H & M HENNES & MAURITZ AB SIX-MONTH REPORT

1 December 2010 – 31 May 2011

THE FIRST HALF-YEAR

• The H&M Group’s sales including VAT increased by 10 percent in local currencies in the first six months of the financial year. Sales increased by 2 percent in comparable units.
  Sales in SEK were strongly negatively affected by currency translation effects.
  Converted into SEK, sales excluding VAT amounted to SEK 52,135 m (51,879).
• Profit after financial items amounted to SEK 9,290 m (12,095). Group profit after tax was SEK 6,875 m (8,950), corresponding to SEK 4.15 (5.41) per share.

THE SECOND QUARTER

• The H&M Group’s sales including VAT increased by 12 percent in local currencies in the second quarter. Sales increased by 2 percent in comparable units.
  Converted into SEK, sales excluding VAT amounted to SEK 27,632 m (27,033).
• Gross profit amounted to SEK 17,057 m (17,808), corresponding to a gross margin of 61.7 percent (65.9).
• Profit after financial items amounted to SEK 5,752 m (7,040). Group profit after tax was SEK 4,257 m (5,209), corresponding to SEK 2.57 (3.15) per share.

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Comments on the second quarter by Karl-Johan Persson, CEO

”Sales were good in the quarter with an increase of 12 percent in local currencies. We continue to gain market shares in a very challenging market, which proves H&M’s strong position. Increasing interest rates, higher energy prices and austerity measures in many economies have decreased consumer spending power. During the spring, the fashion retail industry has been characterised by many price campaigns and special offers.

Our profitability remained strong with an operating margin of 20.3 percent despite strong negative effects from many external factors that were beyond our influence, such as the high cotton prices.
In addition to the cost inflation in the sourcing markets, a provision of SEK 248 million related to our recently started incentive programme for all employees, had a negative effect on profits. Also, the strong development of the Swedish krona continued to have a substantial negative effect on our reported profits in SEK.

We are optimistic about the future for H&M despite challenging conditions both in the sales markets and in the sourcing markets. We see great potential for future growth in existing as well as in new markets. Our business concept works well in all our markets as seen for example in recently added and fast growing markets such as China where we expand more rapidly.”

The information in this Interim 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 22 June 2011.
 
 

CONTACT PERSONS

Nils Vinge, IR                                 +46-8-796 52 50
Jyrki Tervonen, CFO                       +46-8-796 52 77
Karl-Johan Persson, CEO               +46-8-796 52 33
Switchboard                                  +46-8-796 55 00

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

H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on NASDAQ OMX Stockholm. The company’s business concept is to offer fashion and quality at the best price. In addition to H&M, the group includes the brands COS, Monki, Weekday and Cheap Monday as well as H&M Home. The H&M Group has approximately 2,300 stores in 40 markets including franchise markets. In 2010, sales including VAT were SEK 126,966 million and the number of employees was more than 87,000. For further information, visit www.hm.com.