H&M Hennes & Mauritz

Earnings Release • Jan 28, 2016

H & M Hennes & Mauritz AB

Full-year report

Full-year (1 December 2014 — ³⁰ Nov 2015)

• Well-received collections for all brands in the H&M group resulted in good sales of SEK 210 billion including VAT and increased market share.
• The H&M group's sales excluding VAT increased by 19 percent to SEK 180,861 m (151,419) during the financial year. In local currencies the increase was 11 percent.
• Gross profit increased by 16 percent to SEK 103,167 m (89,052). This corresponds to a gross margin of 57.0 percent (58.8).
• Profit after financial items increased by SEK 1.3 billion and amounted to SEK 27,242 m (25,895), an increase of 5 percent. The group's profit after tax increased to SEK 20,898 m (19,976), corresponding to SEK 12.63 (12.07) per share, an increase of 5 percent.
• The profit increase for 2015 has led to SEK 75 m being allocated to the H&M Incentive Program (HIP), which is for all employees.
• Very strong expansion during the year with a total net addition of 413 (379) new stores and ten new online markets. At the end of the financial year H&M had 23 online markets and the number of stores amounted to 3,924 in 61 markets.
• More than 16,000 new jobs were created in the H&M group in 2015. The number of employees amounted to more than 148,000 (132,000) at the end of the year.

Fourth quarter (1 September ²⁰¹⁵— 30 Nov 2015)

• The H&M group's sales in SEK excluding VAT increased by 14 percent to SEK 48,694 m (42,644) during the fourth quarter. In local currencies the increase was 9 percent.
• Gross profit amounted to SEK 27,997 m (25,744), an increase of 9 percent. This corresponds to a gross margin of 57.5 percent (60.4).
• Profit after financial items amounted to SEK 7,148 m (7,799). The group's profit after tax amounted to SEK 5,526 m (6,222), corresponding to SEK 3.34 (3.76) per share. Profits in the quarter were negatively affected by substantially higher purchasing costs due to the strengthened US dollar.
• Very good start for H&M's first stores in India, New Delhi and in South Africa, Cape Town.
• The Board of Directors proposes a dividend of SEK 9.75 (9.75) per share for the 2014/2015 financial year.
• Sales including VAT in December 2015 increased by 10 percent in local currencies compared to the corresponding month the previous year.
• Sales including VAT in January 2016 are expected to increase by 7 percent in local currencies compared to the same month last year.
• 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. In addition, H&M plans to offer e-commerce in a further nine existing H&M markets.

+19 % Sales increase in 2015

3,924 stores in 61 markets

H&M Ladies Spring 2016.

Comments by Karl-Johan Persson, CEO

"2015 has been a very expansive year for the H&M group. We have opened 413 new stores net, of which 249 in the fourth quarter, as well as ten new H&M online markets and we have successfully established stores in our new markets of India, South Africa, Peru, Taiwan and Macau. In total, we now have stores in 61 markets and offer online sales in 23 of these.

Sales have developed well for all our brands: H&M, H&M Home, COS, & Other Stories, Weekday, Monki and Cheap Monday. During the year sales totalled SEK 210 billion including VAT, which is an increase of 19 percent in SEK. In local currencies the increase was 11 percent. Profit for the year after tax increased to SEK 20.9 billion, which is our highest result to date - this despite the fact that the strong US dollar exchange rate has made our purchasing much more expensive.

Our employees are doing a fantastic job and are decisive for our success. The increase in the financial result for the year means that SEK 75 m has been allocated to the H&M Incentive Program (HIP), which is for all employees in the H&M group. The accumulated value to an employee who has been in the programme since it started five years ago amounts to approximately SEK 45,000 per person*. In 2015 we created 16,000 new jobs within the H&M group and we are now more than 148,000 employees and we plan to employ further thousands of new employees in 2016 since our strong expansion continues.

Our growth target of increasing the number of stores by 10-15 percent per year with continued high profitability remains intact, In 2016 we plan to open 425 new stores net and open H&M stores in three new markets: New Zealand, Cyprus and Puerto Rico. In addition, H&M plans to offer ecommerce in a further nine existing H&M markets. These countries are Ireland, Japan, Greece, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg. We are very pleased with the continued strengthening of our online customer offering and developments within our online operations.

We operate in an industry that is exposed to a lot of competition and are therefore constantly working to develop our customer offering within our different brands which are all based on the idea of giving customers the best combination of fashion, quality, price and sustainability – from each brand's unique identity. Among other things, we are making substantial long-term investments in order to grasp the opportunities coming from the increased digitalization. In addition, we are also continuing to broaden the product range further as well as adding more brands to the group. One example of broadening our range is the successful launch of H&M Beauty, which is now in 900 stores in 41 markets and which will continue to be rolled out to a further 300 stores in 2016.

