H&M Hennes & Mauritz AB Six -month report and other news

First half-year  (December 1, 2021 – May 31, 2022)

  • The H&M group’s net sales in SEK increased by 20 % in the first half-year to SEK 103,670 m (86,569). In local currencies the increase was 15 %.
  • Well-received collections led to a higher share of full-price sales and lower costs for markdowns.
  • Gross profit increased to SEK 54,106 million (44,106 million). This corresponds to a gross margin of 52.2 % (50.9).
  • Operating profit increased to SEK 5,446 million (2,724), corresponding to an operating margin of 5.3 %  (3.1 %). For rolling 12 months the operating margin was 8.3 % (4.9 %).
  • The group’s profit after tax increased to SEK 3,899 million (1,697 million), corresponding to SEK 2.36 (1.03) per share.
  • Cash flow from operating activities amounted to SEK 12,591 million (20,219 million).
  • Financial net cash increased to SEK 16,313 million (12,799 million). Cash and cash equivalents plus undrawn credit facilities amounted to SEK 44,483 million (43,517 million).

Second quarter ( March 1, 2022 – May 31, 2022)

  • Net sales increased by 17 % to SEK 54,504 million (46,509 million). In local currencies the increase was 12 %. Excluding Russia, Belarus and Ukraine sales increased by 17 % in local currencies.
  • Gross profit increased to SEK 29,846 million (25,049 million). This corresponds to a gross margin of 54.8 % (53.9 %).
  • The well-received collections led to costs for markdowns decreasing by around 1 percentage point in relation to sales.
  • Operating profit increased to SEK 4,988 million (3,852 million), corresponding to an operating margin of 9.2 % (8.3 %).
  • Profit after financial items increased by 33 % to SEK 4,782 million (3,593 million).
  • The group’s profit after tax increased to SEK 3,682 million (2,767 million), corresponding to SEK 2.22 (1.67) per share.
  • The board of directors has decided to buy back own B shares for SEK 3 billion starting from 29 June 2022.
  • Sales in the month of June 2022 is expected to decrease by 6 percent in local currencies compared with June 2021. The paused sales in Russia, Belarus and Ukraine represent 5 percentage points of the decrease. The June figure should be seen in the light of a very strong comparison base in June 2021, an increase by 24 percent, while July and August increased by 6 percent.
  • H&M is accelerating its expansion in Latin America. A large number of leases have been signed for new stores.

“The H&M group’s sales increase in the quarter is a result of well-received collections with increased full-price sales and lower markdowns. With a well-positioned customer offering, combined with physical and digital sales channels that strengthen each other, we are fully focused on meeting customers’ ever-increasing expectations of affordable and sustainable fashion,” says Helena Helmersson, CEO.

 Comments by Helena Helmersson, CEO:

“Well-received collections have led to strong development, with a further increase in full-price sales and decrease in markdowns. Sales in physical stores increased substantially while online continues to do well. This once again shows the value of having both physical and digital channels which strengthen and complement each other. The integration of the sales channels is therefore ongoing, in parallel with continual initiatives – in particular within tech, the supply chain and sustainability.

Although most of the restrictions associated with the Covid-19 pandemic essentially seem to be over, many challenges remain. Disruption and delays still exist in the supply chain, but are gradually being eased. At the same time, there is substantial inflation. The situation associated with the war in Ukraine and its consequences for our business are continually being evaluated. We are actively looking at various options to find solutions that give consideration to customers and colleagues as well as the impact on the business as a whole.

To navigate in a rapidly changing world it is more important than ever to be flexible and able to take quick decisions. As a direct consequence of the challenges in the world around us we are carrying out extensive work to prioritise initiatives, redistribute resources and ensure continued good profitability. We have a well-positioned customer offering and are fully focused on meeting customers’ ever-increasing expectations. Despite the significant inflation in the world, customers must always feel confident that with all the H&M group’s brands they will find the best combination of fashion, price, quality and sustainability. With a strong customer focus, committed colleagues and a robust financial position we see good opportunities for profitable, long-term and sustainable growth.”

For more information: www.hmgroup.com/investors


H&M decides to buy back own shares for SEK 3 billion

The board of directors of H & M Hennes & Mauritz AB has decided to utilise the authorisation granted by the 2022 annual general meeting to acquire the company’s own B shares in order to transfer capital to the shareholders and adjust the company’s capital structure.

The share buyback programme will be carried out in accordance with the EU Market Abuse Regulation (MAR) and Commission Delegated Regulation (EU) 2016/1052 (the so-called Safe Harbour Regulation). Acquisitions of shares will be managed by an investment firm or credit institution that makes its trading decisions regarding the timing of the acquisitions of H&M’s shares independently of H&M.

In conjunction with the full-year report for 2021 the board of H&M communicated its intention to buy back shares for a total of SEK 3 billion in the period up to the 2023 annual general meeting. The board has now decided to repurchase shares for this amount. The purpose of the purchases is to distribute surplus liquidity and thereby adjusting H&M’s capital structure by reducing its capital. Accordingly, the board of directors intends to propose to the 2023 annual general meeting that the repurchased shares are cancelled. It is intended that the reduction in share capital will be met by a corresponding bonus issue so that the level of share capital is restored.

The share buyback programme is subject to the following terms:

  • Buybacks are to take place on Nasdaq Stockholm in accordance with its Rule Book for Issuers, MAR and the Safe Harbour Regulation.
  • The shares shall be purchased at a per-share price within the price range (spread) on Nasdaq Stockholm applicable from time to time, meaning the spread between the highest purchase price and the lowest selling price prevailing and disseminated by Nasdaq Stockholm from time to time.
  • The maximum purchase amount is SEK 3 billion. In accordance with the Swedish Companies Act, H&M may not buy more shares than would bring H&M’s holding of own shares to ten percent of the shares in H&M.
  • The programme begins on June 29, 2022 and continues up to and including November 30, 2022.
  • Payment for the shares is to be made in cash.

Without in any way restricting the discretion and independence of the investment firm or credit institution in executing its mandate, the firm or institution will endeavour to carry out purchases reasonably evenly spread over the duration of its mandate.

The total number of shares in H&M is 1,655,072,000, of which 194,400,000 are A shares and 1,460,672,000 are B shares. H&M currently holds none of its own shares.