Fashion and quality at the best price

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1 Fashion and quality at the best price H&M is a leading global fashion company with strong values and a clear business concept. H&M has a passion for fashion, a belief in people and a desire to always exceed customers expectations and to do so in a sustainable way. More than 132,000 employees 3,511 stores 55 countries Sales including VAT SEK billion Profit after tax SEK 20 billion Highlights from 2014 A clear business concept fashion and quality at the best price and strong shared values have taken H&M from a single store to being a leading global fashion company. right market, having efficient logistics and being costconscious in every part of the business. H&M s size means that customers also benefit from economies of scale. H&M makes sustainable, good-quality fashion accessible to people all over the world. With passion for design, a focus on quality and targeted sustainability work, H&M constantly strives to have the best customer offering in each individual market which includes giving customers the best price. Best price is achieved by H&M having its own designers, removing middlemen, buying the right item from the With an attractive customer offering, H&M continues to grow at a rapid pace, reaching more and more customers across the globe, both in stores and online. H&M s shared values are based on a fundamental respect for the individual and a belief in people s ability to use their own initiative. These values are summed up in the H&M spirit, which makes H&M a unique workplace for employees around the world. 1

2 Our brands H&M always offers a wide and varied range of inspiring fashion, from the latest trends to sustainable classics to wear season after season. All this is complemented by various independent brands with their own identities. Designers, pattern makers and buyers all work together at H&M to create fashion that attract customers around the world. The collections are designed in-house with the focus on quality, best price and capturing the feel of a trend. Flexible planning of the product range and efficient logistics mean that products can be continually adapted and updated according to customers preferences. The H&M group works actively to ensure that everything customers are offered is manufactured under good working conditions and with minimum possible impact on the environment. H&M carries a wide and varied range of clothing for women, men, teenagers, children and babies. To complement the apparel collections, H&M offers shoes, accessories and cosmetics, as well as an extended sports concept. The product range also includes home textiles and decorations from H&M Home. hm.com & Other Stories offers women a wide range of shoes, bags, accessories, cosmetics and ready-to-wear. The diverse collections are designed in ateliers in Paris and Stockholm, with great emphasis on details and quality always at a good price. stories.com Cheap Monday is a jeans and fashion brand offering complete collections for women and men. Cheap Monday often draws inspiration from alternative music and trends, such as the 1990s club scene and grunge. cheapmonday.com COS offers timeless fashion that outlasts the seasons, with both classic and modern items for women and men who are looking for exclusive design and good quality at affordable prices. cosstores.com Monki is a personal, playful brand that is also a unique shopping experience with a store concept characterised by storytelling, creativity and colourful graphic design. Monki clothes and accessories are inspired by current trends with a twist of Nordic and Asian street style. monki.com Weekday is a jeans-focused fashion destination offering urban design for women and men, always at great prices. With roots in a Scandinavian aesthetic, the collections are aimed at style-conscious young adults. weekday.com 2

3 Sustainability work for long-term growth H&M aims to continue to grow and add value for customers and employees, and to make a positive contribution to the communities where H&M is active. Sustainability is therefore an integrated part of the business. As a company with strong values and a long-term view, H&M wants to make a positive contribution to the world. H&M sees it as its responsibility to work for social improvements and reduced environmental impact throughout the life cycle of the products. Customers should always know that when they shop with H&M, the products have been produced with the greatest possible consideration for people and the environment. H&M s sustainability work is an investment in the customer offerings as well as in the communities where H&M is active and exerts a positive influence on the company s long-term development. Sustainability is therefore included in every aspect of the business. H&M is the world s largest user of organic cotton. The goal is that by 2020, all the cotton H&M uses will be more sustainable cotton. This includes organic cotton, cotton grown under the Better Cotton Initiative and recycled cotton. The share of more sustainable cotton in the product range was 21.2 percent in H&M s global Garment Collecting initiative allows customers to drop off used clothing of any brand and in any condition in H&M stores for re-use and recycling. In 2014, H&M collected 7,684 tonnes of used clothing. In the long term H&M aims to close the loop for textile fibres. H&M does not have any factories of its own but instead outsources manufacturing to around 850 independent suppliers. H&M sets high social and environmental requirements for its suppliers. Wages are an important issue for the textile industry in the sourcing markets and in 2013 H&M launched a new roadmap to help the parties in the labour market develop functioning structures for a fair living wage. H&M s sustainability work is complemented by the independent, non-profit global H&M Conscious Foundation. Reaching out beyond H&M s value chain, the H&M Conscious Foundation works towards longterm positive change for people and society, focusing on countries where H&M is active. Read more at hm.com/conscious 3

