Good day, thank you for standing by. Welcome to the full year report for 2021. At this time, all participants are in listen-only mode. Please be advised that today's conference is being recorded. If you require to ask a question during the Q&A session, please press star and one on your telephone keypad. I would now like to hand the conference over to our first speaker today, Nils Vinge. Please go ahead. Thank you and good morning, everyone. Thank you for joining us today, and welcome to this telephone conference about the H&M Group's full year and fourth quarter results 2021. With me today is our CEO, Helena Helmersson, and our CFO, Adam Karlsson. Helena will start by giving a short summary, and then Adam will talk about our financial position. Helena will then say some words on current developments and our focus going forward. After that, we will be happy to answer your questions. You'll find the presentation and full year report at hmgroup.com/investor-relations. I'll hand over to you, Helena. Thank you so much, Nils. Our strong recovery continues. Our customers are showing that they appreciate our collections, and by quickly taking decisive actions, we've succeeded in managing the negative effects of the pandemic. The extensive initiatives and investments that we've been making for many years have helped us to create collections with the best combination of fashion, price, quality, and sustainability. Despite the tough challenges, we've been able to end the year strongly with sales back at the same level as before the pandemic and with better profitability. I'm pleased that this means our employees can benefit from a further contribution of SEK 224 million to the H&M incentive program, which is for all employees of the H&M Group. We are a growth company that has been firmly rooted in our corporate culture ever since the days of our founder, Erling Persson. After nearly two years focusing on managing a difficult situation, we've recovered well. We're back to a more normalized situation with a strong financial position and good profitability. That means we can go back to focusing fully on growth again. We see significant opportunities to grow both sustainably and profitably. Our goal is by latest 2030 to double our sales while at the same time halving our carbon footprint. The EBIT margin is to exceed 10% over time. It's a very ambitious goal that we're determined to achieve. I'll be telling you a bit more about our growth plan once Adam has given a more detailed run through of the financial results. Over to you, Adam. Thank you, Helena. First, some comments on the sales development. Sales during the year has clearly shown the strength of our Omni model, where the channels have complemented and strengthened each other. This resulting in sales back at pre-COVID levels during Q4 with an increase of 11% in local currencies compared to last year. For the full year, sales increased 12% in local currencies. If we move on to profitability development, the year ended strong with an EBIT margin of 11% for the fourth quarter. This resulted in a strong margin recovery trend on a rolling 12-month basis, surpassing the full year levels from 2019. The strong recovery comes despite headwinds from the pandemic and is a result of well-appreciated collections, more full price sales, and an overall strong cost control throughout. Moving on to cash flow and the cash flow generation throughout the year. The cash flow from operating activities amounted to SEK 44.6 billion, up from SEK 25.9 billion in 2020. This has been one of our core focus areas throughout the year and is an outcome of the strong profitability development, very active investment and stock management, and of course, positively impacted by the initiative to align our payment terms to the industry standard. The sum of this resulted in a strong development of our capital structure, where net debt to EBITDA ratio strengthened, ending in the year with a net cash position close to SEK 18 billion. Based on that improvement in net debt to EBITDA, we have been able to decrease and restructure our debt, not only the debt levels, but also prolonging our debt maturity profile. A major part of this work was the initial sustainably linked bond issue in February, where we now have secured access to cost-efficient funding through the capital market. Finally, capital allocation. The H&M Group will continue to aim to secure financial flexibility and freedom of action at the best possible terms. Therefore, we advocate a conservative leverage ratio, aiming for a strong capital structure with a strong liquidity and financial flexibility. Looking at investment. To secure the sustainable growth, we will increase investments the coming year. For 2022, we plan for a CapEx of SEK 10 billion. This is aimed at further strengthening the customer experience in all channels, further strengthening and adding capacity to supply chain, continued investments in tech and AI, and also complemented by ambitious investment plans connected to green investments, both through our CO:LAB investment arm, but also directly throughout our value chain, for example, support the transition to more energy efficient operations, as well as catalyzing an increased supply of green energy. Finally, the board has proposed to the AGM a dividend consisting of an ordinary dividend of SEK 6.50 per share, complemented by a share buyback program of up to SEK 3 billion. We see this as a strong combination where the buyback program offers flexibility and gives our positive outlook the potential to create both value for shareholders as well as for us as a company long term. With that, I hand back over to you, Helena. Thank you, Adam. With such strong and healthy financial foundation, we are now in a position where we can focus on growth again. As I said earlier, we have a goal that by latest 2030, we will double our sales while at the same time halving our carbon footprint. The EBIT margin is to exceed 10% over time. Our growth plan can be divided into three main areas, the H&M brand, portfolio brands and business ventures, and investments and partnerships. As regards to the H&M brand, we're going to strengthen, develop, and broaden the