Sustainability is something that concerns us all and at H&M we have been working on these matters for a long time. We have made lots of improvements and are constantly working on how to improve even further to meet the challenges that we and our industry are facing. A specific example of what we have achieved in 2015 is that we have switched to 100 percent renewable energy in all markets where this is possible. For the group as a whole, this means that around 80 percent of all the energy that we use globally comes from renewable sources; in 2014 this figure was 27 percent. We have also increased the proportion of cotton that comes from sustainable sources, which now represents 31 percent of our total cotton usage (21 percent in 2014). Our goal is that all cotton in our product range will come from sustainable sources by 2020 at the latest.

We closely follow developments in the market in each country where we are present. For 2016 we see many opportunities, but are also well aware of the challenges that exist. We firmly believe that our customer offering and our investments will lead to increased market share and strengthen H&M's position even further in 2016."

	Q4	Q4	Full year	Full year
SEK m	2015	2014	2015	2014
Net sales	48,694	42,644	180,861	151,419
Gross profit	27,997	25,774	103,167	89,052
gross margin, %	57.5	60.4	57.0	58.8
Operating profit	7,084	7,731	26,942	25,583
operating margin, %	14.5	18.1	14.9	16.9
Net financial items	64	68	300	312
Profit after financial items	7,148	7,799	27,242	25,895
Tax	-1,622	-1,577	-6,344	-5,919
Profit for the period	5,526	6,222	20,898	19,976
Earnings per share, SEK	3.34	3.76	12.63	12.07

* This figure is the amount for a full-time employee in Sweden before this year's allocation. For employees in other countries the figure will vary depending on tax and social security costs in each country. Any tax due on payout has not been deducted from this figure.

Opening of the first H&M store in India.

"2015 has been a very expansive year for the H&M group. We have opened 413 new stores net and added ten new online markets. For 2016 we plan to open 425 new stores net and to extend e-commerce to a further nine existing H&M markets."

Sales

Well-received collections for all brands and continued strong expansion led to increased sales and continued market share gains for the H&M group in a fashion retail market that in many countries was still characterised by a challenging macroeconomic situation.

Sales in the fourth quarter were good in September and October, but in November sales were negatively affected by the unseasonably mild weather in many of the H&M group's large European sales markets and in North America.

Sales including VAT converted into SEK increased by 14 percent to SEK 56,477 m (49,656) in the fourth quarter. Sales including VAT increased by 19 percent in the 2015 financial year and amounted to SEK 209,921 m (176,620).

Sales excluding VAT increased by 14 percent to SEK 48,694 m (42,644) in the fourth quarter and by 19 percent to SEK 180,861 m (151,419) in the 2015 financial year.

In local currencies sales including VAT increased by 9 percent in the fourth quarter and by 11 percent during the 2015 financial year.

The substantial difference between the sales increase in SEK and in local currencies is due to the weakness of the Swedish krona against most sales currencies in the group compared to the same period last year.

Currency translation effects arise when sales 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 if the Swedish krona strengthens.

Sales in top ten markets, full-year

	2015	2014	Change in %				30 Nov - 15	2015
	SEK m	SEK m	SEK	Local	Number of	New stores
	Inc. VAT	Inc. VAT		currency	stores	(net)
Germany	36,943	34,950	6	2	449	9
USA	25,135	17,278	45	18	415	59
United Kingdom	16,001	12,993	23	8	264	11
France	13,579	12,321	10	7	222	17
China	10,559	7,495	41	16	353	83
Sweden	9,495	8,923	6	6	176	0
Italy	8,644	7,140	21	17	150	18
Spain	7,736	6,748	15	11	165	6
Netherlands	7,521	7,320	3	-1	139	4
Switzerland	6,844	5,951	15	-2	96	3
Others*	67,464	55,501	22	18	1,495	203
Total	209,921	176,620	19	11	3,924	413
* Whereof franchise	4,494	2,947	52	28	156	26

During 2015 H&M switched to using 100 percent renewable energy in all the markets where this is possible.

Gross profit SEK m

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 Ladies

Gross profit increased by 9 percent to SEK 27,997 m (25,774) in the fourth quarter, corresponding to a gross margin of 57.5 percent (60.4). For the financial year, gross profit increased by 16 percent to SEK 103,167 m (89,052), corresponding to a gross margin of 57.0 percent (58.8).

Markdowns in relation to sales increased by 0.5 percentage points in the fourth quarter 2015 compared to the corresponding quarter in 2014, mostly due to increased price activities in November.

