 14,904 | 16,238 | 22,025 26,200 | 18,992 | 21,362 | 24,858 | 24,355 | 15,207 | 16,895 | 21,277 | |
| Stock-in-trade, SEK m | 9,052 | 8,601 | 10,215 | 10,240 | 8,402 | 8,562 | 10,545 | 11,487 | 10,822 | 10,414 | 13,310 | 13,819 |
| Equity, SEK m | 41,043 | 31,644 | 34,612 | 40,613 43,746 | 36,064 | 39,352 | 44,172 | 45,587 | 33,946 | 38,214 | 44,104 | |
| Earnings per share, SEK** | 1.56 | 2.53 | 2.09 | 3.72 | 2.26 | 3.15 | 2.56 | 3.32 | 1.58 | 2.57 | 2.17 | 3.24 |
| Equity per share, SEK** | 24.80 | 19.12 | 20.91 | 24.54 | 26.43 | 21.79 | 23.78 | 26.69 | 27.54 | 20.51 | 23.09 | 26.65 |
| Cash flow from current operations per share, SEK** |
0.74 | 3.60 | 1.91 | 4.60 | 3.25 | 4.30 | 2.23 | 3.42 | 0.46 | 4.70 | 1.62 | 3.75 |
| Share of risk-bearing capital, % | 77.9 | 74.8 | 76.2 | 78.5 | 80.8 | 75.9 | 75.8 | 76.2 | 81.4 | 73.0 | 72.9 | 74.9 |
| Equity/assets ratio, % | 74.6 | 71.0 | 72.8 | 74.7 | 77.2 | 71.8 | 72.3 | 74.6 | 79.9 | 71.3 | 71.4 | 73.3 |
| Total number of stores | 1,748 | 1,822 | 1,840 | 1,988 | 1,992 | 2,062 | 2,078 | 2,206 | 2,212 | 2,297 | 2,325 | 2,472 |
| Rolling 12 months | ||||||||||||
| Earnings per share, SEK** | 9.02 | 9.18 | 9.26 | 9.90 | 10.61 | 11.22 | 11.69 | 11.29 | 10.61 | 10.03 | 9.64 | 9.56 |
| Return on shareholders' equity, % | 39.4 | 51.6 | 46.8 | 42.2 | 41.4 | 54.8 | 52.3 | 44.1 | 39.3 | 47.4 | 41.1 | 35.8 |
| Return on capital employed, % | 54.3 | 70.9 | 64.5 | 56.7 | 55.4 | 72.9 | 69.3 | 58.7 | 52.3 | 63.0 | 54.6 | 47.1 |
| Stock-in-trade in % of turnover | 9.8 | 8.9 | 10.2 | 10.1 | 8.2 | 8.3 | 9.9 | 10.6 | 10.0 | 9.6 | 12.2 | 12.6 |
* Liquid funds and short-term investments
** Before and after dilution. The number of shares has been adjusted for all periods because of the two-for-one share split carried out by H&M in 2010.
Definitions on key figures see page 7.