offering, as well as adding services to help our customers make more sustainable choices. One example is that we're linking up Sellpy, our recommerce platform, and hm.com. In this way, we will capitalize on and increase the value of H&M's brand and strengthen our relationships with hundreds of millions existing customers all over the world, as well as attracting new customers. The stores and the customer experience will still play a very important role. The optimization of our store portfolio continues to be successful. As we reported previously, it's about developing the customer experience, the number of stores, and terms. Now, we're also stepping up the pace of investment in both our physical and digital stores to elevate and strengthen the integrated experience further. We are also growing consistently through our other brands, new business models and initiatives. Since COS was launched, we've added Monki, Weekday, & Other Stories, ARKET, Afound, Treadler, and Sellpy, and we have various new initiatives in progress. Each of these brings in new groups of customers and have great growth potential, both individually and also in how they complement and strengthen the group. All of them start from customers' demands and help make the fashion industry more sustainable. Through our investment arm, CO:LAB, we now have around 20 investments in new companies which play a growing importance for our growth strategy. In a short time, these investments have created significant value, both financially and within the existing operations, for example, by improving the customer experience and enabling innovation in sustainable materials. Examples of companies we've invested in include Renewcell, Ambercycle, and Infinited Fiber. In an industry in rapid transition, exciting opportunities arise, and we're constantly evaluating investments and acquisitions that could contribute to the H&M Group's continued sustainable growth. Our strong cash flow and financial position are going to be crucial to our ability to invest in our sustainable growth. Alongside investments linked to each growth area, we're investing further in infrastructure such as tech and our supply chain. We'll be investing around SEK 3 billion in 2022 in, among other things, more sustainable materials and the transition to renewable energy so that we gradually phase out carbon from our supply chain. Looking ahead, naturally, we have respect for the aftermath of the pandemic and the challenges that this will bring. At the same time, we feel confident that we are able to quickly adapt and seize opportunities that arise. We have a long track record of dealing with challenges in the global economy. Our global scale together with long and strong relations and the ability to act fast give us competitive advantages which benefit our customers. Without doubt, our customer focus, quick actions, and flexibility have been key in managing the pandemic and are going to be just as important going forward. Everything we do begins with the customer. Our customers can always be confident that when they come to us, they'll be able to find the best combination of fashion, price, quality, and sustainability. With continued strong collections, satisfied customers, and good relations with all our partners, we're optimistic about the H&M Group's opportunities for long-term and sustainable growth. Thank you for listening, and now we are happy to take all your questions. Thank you, dear participants. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. The first question comes from the line of Elena Mariani from Morgan Stanley. Please ask your question. Hi, good morning, everybody, and congratulations on your results. I have two questions on your guidance. First of all, the 10%-15% sales growth per annum, this is very interesting and looks quite ambitious. You know, how do you think about the phasing of this growth over the next, you know, nine years? Should we expect this 10%-15% per annum to be, you know, something achievable also over the next couple of years, or is it more like a long-term ambition, clearly post-2022 to grow at these levels? Then, still part of your guidance, you have clearly laid out the 10% EBIT margin target to be achieved by 2024. What is the embedded gross margin outlook? How should we expect the gross margin to move between now and 2024? Thank you. Thank you so much. As you know, we're a growth company. It's definitely in our DNA. We are on a growth journey after two turbulent years. We are in a healthy financial position, focusing on growth again. Long term, definitely, we see that we will come back to growth figures of 10%-15% annually again. The milestone that we have set for 2030 is to double sales, then at the same time halve the carbon emissions. This combination is of course also showing how we are planning to grow. That's one of the milestones, and our growth journey will continue. How that will play out up until 2030, we will see. Of course, we have our plans in place, but also we're humble about uncertainties around us. We have been working very hard with our growth plans and also integrated sustainability in those. We are absolutely confident that we will be able to do our very best to achieve the target of 2030 as one of the milestones. Then it's by latest 2030. Let's see what growth numbers that will mean yearly. Connected to the gross margin, as you know, it is dependent on a lot of factors. We assess the profitability target from a more long-term average gross margin development. There will be potential short-term fluctuations, but we see great potential to continue, for example, the reduced share of reductions contributing to gross margin. We use a long-term trend of the gross margin with the upside of working more effectively and efficiently with reductions looking ahead. Understood. Thank you very much. Thank you. The next question comes from the line of Daniel Schmidt from Danske Bank. Please ask your question. Yes, good morning, Helena and Nils. A couple of questions from me then. Following on when it comes to the gross margin item that you answered when it comes to the markdowns, I remember you said before in the middle of 2019, before the pandemic, you stated