The full-year report published January 29, 2021 included the following information:

Dividend Policy

The board of directors’ intention is for the H&M group to continue to provide shareholders with a good return while ensuring that, growth and investments in the business can proceed with a continued strong financial profile and freedom of action. Based on this, the board of directors has proposed a dividend policy stating that the ordinary dividend over time should exceed 50 percent of profit after tax and additionally that identified surplus liquidity – taking into consideration the capital structure target and investment requirements – can be distributed to shareholders through an extra dividend or a buyback programme.

Dividend Comment

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.

Capital Structure

The H&M group advocates a conservative leverage ratio, aiming for a strong capital structure with strong liquidity and financial flexibility. It is essential that, as in the past, expansion and investments can proceed with continued freedom of action.

The capital structure is defined as net debt in relation to EBITDA. Over time, this should not exceed 1.0 x EBITDA. Net debt / EBITDA was 0.0 (0.2) as of 30 November 2020.