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2010 was a very good year for H&M - CEO
27
Jan '11
H & M Hennes & Mauritz AB announced full year report of 2010.

Comments by Karl-Johan Persson, CEO
”2010 was a very good year for H&M with a sales increase of 15 percent. Profit after financial items increased to SEK 25 billion. During the year we improved our market position further with a strengthened customer offering by giving the customers even more fashion and quality at the best price. The economy improved from 2009 but in several countries the economic situation was still uncertain and difficult.

In the fourth quarter, sales increased by a satisfactory 15 percent. The operating margin, of approximately 24 percent, continued to be at a high level. Excluding currency translation effects, profit after financial items was in line with the previous year.

In 2011, we plan to open around 250 stores net in new and existing markets. We will open in five new markets. At the same time we are expanding our online and catalogue sales. At the start of 2011, we are launching the new H&M Shop Online in the markets where we offer online and catalogue sales already. Shopping experience and functionality have been improved. Around year-end we plan to start online sales in USA, the world's largest online market.

External factors change in the markets of production. Raw material prices have increased; cotton prices for example almost doubled in 2010. Naturally, H&M has to adapt to changing conditions but always in a way that is in accordance with our business concept – to offer customers fashion and quality at the best price – and in that way increase the opportunities for us to continue to take market shares.

We are optimistic about the future and we plan to increase sales in comparable units in 2011.”

Full-Year

• The H&M Group's sales excluding VAT increased by 15 percent in local currencies.
Converted into SEK, the increase was 7 percent and sales amounted to SEK 108,483 m (101,393).
• Strong sales increase of 5 percent in comparable units in local currencies.
• Gross profit amounted to SEK 68,269 m (62,474), corresponding to a gross margin of 62.9 percent (61.6).
• Profit after financial items amounted to SEK 25,008 m (22,103), an increase of 13 percent.
Group profit after tax was SEK 18,681 m (16,384), corresponding to SEK 11.29 (9.90) per share.

The fourth quarter

• The H&M Group's sales excluding VAT increased by 15 percent in local currencies.
Converted into SEK, the increase was 6 percent and sales amounted to SEK 29,711 m (28,011).
Sales in comparable units increased by 7 percent in local currencies.
• Gross profit amounted to SEK 18,792 m (18,581), corresponding to a gross margin of 63.2 percent (66.3).
• Profit after financial items amounted to SEK 7,178 m (7,992), a decrease of 10 percent.
Adjusted for currency translation effects, profit after financial items would have been in line with the previous year.

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