Interim / Quarterly Report • Jun 27, 2019
Interim / Quarterly Report
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First half-year (1 December 2018 – 31 May 2019)
H&M
"The H&M group continues to increase full-price sales, reduce markdowns and increase market share, showing that customers appreciate our collections and the improvements we are making to the product assortment and the customer experience.
Sales developed well in most markets. We had strongest growth in countries such as the US where we grew sales by 17 percent, in Mexico by 25 percent, in India by 39 percent, in Russia by 19 percent and in Poland by 11 percent in local currencies. We also grew in the UK and Sweden where we took market share despite challenging market conditions.
Total sales in the group increased by 11 percent in SEK and with 6 percent in local currencies in the second quarter. Online sales continued to develop strongly, increasing by 27 percent in SEK and 20 percent in local currencies.
By continuing to integrate our physical and digital channels we are making the shopping experience inspiring, easy and convenient for customers wherever we meet them. This and other extensive investments are driving costs in the short term. For example, our new online platform and our new logistics systems have not yet achieved full efficiency, but for customers have resulted in improvements such as faster and more flexible deliveries and a more seamless shopping experience. We have also increased the value for our customers through further investments in the customer offering so that we offer the best combination of fashion, quality, price and sustainability. In April H&M became the first big fashion brand in the world to provide detailed information concerning the factory and material for individual garments to help customers make more sustainable choices. We have continued to develop our new digital features and during the spring we also substantially expanded H&M's customer loyalty programme, which now has more than 43 million members.
The transformation work is having an effect and will continue at a fast pace within our strategic focus areas:
Product assortment – secure the best combination of fashion, quality, price and sustainability for all the brands.
Physical stores – continued development of new concepts and optimisation of the store portfolio.
Online stores – improvements such as faster and more flexible delivery options and payments.
Continued integration of our physical stores and online stores to enhance the customer experience.
Make the supply chain even faster, more flexible and more efficient.
Initiatives within advanced data analytics and AI.
Continued investments in our tech foundation including robust scalable platforms that enable faster development of various customer apps and new technologies.
Digital expansion into new markets. In April H&M opened online in Mexico, and this autumn H&M will launch online via franchise in Thailand, Indonesia and Egypt. In addition, partnerships with various external platforms are making the H&M group's brands available to more and more customers globally. In autumn 2019 H&M will launch on India's largest ecommerce platform Myntra and in China & Other Stories will open on Tmall.
Physical stores – continued expansion with focus on growth markets. The planned net addition for the full-year is around 130 stores.
Develop new concepts and business models.
Our transformation work in response to the rapid shift in fashion retail is continuing at full speed. While the costs of this have held back profitability in the short term, we remain convinced that our focus on meeting customers' increased expectations will contribute to a gradual increase in profitability and to long-term positive development for the H&M group. "
Read more about our initiatives and our sustainability work on the next page and at hmgroup.com.
& Other Stories
The H&M group continues to enhance the customer experience. Improvements are being made throughout the supply chain, from product development to a more inspiring shopping experience, to meet customers' increased expectations. Here are some examples:
H&M
H&M
Net sales increased by 11 percent to SEK 57,474 m (51,984) in the second quarter. Net sales in the six-month period increased by 11 percent to SEK 108,489 m (98,165). In local currencies the H&M group's net sales increased by 6 percent in the second quarter and by 5 percent in the six-month period.
Online sales in the second quarter increased by 27 percent in SEK and in local currencies the increase was 20 percent.
New Business increased sales in the second quarter by 21 percent in SEK and by 18 percent in local currencies.
| Q2 - 2019 | Q2 - 2018 | Change in % | 31 May - 19 | Q2 - 2019 | ||
|---|---|---|---|---|---|---|
| SEK m | SEK m | SEK | Local | Number of | New stores | |
| net sales | net sales | currency | stores | (net) | ||
| Germany | 8,703 | 8,522 | 2 | -2 | 462 | -4 |
| USA | 7,336 | 5,673 | 29 | 17 | 575 | 0 |
| UK | 3,747 | 3,400 | 10 | 5 | 302 | 1 |
| China | 3,119 | 2,775 | 12 | 8 | 533 | -2 |
| France | 2,731 | 2,607 | 5 | 2 | 234 | -4 |
| Sweden | 2,314 | 2,212 | 5 | 5 | 178 | 2 |
| Italy | 1,938 | 1,898 | 2 | -1 | 180 | 2 |
| Spain | 1,880 | 1,693 | 11 | 8 | 167 | -3 |
| Russia | 1,837 | 1,506 | 22 | 19 | 141 | 1 |
| Netherlands | 1,756 | 1,697 | 3 | -1 | 137 | -5 |
| Others* | 22,113 | 20,001 | 11 | 6 | 2,070 | 33 |
| Total | 57,474 | 51,984 | 11 | 6 | 4,979 | 21 |
| * Of which franchises | 1,422 | 1,246 | 14 | 2 | 257 | 2 |
Sales in Germany were affected by fine-tuning required following the transition of the online platform at the beginning of the year. Sales have gradually picked up again and towards the end of the second quarter exceeded last year's sales.