that given the investments that you've done in the logistics and optimization of warehousing and supply chain and so on, that you saw the opportunity not only to get back to square one when it comes to reversing markdowns but that you should get beyond square one. Is that still valid when you look into the future? We still believe that is absolutely possible. It's driven both by, of course, a continuous work with optimizing our buying, increasing flexibility, but also all of the support we get from digital development when it comes to optimizing pricing and markdowns based on the AI development. We still believe that plan is valid. Yeah. Okay. Do you see that as a sort of a linear development, or is that gonna be a couple of years out that we see more effects from what you just mentioned? Well, it depends a little bit what you compare with. Obviously, we had elevated short term levels of markdowns during last year, during the very turbulent level. Now we believe that we are in a stable improvement trajectory towards more normalized or lower markdowns levels over time. Yeah. Okay. Just coming back to the growth targets, which are quite ambitious, I think, and especially given what you delivered in the five years preceding the pandemic, I think you had 6% growth on average. Now implicitly you're saying that you should have at least eight, if you believe that you could double it in 2030. Of course, maybe more than that, 10%-15% is your long-term target. Given the investments that you're doing right now and you're doubling CapEx, and you mentioned a few areas, do you think that you will have to stay at that level or even higher to get that growth or sort of how should we think about that? We see Elena mentioned that the investment areas are more wider than before, so to say. It's not only improving our experience in the stores, but it's also enabling the digital growth to continue, but also looking at other types of investments such as companies that will support the transition to a more sustainable, for example, material supply. We believe that the levels are where they should be for 2022, and then we evaluate going forward how we distribute them between the different investment areas. Okay. Just maybe finally a shorter one. You mentioned, like everyone else that has a global operation, that you had some supply of goods issues in connection with the Q3 report, although you stated a couple of times that they were diminishing, but you were still seeing some challenges. How do you view that situation now going into 2022? Is that unchanged or where are we? Well, the industry or moreover several industries have these challenges right now. We do think that the worst is behind us. We also see that we have had the ability also to deal with this in a rather good way, simply because of our partnerships that we have and of course the economies of scale. We have some competitive advantages, but also we're kind of used to handling situations when seeing uncertainties or fluctuations in the economy. We have been managing this fairly well. It will still be a bit challenging moving forward, but we do think that the worst is behind us. Maybe just a follow-up on that. Even though you've been managing this quite well, given what you've been delivering in Q3 and Q4 especially, and what you're saying now, do you think that there's any learnings to be sort of had? Are you thinking differently when it comes to far away sourcing, given that you have still so much sourcing out of Asia, and you still have very much your sales in Europe? Is that in any way affecting your sort of strategic thinking when it comes to sourcing in the next couple of years? I would say that this is really something we work with continuously. Making sure that we have diverse supply chains is absolutely crucial. We have big advantages already looking at the spread of production and the fact that we're present in many different countries. This is definitely part of our strategies moving forward to be able to grow both H&M brand and the other brands that we have, that we will kind of develop the supply chain further for it to be even more flexible as we go. Thank you. That's all for me. Thank you. The next question comes from the line of Fredrik Ivarsson from ABG. Please ask your question. Thank you very much. Good morning, all. Can we start on the inventory levels? You say that you aim to keep decreasing the inventory levels, but are you still committed to get down towards the 12%-14% target you communicated a few years back? Yes. That holds, that target long term. Yes. Excellent. Then on expansion, sorry if I missed this, but did you have any guidance for us in terms of net closures in 2022? Also if you could give us the split between H&M and portfolio brands. For 2022, we estimate that it's going to be a net of -120 stores for the group. We plan to open around 120 and close around 240. Net- Yeah. 120. We don't have the split here for the various brands, sorry. That's okay. Thanks. Last quick one, how many members do you have within the H&M Club now? We have a bit more than SEK 150 million. SEK 150. Perfect. Thanks a lot. Thank you. The next question comes from the line of Charlie Muir-Sands from BNP Paribas Exane. Please ask your question. Yeah, good morning. Thank you for taking my questions, Helena, Adam. I wondered if I could start with your 2030 target to grow your revenue base by two times. Could you elaborate a little bit more on what proportion of that growth you expect to come from the core H&M brand, new business, and also perhaps by channel? Then I just want a couple of points of clarification. You alluded to investments. Is that a purely organic target or is there any kind of assumption around M&A in there? Finally, all on that target, how important is a rehabilitation of your brand in China to reaching those goals? Okay, thank you. Many questions in one, but I'll start. If looking at the 2030 goal and the three kind of main growth areas, H&M brand, portfolio brands and business ventures, and thirdly then investments and partnerships, the biggest part will come from H&M brand. Here our growth plans are based on several things, of course. Overall, I would say it's about