Overall, the market situation as regards external factors such as raw material prices, cost inflation, capacity at suppliers, purchasing currencies and transportation costs has continued to be negative during the purchasing period for the fourth quarter compared to the corresponding purchasing period the previous year, mostly due to the impact of the stronger US dollar on purchasing costs.

For the first quarter 2016 the strong US dollar will have the same significant negative impact on purchasing costs as for the fourth quarter 2015. Thereafter the negative impact is expected to gradually diminish with effect from the second quarter 2016.

Selling and administration expenses

Cost control in the group remains good. For the fourth quarter of 2015, selling and administrative expenses increased by 16 percent in SEK and 12 percent in local currencies compared to the fourth 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.

Selling and administration expenses for the full-year increased by 20 percent in SEK and by 12 percent in local currencies.

COS flagship store in Pangyo, South Korea.

Profit after financial items

Profit after financial items in the fourth quarter amounted to SEK 7,148 m (7,799). For the financial year, profit after financial items increased to SEK 27,242 m (25,895), an increase of 5 percent.

Profits for the fourth quarter are mostly explained by the strong US dollar effect on purchasing costs and by the unseasonably mild weather in November in many of the group's large European sales markets and in North America, which led to weaker sales than planned and increased markdowns.

Costs for long-term investments increased in the fourth quarter by approximately SEK 150 m compared to the corresponding quarter the previous year and increased for full-year 2015 by approximately SEK 600 m compared to 2014. These long-term investments aim to further strengthen the H&M group's market position and secure future expansion. The investments are continuing in 2016 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.

The allocation to the H&M Incentive Program (HIP) is based on 10 percent of the increase in the company's profit after tax between two consecutive financial years (before the contribution to HIP). The allocation must be invested in H&M shares. The amount allocated for the year was SEK 75 m (303). The allocation was expensed in the fourth quarter 2015 and thus affected profit before tax by SEK 75 m (303) and profit after tax by SEK 57 m (230).

Stock-in-trade

H&M Sport is now available in more than 2,400 H&M stores and the rollout continues.

Stock-in-trade amounted to SEK 24,833 m (19,403), an increase of 28 percent in SEK and 26 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, but also to the group's expansion through stores and online and the warm autumn's negative effect on sales of winter garments. The stock-in-trade as per 30 November 2015 therefore contains a larger volume of winter garments than planned, which is expected to result in costs for markdowns increasing by 1 to 2 percentage points in relation to sales in the first quarter of 2016 compared to the corresponding quarter of 2015. 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 13.7 percent (12.8) of sales excluding VAT and 28.9 percent (25.7) of total assets.

Expansion

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

H&M'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. Three new 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 currently offers online shopping in 23 markets and the global rollout of H&M's online store continues. During 2016 H&M plans to offer e-commerce in a further nine of H&M's existing markets. These countries are Ireland, Japan, Greece, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg.

The group's other brands – COS, Monki, Weekday, Cheap Monday and & Other Stories – are planned to continue expanding at the same fast rate as in 2015. The main focus of this expansion 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, 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. Also H&M Home will continue its rapid expansion, with around 60 new H&M Home departments.

Examples of ongoing long-term investments in broadening H&M's product range include H&M Sport, H&M Beauty and the extended shoe range.

H&M Beauty has got off to a very good start since its launch began in July 2015. At the end of the financial year H&M Beauty was available in around 900 stores in 41 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 care 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 300 H&M stores during 2016.

Store count by brand

In the financial year 2015, the group opened 472 (426) stores and closed 59 (47) stores, i.e. a net increase of 413 (379) new stores. The group had 3,924 (3,511) stores as of 30 November 2015, of which 156 were franchise stores.

	New Stores 2015 (Net)		Total No of stores (30 Nov)
Brand	Q4	Full year	2015	2014
H&M	207	349	3,610	3,261
COS	25	39	153	114
Monki	12	14	106	92
Weekday	0	-2	20	22
& Other Stories	5	13	30	17
Cheap Monday	0	0	5	5
Total	249	413	3,924	3,511

& Other Stories

Store count by region

	New Stores 2015 (Net)		Total No of stores (30 Nov)
Region	Q4	Full year	2015	2014
Europe & Africa	97	166	2,714	2,548
Asia & Oceania	109	167	695	528
North & South America	43	80	515	435
Total	249	413	3,924	3,511

Tax

The H&M group's final tax rate for the 2014/2015 financial year was 23.3 percent (22.9). The final outcome of the tax rate depends on the results of the group's various companies, the corporate tax rates in each country and any taxes relating to previous years. The H&M group's tax rate is expected to be approximately 22.5 – 23.5 percent for the 2015/2016 financial year. However, in the first three quarters of 2016 an estimated tax rate of 23.5 percent will be used.

