H & M Hennes & Mauritz AB Six-month report

First half-year (1 December 2015 — 31 May 2016)

  · The H&M group’s sales including VAT increased by 7 percent in local
currencies during the first six months of the financial year. Converted into
SEK, sales including VAT increased by 5 percent to SEK 104,965 m (100,024).
Sales excluding VAT amounted to SEK 90,565 m (86,143).
  · Profit after financial items amounted to SEK 10,329 m (13,158). The group’s
profit after tax amounted to SEK 7,902 m (10,066), corresponding to SEK 4.77
(6.08) per share.

Second quarter (1 March 2016 — 31 May 2016)

  · The H&M group’s sales including VAT increased by 5 percent in local
currencies during the second quarter. Converted into SEK, sales including VAT
increased by 2 percent to SEK 54,341 m (53,233). Sales excluding VAT amounted to
SEK 46,874 m (45,867).
  · Gross profit amounted to SEK 26,980 m (27,245). This corresponds to a gross
margin of 57.6 percent (59.4).
  · Profit after financial items amounted to SEK 7,002 m (8,435). The group’s
profit after tax amounted to SEK 5,357 m (6,453), corresponding to SEK 3.24
(3.90) per share. Profits in the second quarter were negatively affected mostly
by higher purchasing costs due to the strengthened US dollar and by increased
markdowns.
  · Continued very satisfactory development for H&M’s e-commerce. Successful
launch of H&M’s e-commerce in nine countries during the quarter: in Slovenia,
Croatia, Estonia, Latvia, Lithuania, Luxembourg, Ireland, Japan and Greece.


  · H&M’s e-commerce will be launched in Canada and South Korea during autumn
2016. A total of 11 new H&M online markets will thus be added in 2016 which
means that H&M will offer e-commerce in 34 markets by the end of the year.
  · A continued fast roll-out of new H&M online markets is planned for 2017.
  · The H&M group’s sales including VAT in the period 1 - 21 June 2016 increased
by 7 percent in local currencies compared to the same period last year.
  · The H&M group plans a net addition of around 425 new stores for the
2015/2016 financial year. New markets for 2016 are Puerto Rico, which has opened
this June, and New Zealand and Cyprus which will open during the autumn.
  · In 2017, H&M plans to open stores in four to five new markets of which
Colombia will be one.

Comments by Karl-Johan Persson, CEO
“Sales including VAT in the second quarter amounted to SEK 54 billion and profit
before tax to SEK 7 billion. In local currencies, sales increased by 5 percent.
The sales increase in March and April was significantly below our plan. These
two months were negatively affected by cold spring weather in many of our
markets. In May, sales were much better with an increase of 9 percent, or 11
percent when adjusted for calendar effects.

Profits in the second quarter have been affected by a continued negative US
dollar effect, but also by increased markdowns and the costs of our long-term
investments. The fact that the sales increase in the quarter was below plan,
naturally also had an impact on profits.

It has been a challenging half-year for fashion retail in many markets, but we
have great confidence going forward and are continuing to develop our offering
further within all our brands.

The combination of strong brands, a large body of retail stores in good
locations and a successful e-commerce business puts us in a unique market
position for future growth. Although e-commerce is growing fast, there is still
great potential for the H&M group to continue to expand through physical stores
– so for us, our continued focus is to grow both through physical stores and
online, as well as to integrate these two sales channels. Our stores and online
business complement each other well, and the key to the future is to continue to
integrate these channels even further to make it as convenient and easy as
possible for our customers.

So far this year we have opened nine new online markets, which means that we now
offer H&M’s e-commerce in 32 markets including Japan and Greece, where we
recently successfully launched our e-commerce. A further two new online markets
will open during the autumn: Canada and South Korea. And in 2017 we will
continue the rapid roll-out of H&M’s online shop to further markets.

Today we have more than 4,000 stores in strong retail locations in a total of 62
markets. We are signing very favourable store leases and this year we plan a net
addition of approximately 425 stores. New markets this year are Puerto Rico,
where we had a successful opening in San Juan in June, and also New Zealand and
Cyprus, where we will open in the autumn. Next year we plan to open four or five
new H&M markets, of which Colombia will be one.

Our work on sustainability is an important part of our offering. For six years
in a row H&M has been named by Ethisphere as one of the most ethical companies
in the world. We have now climbed to 20th place in the ranking of the world’s
most sustainable companies, and according to the Global 100 index we are the no.
1 company in our sector. H&M is also included in the Dow Jones Sustainability
Index of the most sustainable companies in Europe and the world.”


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 2016. This interim report and
other information about H&M, is available at www.hm.com

 (http://www.hm.com)

Contact
Nils Vinge, IR           +46-8-796 52 50
Karl-Johan Persson, CEO  +46-8-796 55 00 (switchboard)
Jyrki Tervonen, CFO      +46-8-796 55 00 (switchboard)

Invitation to press and telephone conference in conjunction to the six-month
report is available on hm.com.

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 Stockholm. The company’s business idea is to offer fashion and quality at
the best price in a sustainable way. In addition to H&M, the group includes the
brands COS, Monki, Weekday, Cheap Monday, & Other Stories as well as H&M Home.
The H&M group has more than 4,000 stores in 62 markets including franchise
markets. In 2015, sales including VAT amounted to SEK 210 billion and the number
of employees was more than 148,000. For further information, visit www.hm.com.