strengthening, developing and broadening the customer offer even more. It's also about, of course, developing the customer experience. Then as we have spoken about many times before, it's about optimizing the store portfolio, keep on growing the online of course, and most importantly, develop how we integrate the channels then. That's where we see that we have such competitive advantages since we also have our physical store network and then we have been growing online really well lately. That integration is really important. Developing the customer offer, that means that we will be able to meet customers and if you look at customer demand today, there are definitely ways in how we can give more products and services. For example, how we can connect Sellpy with H&M. The other part is then portfolio brands and business ventures, where we are also exploring new business models all to be able to meet even more demands with our customers. The partnership part is also really important. We now have around 20 companies then as we mentioned, within CO:LAB, they have shown really strong growth, but also they are a strategic value, for the company. Out of these three, H&M brand, will provide the biggest, part, of that growth. You had a question around investment. Yes, I'll follow up on that then. Our investment guidance for next year is geared, of course, to start to realize the plan that Helena lays out here. As the majority of the growth will come from core and from the H&M brand, the majority of the investments will be to ensure that the store estate is up to date, that the channels are integrated and that we continue to invest in a strong backbone. Of course, with the strong focus on new investments in the CO:LAB arm, we also see that there's a strong deal flow of opportunities coming in. Here we will look at it as it comes and the current investment guidance is geared more towards the proportions of growth that Helena laid out. Lastly, you had a question around China. First of all, when looking at the 2030 goal, of course, there will be unpredictable things happening in different markets as we go since it's such a long-term goal. We do believe, and we're confident that this ambitious goal will hold until 2030, regardless of fluctuations in some of the markets. Other than that, China is still a complex situation, so I prefer not to comment more on that. Thanks very much. One very brief follow-up question, if I may. You mentioned SEK 3 billion of investment in renewables and the transition to lower carbon operations in the financial year ahead. Can I just clarify, is that operating costs, you know, and gross profit investment as it were? Or is that capitalized as well? It is a mix. Some of it is operational. A big part is transitioning, for example, the store estate and the energy efficiency in the stores with LED lighting and so forth. It's a combination, but as well as capitalizing on the supply of sustainable energy throughout the value chain. It's a combination of CapEx and OpEx. Okay, the CapEx part is within SEK 10 billion? Yes. Yes. Thank you. Thank you. The next question comes from the line of Adam Cochrane from Deutsche Bank. Please ask your question. Good morning. Thanks. Thanks, guys. Great set of results there. In terms of a couple of questions from me, when you look at those longer term targets, would you have any idea of what the store footprint might look like as we go forward? I know you've given the closures for next year, but theoretically, as you look forward, you know, how do you envisage the store state? On the second question, you've talked a lot about these collab investments. I just wanted to clarify exactly how they are going to impact your sales target. Because at the moment, when you take small stakes, I presume they just go in as investments. Is the benefit the raw materials, the knowledge, et cetera, that they supply the group that will improve the sales growth within H&M? Thanks. Right. First, about the store footprint. I mean, historically, we're kind of used to growing through growing number of stores. As we all know, the whole context has changed simply because customers have changed their behavior. As you know, there's many companies out there that don't have any stores at all, only work with digital that have great growth journeys. The advantages that we have, again, is, of course, that we have a physical footprint and a physical store network where we can engage with customers physically, and then we have the digital channels and how these can interact. It's the growth plan is definitely something that we work on continuously. I would say that we kind of follow the customer behavior. The most important part when we set the long-term goal is that we listen to customers and that we understand how to play with the physical versus digital and how to constantly integrate those and how to make sure that we never stop developing the customer experience. Moreover, of course, the physical stores has an advantage because they can take different roles and different forms, which is, of course, something that we work a lot on, depending on how customers kind of prefer to visit us and what services that they also want. We need to think less of growth as only being in one channel as it has maybe been historically. It's more about physical space and digital presence and how those interact. If I then follow up on the investments then. We see that they clearly create value in two ways, both, of course, that the investments are related to the core of, for example, H&M brand, where they can both enhance the customer experience but also support the transition to more sustainable materials. They will, of course, create value for the brands and the brands' customers. Also we see that they can create value as pure financial investments as well. It has been a successful period of investment throughout the last years here. But you're right, they're not consolidated in the growth target per se, as they are only minority investments. They're not part of the turnover target. We see that they, as they are so connected to the core, will contribute to growth of the brands. Okay. Just two quick. You mentioned sustainability