The difference between the sales increase in SEK and in local currencies is due to how the Swedish krona has developed against the overall basket of currencies in the group compared with the same period last year.
ARKET
Gross profit increased by 9 percent and amounted to SEK 31,825 m (29,164) in the second quarter, corresponding to a gross margin of 55.4 percent (56,1). For the six-month period, gross profit amounted to SEK 57,351 m (52,204), corresponding to a gross margin of 52.9 percent (53.2).
Costs for markdowns in relation to sales decreased by around 1 percentage point in the second quarter of 2019 compared with the corresponding quarter in 2018.
The gross profit and gross margin are a result of many factors, internal as well as external, and are mostly affected by the decisions that the H&M group 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.
For the second quarter the external factors influencing purchasing costs were negative overall, mainly as a result of the gradual strengthening of the US dollar against the group's basket of currencies compared with the same purchasing period the previous year. The gross margin was also affected by continued investments in an even stronger customer offering and by costs for the intensified transformation work.
For purchases made for the third quarter 2019 the overall market situation as regards external factors is expected to remain negative – mostly due to the strengthening of the US dollar against the group's basket of currencies compared with the same purchasing period the previous year.
H&M Home
In the second quarter of 2019, selling and administrative expenses increased by 12 percent in SEK and by 7 percent in local currencies compared with the corresponding period the previous year. For the six-month period, selling and administrative expenses increased by 12 percent in SEK and by 7 percent in local currencies compared with the corresponding period the previous year. Cost control in the group remains good.
The cost increase in the quarter is mainly explained by store and online expansion, but also by the group's ongoing transformation work with investments in focus areas such as AI, tech, logistics and H&M's customer loyalty programme.
Profit after financial items amounted to SEK 5,934 m (6,012) in the second quarter. Profit in the six-month period amounted to SEK 6,977 m (7,275).
The group's ongoing transformation work contributed to continued positive sales development with more full-price sales, lower markdowns and increased market share. As customer satisfaction and sales have increased, the transformation work has been further intensified. While the costs of the group's initiatives have had a dampening effect on profitability, the company expects the initiatives to gradually contribute to an increase in the profitability of the H&M group.
Currency adjusted the stock-in-trade increased by 4 percent. In SEK the book value of stock-intrade increased by 11 percent to SEK 40,406 m (36,333). The book value of stock-in-trade in SEK represented 32.4 percent (32.3) of total assets and 18.3 percent (18.2) of sales for the rolling 12 months, which amounted to SEK 220,724 m (199,801).
The composition of the stock-in-trade continues to improve. The company therefore assesses that the costs of markdowns in relation to sales will decrease by around 1.5 percentage points in the third quarter in a year-on-year comparison. This would be the fourth successive quarter with a reduction in markdowns.
The global integration of stores and online continues. Work is continuing at full speed to roll out online globally to all existing H&M markets and to other markets as well. Today H&M online is in 48 markets. Thailand, Indonesia and Egypt are scheduled to become new H&M online markets via franchise during the second half of 2019, when H&M will also be launched on Myntra, India's largest ecommerce platform, and & Other Stories will be launched on Tmall in China.
In addition to Bosnia-Herzegovina, which has already opened, Belarus and (via franchise) Tunisia will become new H&M store markets in 2019.
The company is accelerating its adaptation to customers' changed shopping patterns and has therefore revised the number of new stores downwards. The net addition of new stores for full-year 2019 will therefore be around 130, which is 45 fewer in the second half than previously assessed.