Employees

The average number of employees in the group, converted into full-time positions, was 104,634 (93,351), of which 8,061 (7,489) are employed in Sweden.

Current quarter

As previously communicated, sales including VAT in December 2015 increased by 10 percent in local currencies compared to the same month the previous year.

Sales in January 2016 are expected to increase by 7 percent in local currencies compared to the same month last year. In January, there is a negative calendar effect for the group of approximately 2 percentage points due to one more Sunday compared to January 2015.

Since the stock-in-trade contains a greater volume of winter garments than planned due to the warm autumn, particularly in November, markdowns in relation to sales in the first quarter of 2016 are expected to have a negative effect on the gross margin of 1 to 2 percentage points compared to the same quarter in 2015.

Information in conjunction to coming interim reports

H&M publishes four interim reports each year: Q1/three-month report, Q2/half-year report, Q3/nine-month report and Q4/full-year report. In addition to this, over the past 15 years H&M has held press and telephone conferences in conjunction with each interim report on the reporting day.

The company has decided to continue to publish four interim reports as well as the monthly sales development reports. In future, the company will not hold a press and telephone conference in conjunction with publication of the three-month and ninemonth reports. However, the company will continue to hold press and telephone conferences in conjunction with publication of the half- and full-year reports, since these periods better reflect the company's seasons and its long-term perspective. The new routines will be introduced with the publication of the three-month report on 6 April 2016.

Dividend policy and dividend proposal

H&M's financial goals are to enable the company to continue enjoying good growth and to be ready to exploit business opportunities. It is essential that, as in the past, the expansion proceeds with a continued high degree of financial strength and continued freedom of action. Based on this policy, the board of directors has decided 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 9.75 per share (9.75) to the 2016 annual general meeting, corresponding to 77 percent (81) 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.

Extra general meeting and Annual General Meeting 2016

H&M is to hold an extraordinary general meeting at 4.30 p.m. on Tuesday 8 March 2016 on account of wishing to have the possibility of holding future annual general meetings in the Erling Persson Hall, Aula Medica, Karolinska Instiutet in Solna. In order to make this possible, the articles of association need to be amended as regards where the company is to hold its general meetings.

The 2016 annual general meeting will be held at 3 p.m on Tuesday 3 May.

Annual Report 2015

The Annual Report and the Corporate Governance Report are expected to be published on 30 March 2016 on hm.com and will be sent out by post to shareholders that have so requested. The documents will also be available at the company's head office.

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 2013/2014 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.

H&M Beauty

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 macro-economic changes, 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 2014.

Calendar

8 March 2016, at 4.30 p.m.	Extra general meeting, see information above.
6 April 2016	Three-month report, 1 Dec 2015 – 29 February 2016
3 May 2016, at 3 p.m.	Annual General Meeting 2016
22 June 2016	Six-month report, 1 Dec 2015 – 31 May 2016

Stockholm, 27 January 2016 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 28 January 2016. This full-year report, and other information about H&M, is available at www.hm.com

Contact persons

Nils Vinge, IR	+46-8-796 52 50
Karl-Johan Persson, CEO	+46-8-796 55 00 (switchboard)
Jyrki Tervonen, CFO	+46-8-796 55 00 (switchboard)

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

GROUP INCOME STATEMENT (SEK m)

	Q4	Q4	Full year	Full year
	2015	2014	2015	2014
Sales including VAT	56,477	49,656	209,921	176,620
Sales excluding VAT	48,694	42,644	180,861	151,419
Cost of goods sold	-20,697	-16,870	-77,694	-62,367
GROSS PROFIT	27,997	25,774	103,167	89,052
Gross margin, %	57.5	60.4	57.0	58.8
Selling expenses	-19,339	-16,654	-70,292	-58,525
Administrative expenses	-1,574	-1,389	-5,933	-4,944
OPERATING PROFIT	7,084	7,731	26,942	25,583
Operating margin, %	14.5	18.1	14.9	16.9
Interest income	68	78	310	328
Interest expense	-4	-10	-10	-16
PROFIT AFTER FINANCIAL ITEMS	7,148	7,799	27,242	25,895
Tax	-1,622	-1,577	-6,344	-5,919
PROFIT FOR THE PERIOD	5,526	6,222	20,898	19,976

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

Earnings per share, SEK*	3.34	3.76	12.63	12.07
Number of shares, thousands*	1,655,072	1,655,072	1,655,072	1,655,072
Depreciation, total	1,691	1,336	6,399	5,045
of which cost of goods sold	192	151	725	568
of which selling expenses	1,390	1,098	5,262	4,159
of which administrative expenses	109	87	412	318
* Before and after dilution.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK m)

