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Research Tree provides access to ongoing research coverage, media content and regulatory news on HENNES & MAURITZ AB-B SHS. We currently have 5 research reports from 1 professional analysts.
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HENNES & MAURITZ AB-B SHS
HENNES & MAURITZ AB-B SHS
The best is coming
31 Jan 17
Sales in Q4 edged up 8.3% to reach SEK52,720m. Full-year sales were up 6.3% (+7% in local currencies) to SEK192,267m. A marked slump was experienced in Germany, France and Spain which posted almost flat sales in local currencies (0%, -1% and +1% respectively). An impressive sales growth was reported in Scandinavian countries, Russia (+38%), Turkey (+41%), Canada (+15%), and in newer footprints. In Q4, gross profit increased by 7.2% to SEK30,027m, i.e. a gross margin of 57% compared to 57.5% a year earlier. The operating margin dwindled by 60bp to 13.9%, generating an operating profit of SEK7,354m (+3.8%). Net profit for the three months was up 7% to SEK5,914m. For the full-year, the gross margin lost 180bp to 55.2%. The slight increase in the quarter’s profitability partially mitigated the full-year profit retreat. The full-year operating profit dropped 11.6% to SEK23,823m. The operating margin stepped back by 250bp to 12.4%. Net profit dropped by 10.8% to SEK18,636m. Inventories surged by 26% yoy (in local currencies) to reach SEK31,732m. Gross cash shrank by 27% at SEK9,446m. Early FY2017 has sent positive growth signs with sales edging up 6% and 11% in local currencies respectively in December and January. The company has stepped up its growth target to 10-15% in local currencies per year starting from 2017 with much more effort on profitability. H&M operates in 35 online markets and 4,351 shops in 64 markets. The proposed dividend remained unchanged at SEK9.75, which will be paid in two instalments for the first time.
FY 16 margins under pressure
30 Sep 16
In the first nine months, sales growth was decent but margins were under external and internal pressures. Sales were up 5.6% to reach SEK139,547m, boosted by a rise of 6.4% in Q3 (SEK48.982m) compared to 5.1% in H1 16. Excluding Germany and Switzerland, which posted respective sales decreases of 1% and 9%, all regions experienced favourable momentum at local currencies led by the USA and Sweden (+7%). Following the weakening of the British pound, the performance in the UK turned negative (-5%) while, at local currency, revenue grew by 2%. Profitability was hit by the surging purchasing costs following the appreciation of the US$ as well as the heavy mark-downs applied in the current unusually warm weather. Moreover, operating investments incurred in the expansion plan are pulling margins down. The operating margin slipped to 11.8% (-3.2pc), dwindling the operating profit by 17% to SEK16,469m. Q3 operating profit was down 9% to SEK6,247m, i.e. an operating margin of 12.8%. Net profit amounted to SEK12,722m (-17.2%) since the beginning of the year. The slowdown is likely to continue in Q4 due to the warm September in which sales are expected to increase by 1% in local currencies. Capex surged by 75.7% to SEK9,378m. The operating cash flow remained almost flat at SEK17,549m. Stock in trade ballooned by 25.7% compared to year-end 2015 to reach SEK31,231m, i.e. 22.4% of sales. The financial position remains strong even with slipping cash to SEK8,68m. The group is currently operating through 4,135 stores and 35 on-line markets.
22 Jun 16
The challenging trading conditions are weighing on the fast fashion sector. H&M reported a modest 5.1% sales growth in 1H16 to SEK90.6bn. The gross margin retreated by 250bps to 54.9% leading to a gross profit of SEK49.68bn. Operating profit dropped from SEK13bn in 1H15 to SEK10.2bn in 1H16, i.e. a 21.3% decline. The operating margin fell to 11.3% vs. 15.1 in 1H16. The net profit amounted to SEK7.9bn versus SEK10.06bn a year earlier. 2Q16 posted a poor performance of 2.2% pulled down by unfavourable sales momentum in March. The quarter’s operating profit amounted to SEK6.95bn vs. SEK8.35bn in 2Q15. Most markets experienced a tough trading backdrop led by Switzerland which posted a 10% sales fall. Germany, the main market accounting for 17.2% of FY15 sales, reported a slight decrease of 0.3%. Favourable momentum was noted in the USA with a performance of 9%. Stock in trade ballooned by 29% to SEK25.3bn, i.e. 50 days of sales rolling out twelve months. The expansion plan continued in the 1H with 153 net new openings, bringing the total stores to 4,077 as of May 2016, of which only 171 franchises. 1H16 Capex amounted to SEK5.6bn versus SEK4.7bn a year earlier. The 3Q16 also looks challenging as sales including VAT in the 1-21 June 2016 period increased by 7% in local currencies.