For the 2019 financial year around 295 new stores are planned to open, of which around 220 will be H&M stores. Around 75 of the year's store openings will be COS, & Other Stories, Monki, Weekday, ARKET and Afound stores. A total of three standalone H&M Home stores are planned to open in 2019. The majority of the H&M store openings will be in markets outside of Europe and the US.
In total, approximately 165 store closures are planned within the group, which is part of the intensified store optimisation being carried out that also includes renegotiations, rebuilds and adjustment of store space to ensure that the store portfolio is the best fit for each market.
Monki
| No. of markets 31 May - 2019 |
Expansion 2019 |
||
|---|---|---|---|
| Brand | Store | Online | New markets |
| H&M | 72 | 48 | Store: Bosnia-Herzegovina, Belarus, Tunisia (franchise) Online: Mexico, Egypt (franchise), Thailand (franchise), Indonesia (franchise) |
| COS | 42 | 22 | Store: Iceland, Lithuania, Slovakia Online: Norway* |
| Monki | 17 | 19 | Store: Iceland, Poland, United Arab Emirates (franchise) Online: Norway |
| Weekday | 12 | 19 | Store: Iceland, Luxembourg Online: Norway* |
| & Other Stories | 19 | 16 | Store: Luxembourg, Latvia Online: Norway, China (Tmall) |
| ARKET | 7 | 19 | Store: Luxembourg Online: Norway |
| Afound | 1 | 1 | Online: Netherlands |
| H&M HOME | 51 | 41 | Online: Mexico*, Kazakhstan |
H&M
* Opened until 31 May - 2019
** Opened in June 2019
In the first half-year, excluding franchise, the group opened 83 (105) stores and closed 74 (65) stores, i.e. a net increase of 9 (40) new stores. Via franchise partners 8 (22) stores were opened and 6 (0) stores were closed. The group had 4,979 (4,801) stores as of 31 May 2019, of which 257 (241) were operated by franchise partners.
As previously communicated, Cheap Monday will be closed down in summer 2019. The H&M group's transformation work in response to the extensive changes within the fashion industry means that the company is prioritising and focusing on its core business. Cheap Monday's business model is based on traditional wholesale, which is a model that has faced major challenges due to the shift in the industry. The H&M group has therefore decided to close down Cheap Monday.
| New Stores 2019 (net) |
Total No of stores | ||
|---|---|---|---|
| Brand | Q2 | 31 May - 2019 | 31 May - 2018 |
| H&M | 9 | 4,429 | 4,328 |
| COS | 2 | 274 | 247 |
| Monki | 0 | 127 | 120 |
| Weekday | 6 | 44 | 34 |
| & Other Stories | 1 | 70 | 62 |
| Cheap Monday | 0 | 0 | 1 |
| ARKET | 1 | 19 | 9 |
| Afound | 0 | 6 | 0 |
| H&M HOME* | 2 | 10 | 0 |
| Total | 21 | 4,979 | 4,801 |
* Concept stores, H&M HOME is included with 373 shop-in-shop in H&M stores.
| New Stores 2019 (net) |
Total No of stores | ||
|---|---|---|---|
| Europe & Africa | 4 | 3,059 | 3,014 |
| Asia & Oceania | 13 | 1,172 | 1,090 |
| North & South America | 4 | 748 | 697 |
| Total | 21 | 4,979 | 4,801 |
The H&M group's tax rate for the 2018/2019 financial year is expected to be approximately 22.0 – 23.0 percent. In the first, second and third quarters of 2019 a tax rate of 23.0 percent will be used to calculate tax expense on the result of each quarter. The outcome of the tax rate for the year depends on the results of the group's various companies and the corporate tax rates in each country.
Sales of the summer collections got off to a very good start. Net sales in the month of June is estimated to increase by 12 percent in local currencies compared with the corresponding month the previous year.
The company therefore assesses that the costs of markdowns in relation to sales will decrease by around 1.5 percentage points in Q3 2019 compared with Q3 2018. This would be the fourth successive quarter with a reduction in markdowns.
As of 31 May 2019 the group had SEK 10,505 m (14,527) in loans with a term of up to 12 months, SEK 9,376 m (1,028) in loans with a term of between 12 months and three years, SEK 2,125 m (0) in loans with a term of between three and five years and SEK 2,000 m (0) in loans with a term of over five years.
