#Textiles & Apparel / Garment
H & M Hennes & Mauritz six-month report
First half-year (1 December 2020 – 31 May 2021)
• The H&M group’s net sales in local currencies increased by 12 percent in the first half of 2021 compared with the corresponding period last year. Converted into SEK the group’s net sales amounted to SEK 86,569 m (83,612). The pandemic led to reduced footfall as a result of continued restrictions and store closures. At the most, around 1,800 stores were temporarily closed, i.e. around 36 percent of the group’s total number of stores.
• Profit after financial items increased to SEK 2,204 m (-3,978). The group’s profit after tax amounted to SEK 1,697 m (-3,063), corresponding to SEK 1.03 (-1.85) per share.
• Cash flow from operating activities amounted to SEK 20,219 m (3,916).
• Net cash amounted to SEK 12,799 m (-11,919).
• Online sales have continued to develop very well, even as stores have been allowed to reopen.
Second quarter (1 March 2021 – 31 May 2021)
• The H&M group’s net sales in local currencies increased by 75 percent in the second quarter 2021 compared with the corresponding period last year. Converted into SEK net sales amounted to SEK 46,509 m (28,664). At the start of the quarter around 1,300 stores were temporarily closed and at the end around 140 stores remained closed.
• Online sales increased by 40 percent in local currencies and 32 percent in SEK.
• Gross profit increased by 89 percent to SEK 25,049 m (13,284). This corresponds to a gross margin of 53.9 percent (46.3).
• Continued good cost control. Profit after financial items increased by SEK 10 billion to SEK 3,593 m (-6,482).
• Profit after tax amounted to SEK 2,767 m (-4,991), corresponding to SEK 1.67 (-3.02) per share.
• The stock-in-trade decreased to SEK 35,866 m (40,000).
• In the second quarter the programme to streamline invoice management and payment processes freed up a further just over SEK 3 billion of working capital.
• In March H&M opened online in Qatar via franchise and during the quarter H&M was also successfully launched on the e-commerce platform Zalora in Indonesia, the Philippines, Malaysia and Singapore.
• H&M’s customer loyalty programme now has around 130 million members in 27 markets. An increase of 50 million members in one year.
• Sellpy, the second-hand platform part-owned by H&M group, was launched in an additional 20 markets and is now available in a total of 24 markets.
• Net sales in the period 1–28 June 2021 increased by 25 percent in local currencies compared with the corresponding period last year. Sales are still affected by reduced footfall as a result of continued restrictions and store closures. At present, around 95 stores are still temporarily closed.
• The company’s financial position remains strong and the board’s assessment is that there will be very good prospects of a cash dividend in autumn 2021.
• Cambodia will become a new H&M market via franchise in 2022.
“With our much-appreciated collections, our ongoing transformation and the fact that markets are gradually being opened up, our recovery is strong. Online sales have continued to develop very well even as the stores have opened, which shows that customers appreciate the collections and being able to shop via their preferred channel,” says Helena Helmersson, CEO.
Comments by Helena Helmersson, CEO
“As more and more people are vaccinated and restrictions are eased, the world is gradually opening up and customers can once again visit our stores. With the combination of much-appreciated collections, rapid adaptation and further improvements, our recovery is strong. Despite continued restrictions, sales increased significantly compared with the previous year.The third quarter have started well and we are almost back at the level we were at before the pandemic. I am proud of all our colleagues’ commitment and drive during this challenging period. The crisis has made us even stronger as a company. The lessons we have learned are enabling us to be even better and faster at making the most of new opportunities, and we are optimistic about the future.
Both existing and new customers are showing every day that they appreciate our customer offering with the best combination of fashion, price, quality and sustainability. Our long-term digital investments and increasingly integrated sales channels, along with more efficient ways of working and our customer focus, have been important during the pandemic. By being flexible and adapting quickly, all parts of the company have contributed to the recovery. At the same time, we can never sit back and relax. We are driven by a passion to continually improve the customer offering and the customer experience.
Our transformation therefore continues at full speed in order to meet customers’ increased expectations and strengthen our competitiveness further. Here I would like to highlight our initiatives within tech, AI and the supply chain, where we have made great progress while still seeing further opportunities within areas such as greater precision and local relevance.
In the wake of the pandemic we are seeing increasing demand globally for fashion that provides value for money and is sustainable, which we are well positioned for. Our brands are also offering an increasing number of services for a more sustainable lifestyle. In combination with our work to become circular and climate positive, we are also increasing the share of sustainable and renewable materials. We are developing the existing business and are also creating new complementary revenue streams. Together with profitable online growth and continued store optimisation this will contribute to long-term, profitable and sustainable growth for the H&M group.”
Read more about our initiatives in the section Initiatives for an improved customer experience on page 11.
Communication in conjunction with the six-month report
The six-month report, i.e. 1 December 2020 – 31 May 2021, will be published at 08:00 CEST on 1 July 2021 and will be followed by a telephone conference at 09:00 CEST for the financial market and media hosted by CEO Helena Helmersson, CFO Adam Karlsson and Head of IR Nils Vinge. The telephone conference will be held in English.