	Q4 2015	Q4 2014	Full year 2015	Full year 2014
PROFIT FOR THE PERIOD	5,526	6,222	20,898	19,976
Other comprehensive income Items that have been reclassified or may be reclassified to profit or loss
Translation differences	100	656	1,514	1,979
Change in hedging reserves	462	219	245	185
Tax attributable to change in hedging reserves	-101	-52	-59	-44
Items that have not been and will not be reclassified to profit or loss
Revaluations relating to defined benefit pension plans	43	-148	43	-148
Tax attributable to the above revaluation	-11	35	-11	35
OTHER COMPREHENSIVE INCOME	493	710	1,732	2,007
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	6,019	6,932	22,630	21,983

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

GROUP BALANCE SHEET (SEK m)

ASSETS	30 Nov - 2015	30 Nov - 2014
FIXED ASSETS
Intangible fixed assets
Brands	114	161
Customer relations	32	45
Leasehold and similar rights	660	509
Capitalised expenditures	3,245	2,183
Goodwill	64	64
	4,115	2,962
Tangible fixed assets
Buildings and land	797	804
Equipment, tools, fixture and fittings	32,165	26,144
	32,962	26,948
Financial fixed assets
Long-term receivables	862	709
Deferred tax receiveables	2,338	2,237
	3,200	2,946
TOTAL FIXED ASSETS	40,277	32,856
CURRENT ASSETS
Stock-in-trade	24,833	19,403
Current receivables
Accounts receivables	4,021	3,659
Tax receivables	379	-
Other receivables	1,469	1,470
Prepaid expenses	1,884	1,516
	7,753	6,645
Short-term Investments	-	2,602
Cash and cash equivalents	12,950	14,091
TOTAL CURRENT ASSETS	45,536	42,741
TOTAL ASSETS	85,813	75,597

GROUP BALANCE SHEET (SEK m)

EQUITY AND LIABILITIES	30 Nov - 2015	30 Nov - 2014
EQUITY
Share capital	207	207
Reserves	1,904	204
Retained earnings	55,938	51,145
EQUITY	58,049	51,556
LIABILITIES
Long-term liabilities*
Provisions for pensions	449	451
Deferred tax liabilities	4,378	3,287
	4,827	3,738
Current liabilities**
Accounts payable	6,000	5,520
Tax liabilities	-	1,154
Other liabilities	3,192	2,947
Accrued expenses and prepaid income	13,745	10,682
	22,937	20,303
TOTAL LIABILITIES	27,764	24,041
TOTAL EQUITY AND LIABILITIES	85,813	75,597

* Only provisions for pensions are interest-bearing.

** No current liabilities are interest-bearing.

GROUP CHANGES IN EQUITY (SEK m)

Since there are no minority interests, all shareholders' equity is attributable to the shareholders of the shareholders of the parent company, H & M Hennes & Mauritz AB.

					Total
	Share	Translation	Hedgings	Retained	shareholders
	capital	effects	reserves	earnings	equity
Shareholder's equity, 1 December 2014	207	149	55	51,145	51,556
Profit for the year	-	-	-	20,898	20,898
Other comprehensive income
Translation differences	-	1,514	-	-	1,514
Change in hedging reserves
Reported in other comprehensive income	-	-	1,826	-	1,826
Transfer to income statement	-	-	-1,581	-	-1,581
Tax attributable to hedging reserves	-	-	-59	-	-59
Revaluations relating to defined benefit pension
plans	-	-	-	43	43
Tax attributable to the above revaluation	-	-	-	-11	-11
Other comprehensive income	-	1,514	186	32	1,732
Total comprehensive income	-	1,514	186	20,930	22,630
Dividend	-	-	-	-16,137	-16,137
Shareholder's equity, 30 November 2015	207	1,663	241	55,938	58,049

					Total
	Share	Translation	Hedgings	Retained	shareholders
	capital	effects	reserves	earnings	equity
Shareholder's equity, 1 December 2013	207	-1,830	-86	46,957	45,248
Profit for the year	-	-	-	19,976	19,976
Other comprehensive income
Translation differences	-	1,979	-	-	1,979
Change in hedging reserves
Reported in other comprehensive income	-	-	944	-	944
Transfer to income statement	-	-	-759	-	-759
Tax attributable to hedging reserves	-	-	-44	-	-44
Revaluation of defined benefit pension plans	-	-	-	-148	-148
Tax attributable to the above revaluation	-	-	-	35	35
Other comprehensive income	-	1,979	141	-113	2,007
Total comprehensive income	-	1,979	141	19,863	21,983
Overdue bonus share rights	-	-	-	48	48
Dividend	-	-	-	-15,723	-15,723
Shareholder's equity, 30 November 2014	207	149	55	51,145	51,556

GROUP CASH FLOW STATEMENT (SEK m)

