H&M Hennes & Mauritz AB: Full-year report 2024

FOURTH QUARTER (1 SEPTEMBER 2024 - 30 NOVEMBER 2024)

• The H&M group's net sales in the fourth quarter amounted to SEK 62,193 m (62,650). In local currencies net sales increased by 3 percent.
• Gross profit increased to SEK 33,942 m (33,657). This corresponds to a gross margin of 54.6 percent (53.7).
• Selling and administrative expenses amounted to SEK 29,303 m (29,314). In local currencies these expenses increased by 2 percent.
• Operating profit increased to SEK 4,624 m (4,332), corresponding to an operating margin of 7.4 percent (6.9). Operating profit was charged with wind-down costs of around SEK 200 m relating to stores belonging to Monki as well as provisions to HIP of SEK 236 m (177).
• The result after tax nearly doubled to SEK 3,081 m (1,569*), corresponding to SEK 1.92 (0.97*) per share.
• The stock-in-trade amounted to SEK 40,348 m (37,358). Extended transport times associated with the situation in the Red Sea and Black Friday that occurred later than in the previous year had a significant impact on inventory. The composition of the stock-in-trade is assessed to be good.
• Cash flow from operating activities before changes in working capital, increased by 16 percent and amounted to SEK 9,870 m (8,418). Cash flow from operating activities amounted to SEK 6,974 m (9,207).

FULL-YEAR (1 DECEMBER 2023 - 30 NOVEMBER 2024)

• The H&M group's net sales in the financial year 2024 amounted to SEK 234,478 m (236,035). In local currencies, net sales increased by 1 percent.
• Gross profit increased by 4 percent to SEK 125,299 m (120,896). This corresponds to a gross margin of 53.4 percent (51.2).
• Selling and administrative expenses amounted to SEK 107,915 m (107,330). In local currencies the expenses increased by 1 percent.
• Operating profit increased to SEK 17,306 m (14,537), corresponding to an operating margin of 7.4 percent (6.2).
• Operating profit increased by 28 percent compared with the previous year excluding the result from investments in associated companies and joint ventures.
• The result after tax increased by 33 percent to SEK 11,584 m (8,716*), corresponding to SEK 7.21 (5.37*) per share.
• Cash flow from operating activities before changes in working capital increased by 26 percent and amounted to SEK 36,745 m (29,106). Cash flow from operating activities amounted to SEK 31,756 m (33,949).
• Cash and cash equivalents plus undrawn credit facilities were SEK 35,756 m (44,570).
• The year's increase in profit means that SEK 236 m (177) has been allocated to the H&M Incentive program (HIP), which is for all employees.

• The H&M group's sales in the period 1 December 2024 - 28 January 2025 increased by 4 percent in local currencies compared with the same period the previous year.
• The H&M group's greenhouse gas emissions in scope 3** reduced by at least 23 percent in 2024 compared to the 2019 baseline according to preliminary figures.
• CapEx in comparable currency is planned to amount to SEK 11-12 billion for 2025. This is in line with CapEx in 2024, which amounted to SEK 11.6 billion. The investments are mainly allocated to the store portfolio and the supply chain.
• The first H&M store in Brazil will open in São Paulo towards the end of 2025.
• The board of directors is proposing to the 2025 annual general meeting that an ordinary dividend of SEK 6.80 per share (6.50) is paid in two instalments.
• The board of directors will also ask the annual general meeting for a general authorisation allowing the board to choose to buy back the group's own B shares.

"Sales and operating profit increased in the fourth quarter driven by strong online sales, well-received women's fashion collections and effective cost control. By focusing on our core business and delivering on our plan, we are on track towards long-term, profitable growth." Daniel Ervér, CEO.

*See note 5.
**Scope 3 excludes the use of sold products.

Comments by Daniel Ervér, CEO

After one year as CEO, I'm confident that we are on the right track. We have set a clear direction focusing fully on our core business: improving what makes the biggest difference for the customer and removing what doesn't. We are proud of the progress we have made to further strengthen our products, shopping experience, and brand building. While there is a lot left to do, we have a strong plan to drive the long-term growth we are aiming for.