In the second quarter of 2019 the H&M group carried out financing activities aimed at improving liquidity and increasing the average term. In May 2019 H & M Hennes & Mauritz AB launched a Swedish commercial paper programme. The commercial paper market is an established source of short-term financing for maturities of up to 12 months. The aim of the programme is to diversify the company's financing to include supplementary sources of financing, thereby providing greater flexibility and increased cost-effectiveness in short-term liquidity management. In May SEK 2,000 m was issued under the programme with terms of between three and six months. Total cash and cash equivalents as well as unutilised committed credit facilities amounted to SEK 22,515 m (18,303) and the average term of loans from credit institutions was 2.0 years (0.5). those used in the preparation of the annual report and consolidated financial statements for Region Q2 31 May - 2019 31 May - 2018
Net debt in relation to EBITDA amounted to 0.5 (0.2).
The strong credit profile of the H&M group enables cost-effective financing. The group continuously reviews opportunities to complement this with further sources of funding on the credit market.
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
2018 which are described in Note 1 – Accounting principles, other than the application of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers, which are being applied with effect from 1 December 2018. IFRS 9 and 15 and their effects on H&M are commented on below. A description of the H&M group's accounting principles as a result of the introduction of IFRS 9 and 15 can be found in the H&M group's annual report for 2018.
H & M Hennes & Mauritz AB's financial instruments consist of accounts receivable, other receivables, cash and cash equivalents, accounts payable, accrued trade payables, interestbearing securities and currency derivatives. Currency derivatives are measured at fair value based on input data corresponding to level 2 of IFRS 13. As of 31 May 2019, forward contracts with a positive market value amount to SEK 610 m (768), which is reported under other current receivables. Forward contracts with a negative market value amount to SEK 872 m (938), which is reported under other current liabilities. Other financial assets and liabilities have short terms and are measured at amortised cost. It is therefore judged that the fair values of these financial instruments are approximately equal to their book values.
The parent company applies the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities, which essentially involves applying IFRS. In accordance with RFR 2, the parent company does not apply IAS 39 to the measurement of financial instruments; nor does it capitalise development expenditure.
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement with effect from 1 December 2018. The standard is divided into three parts: classification and measurement, hedge accounting and impairment.
IFRS 9 requires financial assets to be classified in three different measurement categories: amortised cost, fair value through other comprehensive income or fair value through profit or loss. The asset is classified upon initial recognition, based on the characteristics of the asset and the company's business model. In the case of financial liabilities, there are no significant changes compared to IAS 39.
With effect from 1 December 2018 H&M is applying hedge accounting in accordance with IFRS 9. All the hedging relationships that existed upon transition to IFRS 9 qualified for continued hedge accounting, with no transitional effect. The group has not restated the comparative year, which is reported according to IAS 39. Finally, new principles have been introduced regarding impairment of financial assets using a model based on expected losses. One of the aims of the new model is that provision for credit losses will be made at an earlier stage. For H&M, the measurement of doubtful receivables is not affected by the transition to any significant degree. Overall, the introduction of IFRS 9 has not had any significant effect on the consolidated accounts.
IFRS 15 Revenue from Contracts with Customers. In H&M's case this standard will be applied from the financial year beginning on 1 December 2018. The standard replaces all previously issued standards and interpretations dealing with revenue (i.e. IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue: Barter Transactions Involving Advertising Services).
IFRS 15 contains an overall model for reporting revenue arising from contracts with customers. Everything starts with an agreement between two parties concerning the sale of a good or service. Initially a customer agreement is to be identified, which generates an asset (rights, a promise that compensation will be received) and a liability (commitments, a promise to deliver goods/services) for the seller. Under the model the company then reports a revenue item and thereby demonstrates that the company is meeting a commitment to deliver promised goods or services to the customer, which in H&M's case mainly takes place at the same time. The revenue consists of the amount that the company expects to receive as payment for the goods or services delivered. To assess how the introduction of IFRS 15 impacts the group, a preliminary study of the company's revenue streams. The preliminary study showed that the group's income statement is not significantly affected by the introduction of IFRS 15. The only exception is that as of 1 December 2018 the group reports provisions for expected returns gross. The group has elected to use a prospective method of transition and consequently comparative figures have not been restated.
For definitions see the annual report and consolidated accounts for 2018.