| 2011 | 2010 | |
|---|---|---|
| Nordic region | ||
| External net sales | 16,343 | 17,023 |
| Operating profit | 614 | 966 |
| Operating margin, % | 3.8 | 5.7 |
| Assets excluding tax receivables | 6,301 | 6,076 |
| Liabilities excluding tax liabilities | 1,496 | 1,562 |
| Investments | 344 | 393 |
| Depreciation | 303 | 276 |
| Eurozone excluding Finland | ||
| External net sales | 56,687 | 58,412 |
| Operating profit | 1,486 | 3,011 |
| Operating margin, % | 2.6 | 5.2 |
| Assets excluding tax receivables | 17,598 | 16,178 |
| Liabilities excluding tax liabilities | 3,556 | 3,403 |
| Investments | 1,796 | 1,988 |
| Depreciation | 1,450 | 1,433 |
| Rest of the World | ||
| External net sales | 36,969 | 33,048 |
| Operating profit | 2,989 | 2,038 |
| Operating margin, % | 8.1 | 6.2 |
| Assets excluding tax receivables | 15,202 | 12,248 |
| Liabilities excluding tax liabilities | 3,110 | 2,508 |
| Investments | 2,543 | 2,000 |
| Depreciation | 1,274 | 1,141 |
| Group Functions | ||
| Net sales to other segments | 59,778 | 58,641 |
| Operating profit | 15,290 | 18,644 |
| Operating margin, % | 25.6 | 31.8 |
| Assets excluding tax receivables | 19,853 | 23,615 |
| Liabilities excluding tax liabilities | 5,121 | 4,327 |
| Investments | 491 | 578 |
| Depreciation | 235 | 211 |
| Eliminations | ||
| Net sales to other segments | -59,778 | -58,641 |
| Total | ||
| External net sales | 109,999 | 108,483 |
| Operating profit | 20,379 | 24,659 |
| Operating margin, % | 18.5 | 22.7 |
| Assets excluding tax receivables | 58,954 | 58,117 |
| Liabilities excluding tax liabilities | 13,283 | 11,800 |
| Investments | 5,174 | 4,959 |
| Depreciation | 3,262 | 3,061 |
| 2011 | 2010 | |
|---|---|---|
| External sales excluding VAT | 24 | 6 |
| Internal sales excluding VAT* | 6,958 | 6,900 |
| GROSS PROFIT | 6,982 | 6,906 |
| Selling expenses | -2,235 | -2,240 |
| Administrative expenses | -2,671 | -2,024 |
| OPERATING PROFIT | 2,076 | 2,642 |
| Dividend from subsidiaries | 14,224 | 12,153 |
| Interest income | 151 | 73 |
| Interest expense | 0 | 0 |
| PROFIT AFTER FINANCIAL ITEMS | 16,451 | 14,868 |
| Year-end appropriations | -9 | 705 |
| Tax | -596 | -912 |
| PROFIT FOR THE YEAR | 15,846 | 14,661 |
* Includes royalty received from Group companies.
| Other comprehensive income TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
- 15,846 |
- 14,661 |
|---|---|---|
| PROFIT FOR THE YEAR | 15,846 | 14,661 |
| 2011 | 2010 |
30 November
| ASSETS | 2011 | 2010 |
|---|---|---|
| FIXED ASSETS | ||
| Tangible fixed assets | ||
| Buildings and land | 45 | 48 |
| Equipment, tools, fixture and fittings | 396 | 369 |
| 441 | 417 | |
| Financial fixed assets | ||
| Shares and participation rights | 590 | 580 |
| Receivables from subsidiaries | 1,177 | 1,208 |
| Long-term receivables | 13 | 14 |
| Deferred tax receivables | 63 | 59 |
| 1,843 | 1,861 | |
| TOTAL FIXED ASSETS | 2,284 | 2,278 |
| CURRENT ASSETS | ||
| Current receivables | ||
| Receivables from subsidiaries | 10,628 | 7,764 |
| Other receivables | 33 | 14 |
| Prepaid expenses | 14 | 9 |
| 10,675 | 7,787 | |
| Short-term investments | 5,038 | 8,167 |
| Liquid funds | 678 | 223 |
| TOTAL CURRENT ASSETS | 16,391 | 16,177 |
| TOTAL ASSETS | 18,675 | 18,455 |
| 2011 | 2010 | |
|---|---|---|
| EQUITY | ||
| Restricted equity | ||
| Share capital | 207 | 207 |
| Restricted reserves | 88 | 88 |
| 295 | 295 | |
| Non-restricted equity | ||
| Retained earnings | 903 | 1,965 |
| Profit for the year | 15,846 | 14,661 |
| 16,749 | 16,626 | |
| TOTAL EQUITY | 17,044 | 16,921 |
| UNTAXED RESERVES | 128 | 119 |
| Long-term liabilities | ||
| Provisions for pensions | 240 | 223 |
| Current liabilities* | ||
| Accounts payable | 212 | 128 |
| Liabilities to subsidiaries | - | 129 |
| Tax liabilities | 445 | 368 |
| Other liabilities | 348 | 340 |
| Accrued expenses and prepaid income | 258 | 227 |
| 1,263 | 1,192 | |
| TOTAL LIABILITIES | 1,503 | 1,415 |
| TOTAL EQUITY AND LIABILITIES | 18,675 | 18,455 |
| Pledged assets | - | - |
| Contingent liabilities | 9,321 | 12,729 |
* No current liabilities are interest-bearing.
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