Sales grew by 3 percent in local currencies in the fourth quarter compared to last year. Our Autumn collection launched with a series of events in fashion capitals such as Milan, London and New York - bringing music, culture and fashion together - was very well received. Gross margin and operating profit also grew, despite wind-down costs and increased investments in the customer offering, marketing and store optimisation. Strong online sales together with improved product presentation and a more inspiring shopping experience, well received womenswear collections and effective cost control all contributed to a positive development in the quarter. For the full year the operating margin was 7.4 percent, and earnings per share rose by 34 percent to SEK 7.21.

During 2024, we made significant improvements. Our priority was the H&M product offering, with an initial focus on womenswear, where we increased our trend responsiveness and overall assortment relevance. In the fourth quarter, full price selling of womenswear increased in all channels.

We accelerated the pace of improvements to our supply chain, increasing flexibility and product availability across channels. For example, we continue to deepen partnerships with our suppliers, shorten our product development process starting with womenswear, improve our demand forecasting, further develop our nearshoring capacity, and expand the use of RFID.

We opened 88 new stores and continued to optimise our store portfolio. With more than 4,200 stores, upgrading our store portfolio will remain a priority for us.

We are simplifying team structures to build an even more efficient organisation. To streamline and optimize our operations, we also discontinued Afound during the year. During 2025, we plan to integrate the Monki brand into Weekday, both in stores and online.

We want to use our size and scale to push the fashion industry towards a more sustainable future. Our goal is to reduce greenhouse gas emissions by 56 percent by 2030. Preliminary results show that our scope 3 emissions decreased by at least 23 percent compared to our 2019 baseline. By integrating sustainability further into our business plans and through continued investments in decarbonising our supply chain, we are well positioned to reach this long-term goal.

As we look ahead to 2025, we will continue to strengthen our core business and elevate our customer offering, while continuing the strong work on cost efficiency. We speed up our product creation processes, increase the precision in aligning supply with demand, and improve the product availability for our customers online as well as in stores by integrating both channels more closely with each other. We are maintaining the level of investments compared to last year and will primarily target our stores and supply chain. We will also enhance our digital experience and continue to reinforce our brand presence in major fashion cities.

While continued challenging macroeconomic conditions and geopolitical uncertainty may impact the consumer sentiment during 2025, we see some positive signs such as inflation and interest rates going down. Our diversified supply chain gives us the flexibility needed to mitigate negative external impact in different markets. This, together with our business idea - fashion and quality at the best price in a sustainable way - creates a strong resilience and positions us well for growth in the global fashion market.

Overall, there is great potential in our core business, with a focus on organic growth. We have a clear plan for the years ahead, driving profitable and long-term growth while supporting our purpose of liberating fashion for the many. Thanks to the dedication and passion of our entire team, we will take further important steps forward in 2025.

COMMUNICATION IN CONJUNCTION WITH THE FULL-YEAR REPORT
The full-year report for the financial year 2024, i.e., 1 December 2023 - 30 November 2024, will be published at 08:00 CET on 30 January 2025, followed by a combined press and telephone conference at 09:30 CET for the financial market and media, hosted by CEO Daniel Ervér, CFO Adam Karlsson and Head of IR Joseph Ahlberg. A presentation of the report followed by a Q & A session will be held in English.

Location: H&M's head office in Stockholm, Mäster Samuelsgatan 49, 3rd floor, Ljusgården. The event will be broadcasted online and questions can also be asked by telephone. For log in details please register:
https://app.webinar.net/xvGblyjg07j

To book interviews for media in conjunction with the full-year report on 30 January 2025, please contact: Anna Frosch Nordin, Head of Media Relations, telephone [phone], [e-mail].

Please note that there will not be a separate telephone conference in the afternoon CET.

CONTACT

Joseph Ahlberg, Head of IR	[phone]
Daniel Ervér, CEO	[phone] (switchboard)
Adam Karlsson, CFO	[phone] (switchboard)

H & M Hennes & Mauritz AB (publ)
SE-106 38 Stockholm
Phone: [phone], e-mail: [e-mail]
Registered office: Stockholm, Reg. No. 556042-7220

For more information about the H&M group visit hmgroup.com.

Information in this full-year report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under the
EU Market Abuse Regulation (EU) No 596/2014. The information was submitted for publication by the abovementioned persons at 08:00 (CET) on 30 January 2025. This interim report and other information about the H&M group are available at hmgroup.com.

H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm. H&M'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, & Other Stories, H&M HOME and ARKET as well as Sellpy. For further information, visit hmgroup.com.