there. Given the targets, maybe a question on that. When you're halving your carbon footprint over that, the next eight or nine years, how do you think about doubling your sales, halving your footprint? What is the volume of clothing implied within that ambition? Are you effectively holding price mix as it is and doubling the volumes and then effectively having a quarter of the carbon footprint per item over that period? Or is there some scope to increase prices, maybe premiumization mix, et cetera, so that it's not a doubling in volumes, which seems, given the sustainability target, would make it easier to hit? Thanks. Right. Now you're onto a very kind of important question in how to manage both. That is also why we consider this goal to be so strong, because it also shows that not only are we going to secure that customers all over the globe can make sustainable choices when they choose fashion and design, but also we will make sure that we grow within the planetary boundaries. The answer on how to do that is, of course, to move to circular. With circular, we mean that the fibers in the garments we should be able to use them over and over again, but also that one product can have several transactions. Meaning, for example, when we connect Sellpy with hm.com, we can also secure that we have more durability and that each product has kind of a longer life. Also that we have more transactions per product. When we state the target, we don't mean doubling the volumes, but doubling the revenues. It's about decoupling our growth with the carbon and climate footprint. That's great. Thank you very much. Thank you. Dear participants, just a gentle reminder to ask one question at a time. The next question comes from the line of Simon Irwin from Credit Suisse. Please ask your question. Good morning. Could you just talk about the current year? Obviously noting, particularly as far as gross margins go, I mean, poor Q obviously, good gross margins. You mentioned that FX was favorable and that input cost inflation was fairly modest. I would assume that those all reverse steadily through the course of the year. What is your kind of outlook for achieved gross margins in the current year? Correct. As everyone is aware of, there is a pretty severe cost inflation out there. Just as we've managed the disruptions in the supply chain, we believe that we have opportunities here to manage this in a good way, given what Helena said, our strong relationships with our suppliers and global scale and flexibility and so on. Having said that, of course, it's challenging. As we had a tailwind last year, now it's reversing and it's becoming a headwind. Very challenging for all of the industry, but in relative terms, I think we have an opportunity here. Will you be increasing prices to offset the higher input costs? You know, the most important is always that the customers can feel confident that at H&M they can find the best combination, you know, fashion, quality, price, and sustainability. Of course, we need to adjust, because as we said, the target also is about, you know, to grow with sustainably and in a profitable way. Okay. Could I just ask another question about 2030 long-term targets? Where geographically would you expect to take share? Do you think you can still take significant share in Europe, or is it more about penetrating emerging markets? If so, will that be through stores, through online or through marketplaces? We have opportunities to grow in different ways in different places. Of course, there's a lot happening when it comes to channels and especially digital channels, but also then we previously explained how we're also planning to develop the physical stores and the integration of the digital. When looking at stores, and when we said net minus 120 for this year, that will be mainly in the countries where we've been for a very long time, mainly Europe, I would say. Long term, this is really a target that will kind of evolve as we see the potentials going forward. We do see that we still have great potentials outside Europe to grow further. Great. Thank you very much. Thank you. The next question comes from the line of Jörg Nowicki from TextilWirtschaft. Please ask your question. Good morning. Thanks for taking my questions. I hope you take all three of them. Well, I start with the first one. Helena, I know you mentioned you will not comment on the situation in China anymore, but this one is only to verify something. I heard that still the collections are not available, like, on these big platforms like Tmall and JD, and I just wanted to check with you whether this is the case and correct or not, and when do you expect to get back there? Right. We are not right now available on Tmall. With regards to China overall, I would prefer to not give any more comments. Hope for your understanding. Sorry about that. Next one would be, in your biggest market, Germany, you will start doing wholesale with one of your brands, with Weekday. First one would be, will you roll this out to other brands, including H&M? Second, wholesale is a very complex business model where you have to deal with, like, a lot of picky retailers. What makes you think this is a good new growth channel? Can we come back on that question because we're not updated about the details? Sorry. Okay. All right. Next one will be about platform business. Going platform is one of the big things in retail today, as you know. When will H&M go platform and open up for other brands in its online shops? Well, looking at our different brands, we have different kind of business models in different parts of the H&M Group. If you look at Afound, for example, that is a platform. If you look at our partnership and with Sellpy, that is a platform as well. If you look at H&M brand, we do have also external collaborations and external brands on hm.com. This is exciting moving forward also, if customers show that this is something that they appreciate, this is a way to kind of broaden the offer. I would say customers decide. Nowadays, it's easier to also follow what customers want because we can follow more of that kind of data. We will evolve as per their demand. Okay. Thank you. Regarding your question