The warm weather caught the Q1 performance in a whirlwind
06 Apr 16
The warm weather has put the Q1 performance under pressure. Sales growth slowed to 9% (in local currencies) yoy compared to 15% in Q1 15 and 11% in FY15 due to the markdowns on large stocks of winter garments. Sales amounted to SEK43.7bn vs. SEK40.3bn a year earlier. Aside from the price deflation, the mild weather caused a slump in demand for winter collections and pulled down sales. The heavy discounts coupled with the higher purchasing costs crumbled margins and deteriorated the operational performance. The gross margin lost 320bp to 52% dropping the operating profit by 29.5% to SEK3.3bn. Net profit decreased from SEK3.6bn to SEK2.6bn. The geographical breakdown reported an outperformance in the American and Italian markets which increased by 11% in local currencies. The main market (Germany), contributing 17% to revenues, disappointed with almost flat sales (+1%). The stock in trade jumped by 25% yoy to SEK25.2bn, amounting to 13.6% of sales on a rolling twelve months. The expansion plan is maintained both through stores and online and the full-year 2016 is expected to add 425 new stores to the current 3,970. Only 46 net additions were reported in Q1. Capex amounted to SEK2.5bn vs. SEK2.2bn in Q1 15. H&M is currently present in 61 markets and the expansion would consolidate these current markets with a focus on China and the USA. The online services are provided in 23 markets and are expected to be extended to 34 by the end of the year.
FY2015, the best results ever
28 Jan 16
The top line impressed with 19.4% full year sales growth to SEK180,861m. In local currency, the growth was limited to 11%. A very strong expansion was reported during the year with a total net addition of 413 new stores and ten new online markets. As of November 2015, H&M had 23 online markets and the number of stores was 3,924 in 61 markets. The company invested mainly in China and USA with 83 and 59 respective new stores in 2015. The gross margin lost 180bps to 57% pulling down the operating margin to 14.9%, versus 16.9% a year earlier. The net profit improved by 4.6%, from SEK19,976m in 2014 to SEK20,898m in 2015. Given the significant expansion, more than 16,000 new jobs were created in the H&M group in 2015.
28 Mar 17
ClearStar* (CLSU): Building a background for growth (CORP) | Sound Energy (SOU): TE-8 results (HOLD) | LiDCO* (LID): 2017 should be a transformative year (CORP) | Proteome Sciences* (PRM): FY 2016 in line. Moving towards breakeven (CORP) | Fulcrum (FCRM): Significant market potential, rising margins and a strong balance sheet (BUY) | Mortgage Advice Bureau (MAB1): Strong and growing intellectual property (BUY) | 7digital* (7DIG): Open offer result (CORP)
Small Cap Breakfast
28 Mar 17
Path Investments—Publication of prospectus from the Energy Investment Company. Raising £1.4m. Admission due on or around 30 March | Franchise Brands—Schedule 1 detailing £28m reverse takeover of Metro Rod. Admission expected 11 April | Alpha FX Group— Schedule 1 from the foreign exchange provider focused on managing exchange rate risk for UK corporates that trade internationally. Fundraise TBC. Admission expected 7 April. | K3 | Capital Group—Schedule 1 from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Admission date and fundraise details TBC. | Integumen— Schedule 1 from the personal health company developing and commercialising technology and products for the human integumentary system. Raising £2.16m at 5p. Expected market cap £8.16m. Admission expected 5 April. Tufton | Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.
Strong set of full-year results, comforting guidance
23 Mar 17
GVC released a solid set of full-year results. Key highlights Pro forma Net Gaming Revenue (NGR) was up 12% at constant currency, or 9% on a reported basis at €895m, in line with the February trading update. Pro forma clean EBITDA was up 26%, at €205.7m, bang in line with AV’s €206m forecasts, translating a three percentage points increase in margin added to the growth in revenue. c.69% of NGR was derived from markets either regulated (including those in the process of regulating) and/or locally taxed (68% in 2015), while 95% of the revenues were derived from GVC’s proprietary platform. Net debt stood at €131.5m or 0.6x clean EBITDA. The board proposed a second special dividend of €0.15, giving a total dividend of €0.30 per share for the year, beating market expectations. Guidance The start of 2017 seems promising as management said that daily NGR had increased by 15% (+16% cc), translating into an 18% (+19% cc) growth in sports labels’ daily NGR and a 6% (+8% cc) increase in games labels’ daily NGR. The gross win margin reached 9.5% while it should move towards the 10% mark on the long term. Regarding dividends, the group confirmed a progressive distribution policy and expects to distribute at least 50% of the group’s free cash flow, starting from 2017. Debt refinancing In the first quarter of 2017, the group issued a €320m Senior Secured Term and Revolving Facility, composed of a €250m term loan (maturity 6 years) and a €70m revolving credit facility (maturity 5 years) used to pay down the Nomura Loan in full.
N+1 Singer - Morning Song 23-03-2017
23 Mar 17
eg solutions (EGS LN) Re-focusing on sales is delivering rewards | Futura Medical (FUM LN) FY results: continued clinical, regulatory and commercial progress | Halfords Group (HFD LN) Confidence in FX mitigation grows; stay at BUY | IFG Group (IFP LN) Top line growth but earnings pressures remain | Realm Therapeutics (RLM LN) FY results in line; on track for Phase II start in 2017 | Safestyle UK (SFE LN) Another good full year performance but valuation up with events | WYG (WYG LN) Mixed conclusion to FY17, reassuring FY18 outlook
Driven by distribution
24 Mar 17
Following results earlier this month, we publish our new forecasts following the segmental consolidation of divisions, and remain cautious relative to consensus (c.2% below at the PBT level in FY18E) mainly due to our UK assumptions. We believe the valuation is relatively attractive, and Inchcape is well placed for further growth given the strength of its balance sheet as it seeks to further utilise its unique global market position.