	Full year 2015	Full year 2014
Current operations
Profit after financial items*	27,242	25,895
Provisions for pensions	28	-20
Depreciation	6,399	5,045
Tax paid	-7,022	-5,971
Cash flow from current operations before changes in working capital	26,647	24,949
Cash flow from changes in working capital
Current receivables	-249	-888
Stock-in-trade	-5,105	-2,327
Current liabilities	2,774	2,422
CASH FLOW FROM CURRENT OPERATIONS	24,067	24,156
Investment activities
Investment in leasehold and similar rights	-324	-35
Investments in other immaterial assets	-1,140	-868
Investment in buildings and land	-2	-21
Investment in fixed assets	-10,593	-8,467
Change in short-term investments, 4 - 12 months	2,602	704
Other investments	-153	-21
CASH FLOW FROM INVESTMENT ACTIVITIES	-9,610	-8,708
Financial activities
Dividend	-16,137	-15,723
CASH FLOW FROM FINANCIAL ACTIVITIES	-16,137	-15,723
CASH FLOW FOR THE YEAR	-1,680	-275
Cash and cash equivalents at beginning of the financial year	14,091	13,918
Cash flow for the year	-1,680	-275
Exchange rate effect	539	448
Cash and cash equivalents at end of the financial year**	12,950	14,091

* Interest paid for the group amounts to SEK 10 m (16).

Received interest for the group amounts to SEK 310 m (328).

** Cash and cash equivalents and short-term investments 4-12 months at the end of the period amounted to SEK 12,950 m (16,693).

SALES INCLUDING VAT BY MARKET AND NUMBER OF STORES

Q4, 1 September - 30 November

Market	Q4 - 2015	Q4 - 2014	Change in %		30 Nov - 15	Q4 - 2015
	SEK m	SEK m	SEK	Local currency	No. of stores	New stores	Closed stores
Sweden	2,521	2,326	8	8	176	4
Norway	1,449	1,467	-1	7	120	3
Denmark	1,461	1,347	8	7	103	1
United Kingdom	4,406	3,813	16	4	264	13	3
Switzerland	1,726	1,615	7	-5	96	1	1
Germany	9,739	9,393	4	2	449	6	4
Netherlands	2,037	1,976	3	1	139	3
Belgium	1,081	1,015	7	5	85	4
Austria	1,457	1,381	6	4	78	2
Luxembourg	118	109	8	7	10	1	1
Finland	723	690	5	3	60
France	3,536	3,369	5	3	222	10	1
USA	6,777	5,303	28	8	415	35	1
Spain	2,025	1,831	11	9	165	6	2
Poland	1,136	994	14	15	154	11	1
Czech Republic	351	276	27	23	44
Portugal	321	303	6	4	30
Italy	2,451	2,146	14	12	150	12
Canada	1,122	960	17	16	78	3	1
Slovenia	142	138	3	1	12
Ireland	280	229	22	20	23	2
Hungary	375	305	23	21	40	4
Slovakia	172	127	35	32	18	2	1
Greece	442	388	14	12	32	1	1
China	2,827	2,378	19	4	353	54
Hong Kong	475	421	13	-3	25	4
Japan	1,057	992	7	0	57	4
Russia	831	775	7	44	96	10
South Korea	353	308	15	12	31	5
Turkey	676	482	40	51	46	9
Romania	522	417	25	24	42	1
Croatia	238	225	6	4	15	1
Singapore	233	205	14	8	12	2
Bulgaria	148	124	19	18	18	2
Latvia	81	72	13	11	6
Malaysia	226	202	12	27	29	8
Mexico	334	193	73	80	16	3
Chile	189	103	83	81	4	3
Lithuania	78	66	18	17	7
Serbia	87	89	-2	-2	6	1
Estonia	80	71	13	11	6
Australia	363	176	106	110	10	4
Philippines	152	49	210	139	12	6
Taiwan	144				6	5
Peru	104				2	1
Macau	49				2
India	77				2	2
South Africa	98				2	2
Franchise	1,207	807	50	27	156	15
Total	56,477	49,656	1 4	9	3,924	266	1 7