about wholesale in Germany, as I said, we're not updated about the details, but our preferred path always, of course, is the D2C direct-to-consumer model, and that's the one we strongly believe in and will continue to explore. Thank you very much. Dear participants, just a reminder once again, if you wish to ask a question, just ask one question at a time. Thank you. The next question comes from Richard Chamberlain. Please ask your question. Yeah, thank you. Morning. Can I just follow up on the comments you made about inventory? How do you view the current composition of your inventory and the quality of the inventory at the end of the period or currently actually, and the sort of balance of garments that you've got at the moment? Thanks. Right now, very strong, relevant. It's also reflected in the markdown levels for the fourth quarter that the inventory is very relevant to our customers. Composition is good and levels are also coming down compared to last year. It's a positive look. Okay. Thank you. Can I just ask one on the, I think it's page 12 of the release where you talk about a proposed share buyback. But you also talk about a corresponding bonus issue, so that the level of share capital is restored. Will that happen at the same time as the buyback? Why are you doing that corresponding sort of bonus issue as well? Bonus issue. Isn't this? Let's see where you are here in the report. It's the top paragraph. Sorry, page 11, top paragraph, proposed share buyback program. Uh... You're gonna buy back shares then do a corresponding bonus issue to keep the level of share capital the same. Is that right? No, there's technicalities around that there has to be a corresponding. Let's see where it says here. There's no bonus. I can't see here. Let us get back to that. I'm not sure really where in the report you see that. The intention is to get the AGM's mandate to buy back shares. As we state, that should then reduce the share capital, if and when the buyback program is initiated. Okay. We should. Let's get back on the wording on that. CapEx down. Okay. Okay. Yes. Okay. Yes. That's the intention. I'm not sure about the wording and where you found that, but let's get back on that. Okay. Thank you. Thank you. The next question comes from the line of Anne Critchlow from Société Générale. Please ask your question. Good morning. Thanks for taking my question. It's just about the carbon footprint and your target to halve that. Does that include only own emissions, or is it the full Scope three emissions, including manufacturing emissions and customer use and so on? Thank you. Our biggest kind of carbon emission is, of course, in Scope three, when it comes to our supply chain. We work with a methodology of science-based targets, so both Scope one, two, and three are included. For us to be able then to reach this target, of course, there's a lot of things we need to do, and we need to have many different partnerships. I would state, first of all, that we need to help our suppliers to transition to renewable energy, and that we do through energy efficiency. We invest in renewables to help our suppliers to do that. Secondly, it's about transitioning to sustainable and recycled materials and also develop circular business models. Thirdly, it's about investing in tech in our supply chain that would help us to become even more demand-driven, and kind of secure that our customers get what they want at the right place in the right time. Shortly, it's Scope one, two, and three according to science-based targets. Okay. Thank you. Thank you. The next question comes from the line of Rosie Shepard from Retail Week. Please ask your question. Hi there. Just, thanks for taking my question. For the first question, I'd like to ask about the Circulator design tool. I just wanted to know a little bit more about what it does and how it will work and how it will be applied across the H&M Group. This is a tool that we newly launched. As you probably know, we work with Ellen MacArthur Foundation, so we have collaborated with some partners to make the tool. It's simply a tool that will allow and help our teams working with assortments to already from the design stage design out from the principles of circularity. Actually it includes both how you design garments and products with as kind of resource efficiently as possible, but also it's a lot about durability and kind of prolonging the life of a garment. It's kind of different areas included in that tool that would also help these assortment teams to make better decisions to make sure that customers can make more sustainable choices. Okay. It will be used across the whole group, all of the different brands included? Yes. That's the plan. It's not rolled out to all the teams yet because we just launched it last year. The plan is to roll that out broadly. Okay. My other question was about the logistics center in Canada. I just wondered if you could tell me a bit more about that and how it will help to drive the omni-channel integration. Just like the new fully automated DCs we've opened up in the U.S., this will help and also add capacity because right now, I mean, we have a strong online growth and digital growth, and this will help in that way. Okay. Perfect. Well, thank you. Thank you. Dear participants, just a reminder, we have 10 minutes left to take the questions, and we will do our best to give the opportunity to everyone. The next question comes from the line of Rebecca McClellan from Santander. Please ask your question. Yes, good morning. Just looking at the top line, could you give us an idea of what the full price sales to markdown sales split was within revenues and how that compares to sort of the 2017 levels, where there was significant markdown pressure and perhaps equally how it compares to what your ambitions might be? Yes. As we stated, obviously markdowns came in below what we guided for and below last year, and also we guided for Q1 that they will continue to be below last year's numbers. As Helena and Adam said, this is part of the strengthening of the offering and, of course, all the investments we've done in the supply chain and tech and AI and so on, and we expect that to continue. We give