LVMH Moet Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €16.7 billion in the first half of 2015, an increase of 19%. Organic revenue growth was 6% compared to the same period in 2014. The Group recorded strong growth in Europe and the United States. Louis Vuitton had an excellent start to the year. Wines and Spirits continued to grow despite destocking of the distribution in China.
In the second quarter, revenue increased by 23% compared to the same period in 2014. Organic sales growth was 9% marking an increase from the first quarter.
Profit from recurring operations was €2 955 million for the first half of 2015, an increase of 15%, to which all the business groups contributed. Group share of net profit amounted to €1 580 million.
Bernard Arnault, Chairman and CEO of LVMH, commented:
“The excellent results of the first half are witness to the efficiency of our strategy, which relies upon the strength of our brands and a very entrepreneurial style of management. Building on the first half performances, we face the second half of the year with confidence and count on the quality of our products and the talent of our teams to further strengthen our leadership in the world of high quality products.”
Highlights of the first half of 2015 include:
- Solid growth in Europe and the United States
- Strong positive exchange rate effect
- Good performance from Wines and Spirits in all global regions with the exception of China, impacted by the continued destocking of distributors
- Double-digit organic revenue growth in the second quarter for Fashion & Leather Goods
- Major success of new products at Louis Vuitton, where profitability remains at an exceptional level
- Continued investment in the fashion brands
- Excellent performance at Parfums Christian Dior
- Strong growth in Bvlgari’s results and the continued repositioning of TAG Heuer on its core offering
- Remarkable momentum at Sephora which is strengthening its position in all operating regions and in the digital universe
- DFS continues to be impacted by the currency and geopolitical environment in Asia
- Cash from operations before changes in working capital of €3.4 billion
- Net debt to equity ratio of 25% as of the end of June 2015
Wines & Spirits: strong momentum in the United States, recovery in Europe and continued destocking by distributors in China
The Wines & Spirits business group recorded organic revenue growth of 2%. On a reported basis, revenue growth was 15% and profit from recurring operations increased by 5%. The champagne business had a good start to the year, driven by the progress of the prestige vintages, particularly in Europe and Japan.
Despite the continued destocking by distributors in China, the second quarter saw a return to organic revenue growth for Hennessy thanks to the sustained strong performance in the US market. Other spirits, Belvedere and Glenmorangie continue their development.
Fashion & Leather Goods: excellent creative momentum at Louis Vuitton and further strengthening of other brands
The Fashion & Leather Goods business group recorded organic revenue growth of 5% in the first half of 2015, with accelerated growth in the second quarter. On a reported basis, revenue growth was 18% and profit from recurring operations increased by 12%.
Louis Vuitton continued to illustrate its creative momentum across its collections. Leather goods experienced strong growth with the success of models in Monogram and new leather lines. Nicolas Ghesquière’s runway shows in symbolic locations received an enthusiastic welcome.
Loro Piana continued its development and benefited from new store openings. Fendi recorded an excellent performance, in particular in leather goods and accessories. Céline, Givenchy and Kenzo experienced strong growth. Marc Jacobs and Donna Karan continued the repositioning of their collections. Other brands are further strengthening their positions.
Perfumes & Cosmetics: continuous innovation and increasing market share
The Perfumes & Cosmetics business group recorded organic revenue growth of 6%. On a reported basis, revenue growth was 17% and profit from recurring operations increased by 22%. Demonstrating remarkable momentum in their competitive environment, LVMH brands gained market share.
Christian Dior’s iconic lines J’adore and Miss Dior continued to show their exceptional strength. The launch of a new men’s fragrance will mark the second half of the year. Guerlain furthered its progress with the confirmed success of La Petite Robe Noire and the rapid development of Abeille Royale. Benefit, Make Up For Ever and Fresh reinforced their excellent performances.
Watches & Jewelry: strong growth in jewelry and cautious purchasing behavior of multi-brand watch retailers
In the first half of 2015, the Watches & Jewelry business group recorded organic revenue growth of 10%. On a reported basis, revenue growth was 23% and profit from recurring operations increased by 91%. Bvlgari had an excellent first half driven by the success of its iconic jewelry lines and its new watch for women, Lvcea. Hublot showed strong progress while TAG Heuer continued to refocus on its core offering. A partnership was concluded between TAG Heuer, Google and Intel for the launch of a smartwatch.
Selective Retailing: remarkable performance at Sephora and DFS still impacted by the currency and geopolitical environment in Asia
The Selective Retailing business group recorded organic revenue growth of 5%. On a reported basis, revenue growth was 21% and profit from recurring operations increased by 7%. DFS relied on its unique expertise in “travel retail” to address the more difficult context that persists in Asia, linked to the currency and geopolitical environment.
Sephora achieved strong growth and continued to gain market share in its key countries, particularly France, the United States, Canada and China and continued the expansion of its distribution network. It also increased its lead in the development of a multichannel experience for its clients through its rapid increase in online sales and numerous digital initiatives.
Outlook 2015
Despite the context of economic and currency uncertainties, LVMH will continue to gain market share thanks to the numerous product launches planned before the end of the year and its geographic expansion in promising markets, while continuing to manage costs.
An interim dividend of 1.35 Euro will be paid on December 3, 2015.
LVMH
LVMH Moet Hennessy Louis Vuitton is represented in Wines and Spirits by a portfolio of brands that includes Moet & Chandon, Dom Pérignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Hennessy, Glenmorangie, Ardbeg, Wen Jun, Belvedere, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton et Numanthia.
Its Fashion and Leather Goods division includes Louis Vuitton, Céline, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci, Donna Karan, Marc Jacobs, Berluti, Nicholas Kirkwood and Loro Piana.
LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Parfums Kenzo, Perfumes Loewe as well as other promising cosmetic companies (BeneFit Cosmetics, Make Up For Ever, Acqua di Parma and Fresh).
LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, la Samaritaine and Royal Van Lent.
LVMH’s Watches and Jewelry division comprises Bulgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred, Hublot and De Beers Diamond Jewellers Ltd, a joint venture created with the world’ s leading diamond group.