SALES INCLUDING VAT BY MARKET AND NUMBER OF STORES

Full year, 1 December - 30 November

SEK m SEK m SEK Local No. of stores New Closed currency stores stores Sweden 9,495 8,923 6 6 176 6 6 Norway 5,806 5,650 3 6 120 3 1 Denmark 5,413 5,105 6 3 103 6 2 United Kingdom 16,001 12,993 23 8 264 18 7 Switzerland 6,844 5,951 15 -2 96 4 1 Germany 36,943 34,950 6 2 449 18 9 Netherlands 7,521 7,320 3 -1 139 7 3 Belgium 4,215 3,903 8 4 85 8 1 Austria 5,361 5,165 4 0 78 5 Luxembourg 433 418 4 0 10 1 1 Finland 2,805 2,688 4 1 60 1 1 France 13,579 12,321 10 7 222 20 3 USA 25,135 17,278 45 18 415 63 4 Spain 7,736 6,748 15 11 165 13 7 Poland 4,356 3,735 17 13 154 15 1 Czech Republic 1,207 969 25 20 44 1 Portugal 1,276 1,105 15 12 30 Italy 8,644 7,140 21 17 150 18 Canada 3,918 3,116 26 17 78 8 2 Slovenia 529 496 7 3 12 Ireland 1,026 811 27 22 23 3 Hungary 1,336 1,055 27 23 40 5 Slovakia 579 436 33 28 18 4 1 Greece 1,637 1,327 23 19 32 3 1 China 10,559 7,495 41 16 353 86 3 Hong Kong 1,870 1,548 21 -2 25 4 Japan 3,754 3,356 12 5 57 8 2 Russia 3,460 3,058 13 50 96 25 South Korea 1,277 990 29 13 31 9 Turkey 2,193 1,325 66 64 46 16 Romania 1,796 1,281 40 36 42 4 Croatia 817 773 6 2 15 1 Singapore 970 794 22 7 12 2 Bulgaria 511 389 31 27 18 2 Latvia 309 245 26 22 6 Malaysia 973 677 44 37 29 11 Mexico 1,097 598 83 76 16 10 Chile 573 350 64 52 4 3 Lithuania 296 216 37 33 7 1 Serbia 318 245 30 30 6 1 Estonia 312 223 40 36 6 Australia 1,133 458 147 139 10 7 Philippines 557 49 1,037 765 12 9 Taiwan 332 6 6 Peru 261 2 2 Macau 89 2 2 India 77 2 2 South Africa 98 2 2 Franchise 4,494 2,947 52 28 156 29 3 Total 209,921 176,620 1 9 1 1 3,924 472 59	Market	2015	2014	Change in %		30 Nov - 15	Full year

FIVE YEAR SUMMARY Full year, 1 December - 30 November

	2011	2012	2013	2014	2015
Sales including VAT, SEK m	128,810	140,948	150,090	176,620	209,921
Sales excluding VAT, SEK m	109,999	120,799	128,562	151,419	180,861
Change from previous year in SEK, %	1	10	6	18	19
Change from previous year in local currencies, %	8	11	9	14	11
Operating profit, SEK m	20,379	21,754	22,090	25,583	26,942
Operating margin, %	18.5	18.0	17.2	16.9	14.9
Depreciation for the year, SEK m	3,262	3,705	4,191	5,045	6,399
Profit after financial items, SEK m	20,942	22,285	22,448	25,895	27,242
Profit after tax, SEK m	15,821	16,867	17,093	19,976	20,898
Cash and cash equivalents and short-term investments, SEK m	21,277	17,143	17,224	16,693	12,950
Stock-in-trade, SEK m	13,819	15,213	16,695	19,403	24,833
Equity, SEK m	44,104	43,835	45,248	51,556	58,049
Number of shares, thousands*	1,655,072	1,655,072	1,655,072	1,655,072	1,655,072
Earnings per share, SEK*	9.56	10.19	10.33	12.07	12.63
Shareholders' equity per share, SEK*	26.65	26.49	27.34	31.15	35.07
Cash flow from current operations
per share, SEK*	10.53	11.42	14.40	14.60	14.54
Dividend per share, SEK	9.50	9.50	9.50	9.75	9,75**
Return on shareholders' equity, %	35.8	38.4	38.4	41.3	38.1
Return on capital employed, %	47.1	50.3	50.0	53.1	49.3
Share of risk-bearing capital, %	74.9	76.1	73.0	72.5	72.7
Equity/assets ratio, %	73.3	72.8	68.9	68.2	67.6
Total number of stores	2,472	2,776	3,132	3,511	3,924
Average number of employees	64,874	72,276	81,099	93,351	104,634

* Before and after dilution.

** Proposed by the Board of Directors

Definition on key figures see annual report.