you the implications on the gross margin, but we don't give you the share of full price and markdowns of the total. Of course, the share of full price is higher and hopefully will continue. Okay. Thank you. Thank you. The next question comes from the line of Georgina Johanan from JP Morgan. Please ask your question. Hi. Good morning. Thanks for taking my questions. I have sort of two or three. I'll ask them one at a time, if that's all right, please. The first one was just in terms of your guidance for sort of doubling sales out to 2030 and also your 10% profitability guidance for 2024, how should we be thinking the operational gearing plays into that? You know if your sales in the near term are lower than the implied sort of CAGR out to 2030, would you still expect to be able to achieve a 10% margin or would that put that at risk? Again, these targets that we announced today are very ambitious, but we believe that we are able to meet them. Of course, there are things, as Helena said, outside our control that we cannot manage, so to speak. We definitely have shown in the past, we've been well above 10% in the last two quarters in 2022, as you saw, we delivered above 10%. It's definitely possible. Having said that, of course, we always need to adjust and it's always about, you know, being customer-centric. We need to, and right now, of course, we have, as we talked about before, the cost inflation and so on. Of course, we need to always balance. We're convinced that this is definitely doable over time in getting back to these levels. Thank you very much. Just thinking about your online versus store split, I appreciate there's a huge amount of integration involved in that. At a high level, by say 2030, what level of online penetration would you expect to see? Following on from that, while I appreciate you're not giving explicit space guidance for 2030 versus 2022, would you expect your store estate to be a higher number or a lower number, please? Yeah, we prefer not to kind of break down the 2030 ambition into channels simply because we think if we would set that strategy now, we would just have to change it as we go. We need to be able to follow how customers behave and how they want to shop. I think we have shown also in the past that we can be pretty flexible in how we grow the different channels according to what customers tells us, and that we're really strong in doing that integration as well. We simply don't have the answers exactly on each channel for 2030. We see great potentials in how we're planning to broaden offers, to develop experiences, and meet even more customer demand. Just to clarify again, it's not about online versus offline. It's about fashion retail. It's obvious that the omni is what customers want and that both channels, they complement and strengthen each other. It's very, very clear. That's helpful. Thank you. Just a final very quick question, please. I just wanted to clarify, in terms of your current trading number that you've provided, and I appreciate there's been a huge amount going on in terms of restrictions and new variant and so on. Can I just clarify that my math is right, that in December and January, sales were about 8% below pre-crisis levels, please? We see 2019 as the sort of pre-crisis year. If and when we discuss pre-crisis throughout the full year, we will use the financial 2019 as the reference year. Here it's actually going back even one more year in comparison to the pre-COVID levels. We see a lesser decrease if you then compare it to what we communicate during Q4. I think you need to move back one more year to get the reference to pre-COVID levels to make it consistent over the year. Okay, great. Thank you. Maybe I'll follow up with that, but after the call. Thank you very much. Thank you. The next question. Just take the opportunity also to maybe clarify on the bond issue question previously. It was a bit unclear to me on the translation bit of fondemission in Swedish that it was translated to bonus issue. But it is a technicality. It's common practice with share buyback programs, and it's about restoring down the share capital to what it was before the share buyback. Fondemission in Swedish, a normal technical procedure connected to share buyback programs and then translated to bonus issue in English. Thank you. The next question comes from the line of James Grzinic from Jefferies. Please ask your question. Good morning. Thank you. Just two quick ones, I guess. The first one is, Nils, can I just perhaps press you on those cost headwinds that you talked about, we all know about? If we look at the spring, summer season now, to maintain your target gross margin stable, how much of a price rise would you need to theoretically put in to achieve that neutrality given those pressures on inputs? Well, James, I know your model requires those kinds of numbers, but I'm sorry, I can't give you those clear numbers. Sorry about that. Definitely it's a headwind. All right. The second quick one, more philosophically, why did the management and the board feel that share buybacks are now the appropriate means of distributing excess cash? I'm just, you know, puzzled by that in terms of timing, and I presume the scale of it is not meaningful. Why did you feel that way? As mentioned previously, it creates flexibility and we see long-term value both for shareholders and the company given the positive outlook we have. Therefore, the method was selected to distribute the excess liquidity in this form. You're making a call on the share price relative to the prospects of the business as you see it long-term, basically? We're not, I mean, evaluating that. As we've been describing, we have ambitious long-term goals then, and therefore, we believe that share buyback at this amount is a good complement to the ordinary dividend. Great. Thank you. Thank you. The next question comes from the line of Niklas Ekman from Carnegie. Please ask a question. Thank you. Can I just come back on the issue of cost inflation? I've been a bit surprised here to see a positive net effect in Q4 and neutral in Q1, given the quite massive headwinds we're seeing right now with freight, cotton and then U.S. dollar strengthening as