A number of new standards, revisions and interpretations of existing standards have been published but have not yet entered into force for the H&M group. Of these, only the standards below are expected to have any effect on the consolidated financial statements.
o IFRS 16 Leases. This standard will be applied from the financial year beginning on 1 December 2019, when it will supersede IAS 17 Leases and its associated interpretations. The standard requires lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. The group has begun its evaluation of the new standard and expects it to result in recognition of significant assets and liabilities associated with the group's leases for premises. Since the standard will be applied for the first time in the 2019/2020 financial year, the judgement has been made that it is not yet possible to assess and calculate its effects on the figures with any certainty.
A number of factors may affect the H&M group's result 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 for the H&M group related to the major shift within the industry, fashion, weather conditions, macroeconomic and geopolitical changes, sustainability issues, foreign currency, cyber-attacks, tax and different regulations 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 2018.
| 16 September 2019 | Sales development in third quarter, 1 Jun 2019 – 31 Aug 2019 |
|---|---|
| 3 October 2019 | Nine-month report, 1 Dec 2018 – 31 Aug 2019 |
| 16 December 2019 | Sales development in fourth quarter, 1 Sep 2019 – 30 Nov 2019 |
| 30 January 2020 | Full-year report, 1 Dec 2018 – 30 Nov 2019 |
| 16 March 2020 | Sales development in first quarter, 1 Dec 2019 – 29 Feb 2020 |
| 25 March 2020 | Three-month report, 1 Dec 2019 – 29 Feb 2020 |
| 7 May 2020 | Annual general meeting |
This six-month report has not been audited by the company's auditors.
Stockholm, 26 June 2019 Board of Directors
The six-month report for 2019, i.e. 1 December 2018 – 31 May 2019, will be published at 08:00 CEST on 27 June 2019, followed by a press conference at 09:30 CEST hosted by CEO Karl-Johan Persson and Head of IR Nils Vinge. The press conference for the financial market and media will be held in Swedish at H&M's head office in Stockholm, Ljusgården, Mäster Samuelsgatan 49, 3rd floor. The presentation material will be available at hmgroup.com/investors after the press conference.
A telephone conference for the financial market and media will be held in English at 14:00 CEST, hosted by CEO Karl-Johan Persson, CFO Jyrki Tervonen and Head of IR Nils Vinge. For login details to the telephone conference please register at hmgroup.com or via this link: http://emea.directeventreg.com/registration/7690038
To book interviews with CEO Karl-Johan Persson and Head of IR Nils Vinge in conjunction with the six-month report on 27 June, please contact:
Kristina Stenvinkel, Communications Director Phone +46 8 796 39 08 Email: [email protected]
| Nils Vinge, Head of 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: [email protected] Registered office: Stockholm, Reg. No. 556042-7220
The undersigned hereby provide an assurance that the half-year report for 1 December 2018 – 31 May 2019 provides a true and fair view of the parent company's and the group's business, positions and earnings, and also describe the significant risks and uncertainties faced by the companies making up the group.
Stockholm 26 June, 2019
Stefan Persson Stina Bergfors Anders Dahlvig Chairman of the Board Board member Board member
Ingrid Godin Danica Kragic Jensfeldt Board member Board member
Lena Patriksson Keller Alexandra Rosenqvist Board member Board member
Christian Sievert Erica Wiking Häger Niklas Zennström Board member Board member Board member
Karl-Johan Persson Chief Executive Officer
Information in this six-month report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under the EU Market Abuse Regulation (596/2014/EU). The information was submitted for publication by the abovementioned persons at 08:00 (CEST) on 27 June 2019. This six-month report and other information about the H&M group, is available at hmgroup.com.
H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm. H&M's business idea is to offer fashion and quality at the best price in a sustainable way. In addition to H&M, the group includes the brands COS, Monki, Weekday, Cheap Monday, & Other Stories, H&M HOME and ARKET as well as Afound. The H&M group has 48 online markets and more than 4,900 stores in 72 markets including franchise markets. In 2018, net sales were SEK 210 billion. The number of employees amounts to more than 177,000. For further information, visit hmgroup.com.