4 Every employee makes a difference Each H&M employee contributes energy and commitment, creating an open and dynamic workplace where everyone works together to take H&M further. H&M is guided by shared values that help generate energy and commitment, resulting in an open and dynamic workplace where everyone works together to achieve shared goals and where every employee makes a difference. This, together with H&M s strong global presence and long-term expansion means, great opportunities for employees to develop. In 2014, alone, H&M welcomed more than 16,000 new colleagues and today more than 132,000 people work at H&M. Through training programmes, feedback and dialogue, employees in all areas, in all roles and at all levels can develop and grow with H&M. Based on fundamental respect for the individual and a belief in people s ability to use their own initiative, H&M s shared values serve as guidance for every aspect of work within the group. Teamwork, entrepreneurial spirit, being straightforward and open-minded, as well as striving for constant improvement, keeping it simple and being cost-conscious, are also part of these values. Together they form the H&M spirit, which has existed ever since the very first store opened in 1947 and makes H&M unique. The commitment of employees and the H&M spirit are the key to H&M s success. To show appreciation for and acknowledge employees daily and long-term commitment, H&M established HIP, the H&M Incentive Program. HIP began with a donation in 2011 by the Stefan Persson family of approximately SEK 1 billion, invested in H&M shares, and is given a contribution from the H&M group based on 10 percent of the increase in profit between two consecutive years, before allocation to HIP. For 2014, SEK 303 million was allocated to HIP, which works the same way for everyone in the H&M group, regardless of salary, role, country and whether full- or part-time. Read more at hm.com/jobs 4

5 Expansion worldwide H&M continues to grow successfully, in existing markets, as well as in new countries. H&M s long-term expansion encompasses all its brands, and is taking place both via new stores and online. With 3,511 stores in 55 countries and six fashion brands, H&M has a strong global position. In 2014, H&M opened 379 new stores net and Australia and the Philippines became new H&M countries. In parallel with significant growth in stores, H&M is also expanding online shopping at hm.com into new countries. Four new online markets were added in 2014: France, Italy, Spain and China. Expansion includes all group brands H&M, COS, & Other Stories, Monki, Weekday and Cheap Monday, as well as H&M Home. COS, which was launched in 2007, is today an internationally established fashion brand with 114 stores in 25 countries and shop online in 19 countries. The newest fashion brand of the group, & Other Stores, was launched in 2013 and already has stores in ten countries and shop online in 13 countries. STRONG EXPANSION IN 2015 There is great potential for continued expansion for many years to come. The target is to increase the number of stores by percent each year. For 2015 a net total of around 400 new stores are planned. Taiwan, Peru, Macau, South Africa and India will become new H&M markets in Available in 13 countries, the hm.com online store will open in a further nine countries in 2015: Belgium, Bulgaria, the Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia and Switzerland. 5

6 H&M in figures STORE COUNT PER BRAND 2014 New stores net during the year GROUP TOTAL Number of stores 30 Nov , * 3,511 ** * Cheap Monday is offered mainly via 2,000 retailers in more than 35 countries. ** 130 of the group s stores were franchise stores. EXPANSION 1974 * 2014 NUMBER OF STORES NUMBER OF MARKETS ,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, * Since IPO YEAR H & M Hennes & Mauritz AB is listed on NASDAQ Stockholm. You will find all the latest information about the H&M group hm.com/about. 6