well. When do you think you'll see this impact? Is it something that will impact negatively from Q2? And do you think that the price and other efforts to mitigate are they going to be sufficient or do you see a risk of margin pressure later in 2022? Well, you know you won't get a clear answer, Niklas. Again, of course, with the lag in the timing, it will be more negative going forward. For Q1, as we said, our best assessment is neutral. Again, this is thanks to our long-term thinking and strong relationships with our partners and so on. We're no magicians, of course. It's gonna be increases going forward. As Adam and Helena said, we need to work even harder to not place all the burden on our customers. I can't give you any more detail. Sorry. Can you just say whether this will impact from Q2 the way you see things now? As I said, we were helped by the U.S. dollar that offset a lot of the effects until actually until Q1, but now the dollar is reversing again, so we are not helped by that. Yes, it will be gradually more negative going forward after Q1 as far as I wanna. Okay. Fair enough. Thanks for taking my question. Thank you. The next question comes from the line of Des Brennan from Ruffer. Please ask your question. Morning. Thanks for taking my question. Can I just check you can hear me? Yes. Thanks for the dividend, by the way. Our clients will definitely appreciate that. I have two questions for Adam related to the balance sheet and the implication for cost going forward. The first one is if I look at the balance sheet value of the fixed and intangible assets, I can see that they've fallen by around 15% over the last year. When I'm thinking about my 22 D&A charge in the P&L, what are the reasons why I shouldn't use -15% as my guide point for that number? Well, I mean, balance sheet has been affected by a couple of things, both throughout 2020 and 2021, we've been on fairly low investment. I mean, balance sheet acquisition levels, so this has, of course, affected. Also we have some currency translation effects affecting the balance sheet as well. Now we are starting to ramp up investment levels. I think, yeah. It will not be as big an effect on the balance sheet as we've seen over the last two years. That's my view on it. Okay. Thank you. Similarly, if I look at the balance sheet value of the current lease liabilities, the one-year lease liabilities, they've fallen by 12% over the last 12 months. What are the reasons why using -12% as a guide for my lease costs for fiscal 2022 should not be a good guide point? I mean the fundamentals are the number of leases and the length of the leases that are then put on a balance sheet. As leases come to an end, the values here decrease. Of course, we are prolonging some leases, but generally we're also on average shortening our lease terms. Most likely we'll see a slight decrease here as well for the year. Difficult to assess at this point in any more detail. Could you assess how much revenue would have to rise for lease costs to not be down year-on-year? Is that something that you could give us a feel for? I'm not looking for an absolute number. Maybe we can follow up with you offline and Nils then just to go through the details if that's okay with you. Sure. Thank you. Okay. Thank you very much. Thank you. Next question comes from the line of Demetris Demetriou from Schroders. Please ask your question. Most of my questions have been answered. Just one clarifying question. You mentioned earlier on the topic of doubling sales, and you make some distinction between volume and price. Can you just clarify how that doubling in sales will be achieved? Thank you. Right. When we say doubling sales until 2030, we don't mean doubling volume, but doubling revenue. Integrated in the three different areas, you also see how we have integrated plans how to move towards more circularity. To give concrete examples, customers get more and more kind of new demands. For example, we see that resale is on the rise, meaning that more and more customers in certain parts of the world want to also buy second-hand to make a more personal touch-up of their outfits. That of course means that when you have one product, you can also see that there are possibilities to get more revenues because you can get more than one transaction on each product. That's kind of one concrete example. The kind of way forward to be able to both double sales and half carbon emissions is to move towards circularity. That is also why we're so engaged and that we also invest a lot in sustainable and circular materials, for example, through our investment arm, CO:LAB, and then gradually integrate those materials in our own supply chain so that fibers can be used over and over again. Many thanks. Thank you. Thank you. The next question comes from the line of Andreas Lundberg from SEB. Please ask your question. Yeah, thank you. Talking about the free cash flow has obviously been very strong in 2021. What do you see on free cash flow going forward and especially on the working capital movements? I know we touched upon the inventory levels, but what about payables, for instance? We still see potential as we said before that the long-term target on an inventory level decreases is still valid. We see opportunities there. We also see some sort of spillover effects of the adjustments of the payment terms. We see that there is not of course as dramatic potential connected that we introduced the supply chain financing program during this year, but still some follow-up potential when it comes to working capital. Okay, great. Lastly, how many employees have permanently left the company since 2019? Since 2019. We have to come back to that. We don't have that off the top of our head. Sorry. We have of course reduced the number of employees in the group. You have the numbers in the report for the full year 2021. We can get back on that. Absolutely. Yeah. Okay. Thank you. That's all for me. Thank you. Thank you. Dear participants, thank you very much for all your questions and for your time today on this conference. That does conclude our conference for today. Thank you for participating. You may all disconnect. Have a nice day. Thank you all very much.