| Q2 | Q2 | Six months | Six months | 1 Dec 2017- | |
|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | 30 Nov 2018 | |
| Net sales | 57,474 | 51,984 | 108,489 | 98,165 | 210,400 |
| Cost of goods sold | -25,649 | -22,820 | -51,138 | -45,961 | -99,513 |
| GROSS PROFIT | 31,825 | 29,164 | 57,351 | 52,204 | 110,887 |
| Gross margin, % | 55.4 | 56.1 | 52.9 | 53.2 | 52.7 |
| Selling expenses | -23,653 | -21,095 | -46,076 | -41,071 | -87,512 |
| Administrative expenses | -2,237 | -2,062 | -4,335 | -3,918 | -7,882 |
| OPERATING PROFIT | 5,935 | 6,007 | 6,940 | 7,215 | 15,493 |
| Operating margin, % | 10.3 | 11.6 | 6.4 | 7.3 | 7.4 |
| Net financial items | -1 | 5 | 37 | 60 | 146 |
| PROFIT AFTER FINANCIAL ITEMS | 5,934 | 6,012 | 6,977 | 7,275 | 15,639 |
| Tax | -1,365 | -1,374 | -1,605 | -1,265 | -2,987 |
| PROFIT FOR THE PERIOD | 4,569 | 4,638 | 5,372 | 6,010* | 12,652 |
* Profit after tax in six month 2018 was affected by a one-off positive tax income of SEK 408 m as a result of the US tax reform (Tax Cuts & Jobs Act).
All profit for the year is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.
| Earnings per share, SEK** | 2.76 | 2.80 | 3.25 | 3.63 | 7.64 |
|---|---|---|---|---|---|
| Number of shares, thousands** | 1,655,072 | 1,655,072 | 1,655,072 | 1,655,072 | 1,655,072 |
| Depreciation, total | 2,794 | 2,424 | 5,471 | 4,703 | 9,671 |
| of which cost of goods sold | 147 | 136 | 318 | 287 | 558 |
| of which selling expenses | 2,490 | 2,146 | 4,845 | 4,130 | 8,566 |
| of which administrative expenses | 157 | 142 | 308 | 286 | 547 |
** Before and after dilution.
| Q2 | Q2 | Six months | Six months | 1 Dec 2017- | |
|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | 30 Nov 2018 | |
| PROFIT FOR THE PERIOD | 4,569 | 4,638 | 5,372 | 6,010 | 12,652 |
| Other comprehensive income | |||||
| Items that are or may be reclassified to profit or loss | |||||
| Translation differences | 239 | 1,415 | 1,511 | 2,021 | 1,895 |
| Change in hedging reserves | 560 | 328 | -192 | 366 | 535 |
| Tax attributable to change in hedging reserves | -129 | -75 | 44 | -84 | -123 |
| Items that will not be reclassified to profit or loss | |||||
| Remeasurement of defined benefit pension plans | - | - | - | - | 14 |
| Tax related to the above remeasurement | - | - | - | - | -3 |
| OTHER COMPREHENSIVE INCOME | 670 | 1,668 | 1,363 | 2,303 | 2,318 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 5,239 | 6,306 | 6,735 | 8,313 | 14,970 |
All comprehensive income is attributable to the shareholders of the parent company H & M Hennes & Mauritz AB.
| ASSETS | 31 May - 2019 | 31 May - 2018 | 30 Nov 2018 |
|---|---|---|---|
| Fixed assets | |||
| Intangible fixed assets | 10,666 | 8,071 | 9,618 |
| Property, plant and equipment | 42,127 | 41,459 | 42,439 |
| Financial fixed assets | 507 | 276 | 478 |
| Other fixed assets | 4,421 | 3,287 | 4,679 |
| 57,721 | 53,093 | 57,214 | |
| Current assets | |||
| Stock-in-trade | 40,406 | 36,333 | 37,721 |
| Current receivables | 13,573 | 12,099 | 12,265 |
| Cash and cash equivalents | 13,076 | 11,107 | 11,590 |
| 67,055 | 59,539 | 61,576 | |
| TOTAL ASSETS | 124,776 | 112,632 | 118,790 |
| EQUITY AND LIABILITIES | |||
| Equity | 49,144 | 51,889 | 58,546 |
| Long-term liabilities* | 18,842 | 6,323 | 16,025 |
| Current liabilities** | 56,790 | 54,420 | 44,219 |
| TOTAL EQUITY AND LIABILITIES | 124,776 | 112,632 | 118,790 |
* Interest-bearing long-term liabilities amounts to SEK 14,288 m (1,878).
