Full-year (1 December 2019 – 30 November 2020)
- The H&M group’s net sales amounted to SEK 187,031 m (232,755) in the 2020 financial year. In local currencies, net sales decreased by 18 percent. Sales development was significantly negatively affected by the pandemic, particularly in the second quarter when stores were temporarily closed in most markets; at the most, approximately 80 percent of the group’s stores were closed.
- A series of strong measures was rapidly implemented during the year. This crisis work covered all parts of the business, including product purchasing, investments, rents, staffing and financing. Greater emphasis was placed on the well-developed digital channels, which partly compensated for the drop in in-store sales.
- Gross profit amounted to SEK 93,544 m (122,453). This corresponds to a gross margin of 50.0 percent (52.6).
- Profit after financial items amounted to SEK 2,052 m (17,391). Excluding IFRS 16, profit after financial items amounted to SEK 1,691 m (17,391).
- The group’s profit after tax amounted to SEK 1,243 m (13,443), corresponding to SEK 0:75 (8:12) per share.
Fourth quarter (1 September 2020 – 30 November 2020)
- The H&M group’s net sales amounted to SEK 52,549 m (61,694) in the fourth quarter. In local currencies, net sales decreased by 10 percent. A strong recovery at the start of the quarter was significantly slowed when the second wave of the pandemic again led to extensive new restrictions and lockdowns. At the most, just over 20 percent of the group’s stores were closed.
- Gross profit amounted to SEK 27,375 m (33,287) which corresponds to a gross margin of 52.1 percent (54.0).
- Profit after financial items amounted to SEK 3,665 m (5,403). Excluding IFRS 16, profit after financial items amounted to SEK 3,538 m (5,403).
- The group’s profit after tax amounted to SEK 2,485 m (4,212), corresponding to SEK 1:50 (2:54) per share. Excluding IFRS 16, profit after tax amounted to SEK 2,387 m (4,212).
- The H&M group’s liquidity is very good. As at 30 November 2020, cash and cash equivalents amounted to SEK 16,540 m (12,312). The group’s long-term financing and liquidity buffer have been strengthened. Cash and cash equivalents plus undrawn credit facilities increased to SEK 46,595 m (24,169). Net debt/EBITDA was 0.0 (0.2).
- The board aims for the H&M group to have sustainable and profitable growth, thereby allowing a good return to the shareholders. The company’s financial position remains strong and at present the board’s assessment is that there are good prospects of a cash dividend in autumn 2021. However, since it is not currently possible to get a full overview of the consequences of the ongoing pandemic, during the year the board will come back with a proposed date and level for resuming the dividend.
- As a result of the second wave of the pandemic and the associated restrictions and temporary closure of, at the most, more than 1,800 stores, i.e. 36 percent of the group’s total of around 5,000 stores, net sales decreased by 23 percent in local currencies in the period 1 December 2020 – 27 January 2021 compared with the same period the previous year.
- Streamlining the invoice and payment process will have material effects on the H&M group’s working capital. Based on 2020 purchasing volumes, this could free up around SEK 10 billion in 2021.
- A framework has been produced to allow the issue of sustainability-linked bonds with the aim of financing, among other things, an accelerated transition to recycled materials. The H&M group’s goal is for 100 percent of the materials used in the products to be recycled or come from other more sustainable sources by 2030. By 2025 at least 30 percent are to be recycled materials.
- Online and physical stores are being increasingly integrated, with continued optimisation of the store portfolio. Around 100 new stores are planned to open in 2021, while 350 stores are planned to close in the same period – mainly in established markets.
“The H&M group stands strong after all the challenges brought by the pandemic. Thanks to much-appreciated collections, rapid and profitable online growth and strict cost control, the company succeeded in ending the year in profit and in a strong financial position,” says Helena Helmersson, CEO.
Other Comments by Helena Helmersson, CEO
“With strong, profitable online growth and good cost control we succeeded in ending the year in profit and with a strong financial position. Taking decisive measures quickly, combined with an attractive customer offering, led to a better recovery than expected up until the second wave of the pandemic struck. Our measures to mitigate the negative effects of ongoing restrictions and closures are continuing. Although the situation at the time of writing is highly challenging, the H&M group stands strong.
The recent years’ transformation initiatives and investments, focusing on the digital, have been especially important for managing the crisis and this work is continuing at full speed. Customers want to meet us where, when and how they choose – in the stores, on our websites, on digital marketplaces and on social media. They are showing us clearly that they appreciate a convenient and inspiring experience in which the channels interact and strengthen each other. We are continuing our initiatives for digital growth, integration of the channels and optimisation of the store portfolio. Speed and flexibility will be even more important going forward, particularly in the supply chain, to ensure the best customer offering and increase availability in all channels.
Our key focus remains on developing strong, unique brands in order to always offer the best combination of fashion, quality, price and sustainability. The percentage of recycled and sustainable materials in the collections is consistently increasing and our brands are offering an ever-growing range of services for a more sustainable lifestyle. Together with our transformation initiatives this will help increase our resilience and adaptability and will contribute to sustainable and profitable growth for the H&M group.”