LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded 2007 profit from recurring operations of 3 555 million Euros, an increase of 12% compared to an already strong performance in 2006. The current operating margin again improved, reaching 22% in 2007. Revenue rose to 16.5 billion Euros, reflecting organic growth of 13% to which all business groups and all regions contributed.
This performance is even more noteworthy in view of the strong negative impact of exchange rates, which mainly affected the second half of the year. At constant exchange rates, profit from recurring operations increased by 20% in 2007.
Following growth of 30% in 2006, the Group share of net profit increased by 8% in 2007. This increase is due to the change in net financial income, which in 2006 included a high level of capital gains on divestments.
Bernard Arnault, Chairman and CEO of LVMH, commented:
“The excellent performance in 2007 illustrates the vitality of our major brands which continue to strengthen and gain market share. The year also confirmed the strong potential of our high growth rising star brands and the Group’s leading position in emerging markets. LVMH has showed record revenue in 2007 and has once again improved profitability. In an economic environment unsettled since the beginning of the year, we will rely on the strength of our growth model, the exceptional innovation of our brands and the talent of our teams to make 2008 another year of growth.”
Highlights of 2007 include:
* Double-digit organic revenue growth for the Group,
* Continued strong growth of major brands,
* Further market share gains in all business activities,
* Outstanding momentum in Wines & Spirits,
* Exceptional operating margin at Louis Vuitton which recorded another year of double-digit organic revenue growth,
* Strong growth in the results of Watches & Jewelry, whose operating margin reached 17% in 2007,
* Excellent performance from Perfumes & Cosmetics, led by Christian Dior,
* Strong growth in revenue and profitability at Sephora,
* Cash from operations before changes in working capital of 4 billion Euros, an increase of 15%.
Wines & Spirits: strong increase in volumes and reaching new clients
Wines & Spirits saw organic revenue growth of 13% in 2007. Profit from recurring operations increased by 10% to 1 058 million Euros.
The continued increase in champagne volumes during the period was accompanied by an improvement in product mix driven by the growing success of rosés. In 2007, Hennessy cognac demonstrated strong momentum with robust growth in volumes. Its premium qualities saw particularly rapid growth.
In 2007, this business group saw remarkable growth in its traditional markets, particularly in the US and in Europe. Promising new markets, such as China, Vietnam and Russia, achieved very strong growth. A highlight of the year was the acquisition of a 55% stake in Wen Jun Spirits, a Chinese producer of premium white spirits.
Continuation of a steady growth trend in 2008
Following an excellent 2007, LVMH is well positioned for 2008. The Group will continue its strategy of concentrating on internal growth and the development of its leading brands.
LVMH has set itself an objective of a tangible growth in its results for 2008.
The geographical spread of its activities, the strength and the complementarity of its brands and the exceptional talent of its teams will enable the Group to gain market share and to further strengthen its lead in the global luxury goods market.
Dividend increase of 14%
At the Annual General Meeting of Shareholders on May 15 2008, LVMH will propose a dividend of 1.60 Euros per share, an increase of 14%. An interim dividend of 0.35 Euros per share was paid out on December 3rd, 2007. The balance of 1.25 Euros will be paid on May 23, 2008.
[Source: LVMH]
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