SEGMENT REPORTING (SEK m)

	2015	2014
Asia and Oceania
External net sales	23,610	16,878
Operating profit	1,740	1,999
Operating margin, %	7.4	11.8
Assets excluding tax receivables	11,171	8,876
Liabilities excluding tax liabilities	1,736	1,234
Investments	2,516	1,630
Depreciation	843	522
Europe and Africa
External net sales	128,200	114,506
Operating profit	4,828	8,720
Operating margin, %	3.8	7.6
Assets excluding tax receivables	33,258	36,865
Liabilities excluding tax liabilities	9,950	9,719
Investments Depreciation	4,845 3,578	3,624 3,157
North and South America
External net sales	29,051	20,035
Operating profit	619	433
Operating margin, %	2.1	2.2
Assets excluding tax receivables Liabilities excluding tax liabilities	14,157 4,712	10,897 3,112
Investments	2,966	2,918
Depreciation	1,547	958
Group Functions
Net sales to other segments	91,297	67,870
Operating profit	19,755	14,431
Operating margin, %	21.6	21.3
Assets excluding tax receivables	24,510	18,959
Liabilities excluding tax liabilities	6,988	5,535
Investments	1,732	1,219
Depreciation	431	408
Eliminations
Net sales to other segments	-91,297	-67,870
Total
External net sales	180,861	151,419
Operating profit	26,942	25,583
Operating margin, %	14.9	16.9
Assets excluding tax receivables	83,096	75,597
Liabilities excluding tax liabilities	23,386	19,600
Investments	12,059	9,391
Depreciation	6,399	5,045

PARENT COMPANY INCOME STATEMENT (SEK m)

	Q4	Q4	Full year	Full year
	2015**	2014	2015**	2014
External sales excluding VAT	13	37	15	47
Internal sales excluding VAT*	1,080	2,425	3,605	8,764
GROSS PROFIT	1,093	2,462	3,620	8,811
Selling expenses	0	-1,117	0	-2,982
Administrative expenses	-76	-1,492	-126	-5,316
OPERATING PROFIT	1,017	-147	3,494	513
Dividend from subsidiaries	11,931	14,059	13,288	15,701
Interest income and similar items	126	17	154	59
Interest expense	0	-2	-7	-25
PROFIT AFTER FINANCIAL ITEMS	13,074	13,927	16,929	16,248
Year-end appropriations	17	-10	17	-10
Tax	-256	19	-806	-130
PROFIT FOR THE PERIOD	12,835	13,936	16,140	16,108

* Includes royalty of SEK 3,457 m (5,735), service income 0 m (3,029) and other SEK 148 m (0) received from group companies.

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME (SEK m)

	Q4 2015**	Q4 2014	Full year 2015**	Full year 2014
PROFIT FOR THE PERIOD	12,835	13,936	16,140	16,108
Other comprehensive income
Items that have not been and will not be reclassified to profit or loss
Revaluations relating to defined benefit pension plans	37	-24	37	-24
Tax attributable to the above revaluation	-8	5	-8	5
OTHER COMPREHENSIVE INCOME	29	-19	29	-19
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	12,864	13,917	16,169	16,089

** To simplify administration and internal follow-up, with effect from 1 December 2014 all central functions in Sweden were brought together in one company, H & M Hennes & Mauritz GBC AB. Due to this, the majority of the revenues and costs in the parent company were transferred to H & M Hennes & Mauritz GBC AB.

PARENT COMPANY BALANCE SHEET (SEK m)

ASSETS	30 Nov - 2015	30 Nov - 2014
FIXED ASSETS
Tangible fixed assets
Buildings and land	71	73
Equipment, tools, fixture and fittings	435	575
	506	648
Financial fixed assets
Shares and participation rights	588	588
Receivables from subsidiaries	1,085	905
Long-term receivables	11	11
Deferred tax receivables	43	49
	1,727	1,553
TOTAL FIXED ASSETS	2,233	2,201
CURRENT ASSETS
Current receivables
Receivables from subsidiaries	8,471	11,851
Tax receivables	-	82
Other receivables	2	44
Prepaid expenses	0	20
	8,473	11,997
Short-term investments	-	2,602
Cash and cash equivalents	8,095	2,314
TOTAL CURRENT ASSETS	16,568	16,913
TOTAL ASSETS	18,801	19,114

PARENT COMPANY BALANCE SHEET (SEK m)

	30 Nov - 2015	30 Nov - 2014
EQUITY AND LIABILITIES
EQUITY
Restricted equity
Share capital	207	207
Restricted reserves	88	88
	295	295
Non-restricted equity
Retained earnings	829	877
Profit for the year	16,169	16,089
	16,998	16,966
TOTAL EQUITY	17,293	17,261
UNTAXED RESERVES	447	464
LIABILITIES
Long-term liabiliities
Provisions for pensions	195	223
Short-term liabiliities*
Accounts payable	5	462
Tax liabilities	671	-
Other liabilities	182	325
Accrued expenses and prepaid income	8	379
	866	1,166
TOTAL LIABILITIES	1,061	1,389
TOTAL EQUITY AND LIABILITIES	18,801	19,114
Pledged assets	-	-
Contingent liabilities	14,654	13,186

* No current liabilities are interest-bearing.