** Interest-bearing current liabilities amounts to SEK 10,649 m (14,659).
| 31 May - 2019 | 31 May - 2018 | 30 Nov 2018 | |
|---|---|---|---|
| Shareholders' equity at the beginning of the period | 58,546 | 59,713 | 59,713 |
| Total comprehensive income for the period | 6,735 | 8,313 | 14,970 |
| Dividend | -16,137 | -16,137 | -16,137 |
| Shareholders' equity at the end of the period | 49,144 | 51,889 | 58,546 |
| Six months 2019 | Six months 2018 | |
|---|---|---|
| Current operations | ||
| Profit after financial items* | 6,977 | 7,275 |
| - Provisions for pensions | 31 | 32 |
| - Depreciation | 5,471 | 4,703 |
| - Tax paid | -1,564 | -546 |
| - Other | 21 | 21 |
| Cash flow from current operations before changes in working capital | 10,936 | 11,485 |
| Cash flow from changes in working capital | ||
| Current receivables | 267 | -1,164 |
| Stock-in-trade | -2,135 | -2,019 |
| Current liabilities | 31 | 831 |
| CASH FLOW FROM CURRENT OPERATIONS | 9,099 | 9,133 |
| Investing activities | ||
| Investment in intangible fixed assets | -1,602 | -1,370 |
| Investment in tangible fixed assets | -3,167 | -4,333 |
| Other investments | -31 | -170 |
| CASH FLOW FROM INVESTING ACTIVITIES | -4,800 | -5,873 |
| Financial activities | ||
| Change in interest-bearing liabilities | 4,611 | 5,750 |
| Dividend | -8,110 | -8,110 |
| CASH FLOW FROM FINANCIAL ACTIVITIES | -3,499 | -2,360 |
| CASH FLOW FOR THE PERIOD | 800 | 900 |
| Cash and cash equivalents at beginning of the financial year | 11,590 | 9,718 |
| Cash flow for the period | 800 | 900 |
| Exchange rate effect | 686 | 489 |
| Cash and cash equivalents at end of the period** | 13,076 | 11,107 |
* Interest paid for the group amounts to SEK 130 m (35).
** Cash and cash equivalents and short-term investments at the end of the period amounted to SEK 13,076 m (11,107).
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Net sales, SEK m | 86,143 | 90,565 | 98,368 | 98,165 | 108,489 |
| Change net sales from previous year in SEK, % | 23 | 5 | 9 | 0 | 11 |
| Change net sales previous year in local currencies, % | 12 | 7 | 5 | 0 | 5 |
| Operating profit, SEK m | 12,989 | 10,222 | 10,809 | 7,215 | 6,940 |
| Operating margin, % | 15.1 | 11.3 | 11.0 | 7.3 | 6.4 |
| Depreciations for the period, SEK m | 3,120 | 3,664 | 4,251 | 4,703 | 5,471 |
| Profit after financial items, SEK m | 13,158 | 10,329 | 10,920 | 7,275 | 6,977 |
| Profit after tax, SEK m | 10,066 | 7,902 | 8,354 | 6,010 | 5,372 |
| Cash and cash equivalents and short-term investments, SEK m | 10,293 | 8,387 | 10,655 | 11,107 | 13,076 |
| Stock-in-trade, SEK m | 19,699 | 25,339 | 32,148 | 36,333 | 40,406 |
| Equity, SEK m | 47,239 | 48,907 | 52,469 | 51,889 | 49,144 |
| Number of shares, thousands* | 1,655,072 | 1,655,072 | 1,655,072 | 1,655,072 | 1,655,072 |
| Earnings per share, SEK* | 6.08 | 4.77 | 5.05 | 3.63 | 3.25 |
| Equity per share, SEK* | 28.54 | 29.55 | 31.70 | 31.35 | 29.69 |
| Cash flow from current operations | |||||
| per share, SEK* | 8.21 | 7.59 | 6.61 | 5.52 | 5.50 |
| Share of risk-bearing capital, % | 69.0 | 63.0 | 57.0 | 50.0 | 43.0 |
| Equity/assets ratio, % | 64.4 | 58.3 | 52.1 | 46.1 | 39.4 |
| Total number of stores | 3,639 | 4,077 | 4,498 | 4,801 | 4,979 |
| Rolling twelve months | |||||
| Earnings per share, SEK* | 13.04 | 11.32 | 11.53 | 8.36 | 7.26 |
| Return on equity, % | 50.3 | 39.0 | 37.7 | 26.5 | 23.8 |
| Return on capital employed, % | 64.5 | 47.9 | 38.1 | 27.0 | 21.9 |
* Before and after dilution.
For definitions of key figures see the annual report
| Six months 2019 | Six months 2018 | |
|---|---|---|
| Asia and Oceania | ||
| External net sales | 17,431 | 15,044 |
| Operating profit | 1,127 | 287 |
| Operating margin, % | 6.5 | 1.9 |
| Europe and Africa* | ||
| External net sales | 71,305 | 67,160 |
| Operating profit | 550 | 712 |
| Operating margin, % | 0.8 | 1.1 |
| North and South America | ||
| External net sales | 19,753 | 15,961 |
| Operating profit | 672 | -447 |
| Operating margin, % | 3.4 | -2.8 |
| Group Functions | ||
| Net sales to other segments | 39,537 | 34,670 |
| Operating profit | 4,591 | 6,663 |
| Eliminations | ||
| Net sales to other segments | -39,537 | -34,670 |
| Total | ||
| External net sales | 108,489 | 98,165 |
| Operating profit | 6,940 | 7,215 |
| Operating margin, % | 6.4 | 7.3 |
* South Africa
| Q2 | Q2 | Six months | Six months | 1 Dec 2017- | |
|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | 30 Nov 2018 | |
| External net sales | 10 | 5 | 17 | 10 | 22 |
| Internal net sales* | 941 | 1,016 | 1,981 | 2,015 | 4,262 |
| GROSS PROFIT | 951 | 1,021 | 1,998 | 2,025 | 4,284 |
| Administrative expenses | -56 | -47 | -96 | -89 | -156 |
| OPERATING PROFIT | 895 | 974 | 1,902 | 1,936 | 4,128 |
| Net financial items** | -6 | 2,237 | -27 | 2,313 | 13,846 |
| PROFIT AFTER FINANCIAL ITEMS | 889 | 3,211 | 1,875 | 4,249 | 17,974 |
| Year-end appropriations | - | - | - | - | -1,164 |
| Tax | -197 | -226 | -413 | -443 | -673 |
| PROFIT FOR THE PERIOD | 692 | 2,985 | 1,462 | 3,806 | 16,137 |
* Internal sales in the quarter consists of royalty of SEK 936 m (1,014) and other SEK 5 m (2) received from group companies and for the six-month period of royalty of SEK 1,970 m (2,011) and other SEK 11 m (4).
** Dividend income from subsidiaries in the quarter consists of SEK 0 m (2,184) and in the six-month period of SEK 2 m (2,234).
| Q2 | Q2 | Six months | Six months | 1 Dec 2017- | |
|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | 30 Nov 2018 | |
| PROFIT FOR THE PERIOD | 692 | 2,985 | 1,462 | 3,806 | 16,137 |
| Other comprehensive income | |||||
| Items that have not been and will not be reclassified to profit or loss | |||||
| Remeasurement of defined benefit pension plans | - | - | - | - | -9 |
| Tax related to the above remeasurement | - | - | - | - | 2 |
| OTHER COMPREHENSIVE INCOME | - | - | - | - | -7 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 692 | 2,985 | 1,462 | 3,806 | 16,130 |
| 31 May - 2019 | 31 May - 2018 | 30 Nov 2018 | |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Property, plant and equipment | 254 | 327 | 289 |
| Other fixed assets | 1,909 | 1,820 | 1,621 |
| 2,163 | 2,147 | 1,910 | |
| Current assets | |||
| Current receivables | 32,372 | 21,260 | 30,233 |
| Cash and cash equivalents | 48 | 93 | 93 |
| 32,420 | 21,353 | 30,326 | |
| TOTAL ASSETS | 34,583 | 23,500 | 32,236 |
| EQUITY AND LIABILITIES | |||
| Equity | 1,795 | 4,147 | 16,471 |
| Untaxed reserves | 96 | 417 | 96 |
| Long-term liabilities* | 13,448 | 182 | 9,294 |
| Current liabilities** | 19,244 | 18,754 | 6,375 |
| TOTAL EQUITY AND LIABILITIES | 34,583 | 23,500 | 32,236 |
* All long-term liabilities are interest-bearing.
** Interest-bearing current liabilities amounts to SEK 9,050 m (10,000). Dividend to be paid amounts to SEK 8,027 m (8,027).
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