Excellent Performance of LVMH in 2015 – Record Revenue and Operating Profit

PARIS–(BUSINESS WIRE)–LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products
group, recorded revenue of €35.7 billion in 2015, an increase of 16%
over the previous year. Organic revenue growth was 6%. The Group turned
in strong momentum in Europe, the United States and Japan while other
Asian countries demonstrate contrasting tendencies.

In the fourth quarter, revenue increased by 12% compared to the same
period of 2014. Organic growth was 5%.

Profit from recurring operations reached €6 605 million in 2015, an
increase of 16%, to which all business groups contributed. Group share
of net profit was €3 573 million. Excluding the capital gain realized in
2014 following the distribution of Hermès shares, Group share of net
profit increased by 20%.

Bernard Arnault, Chairman and CEO of LVMH, said: “The 2015 results
confirm the capacity for LVMH to progress and gain market share despite
economic and geopolitical uncertainty. Revenue and operating profit
reached new record levels. Commitment to excellence, a passion for
quality and our capacity to innovate underpin our growth momentum and
are all values epitomised by the Fondation Louis Vuitton and its
emblematic building that welcomed over one million visitors in 2015. All
our Maisons demonstrated outstanding flexibility in 2015. By adapting
their strategies to global changes and by continuing to evolve, they
have shown the creativity and entrepreneurship that drive them forward.
In an uncertain economic environment, we can rely on the desirability of
our brands and the agility of our teams to further strengthen in 2016
our leadership in the world of high quality products.”

Key highlights from 2015 include:

  • Record revenue and profit from recurring operations
  • Strong progress in Europe, the United States and Japan
  • Positive impact of exchange rates
  • Good performance of Wines & Spirits in all regions with a progressive
    normalization of the situation in China
  • The success of both iconic and new products at Louis Vuitton, where
    profitability remains at an exceptional level
  • Progress at Fashion brands, in particular Fendi, Céline, Givenchy and
    Kenzo
  • Remarkable momentum at Christian Dior which gained market share
    globally
  • Excellent results at Bvlgari and success of TAG Heuer’s refocusing
    strategy
  • Exceptional progress at Sephora which strengthened its position in all
    its markets and in digital
  • Free cash flow of €3.7 billion, an increase of 30%
  • A gearing of 16% as of the end of December 2015
 

Key figures:

Euro millions

   

2014

   

2015

   

% change

Revenue     30 638     35 664     + 16 %
Profit from recurring operations     5 715     6 605     + 16 %
Group share of net profit    

*2 971

5 648

    3 573     *+20 %
-37 %
Free cash flow**     2 832     3 679     + 30 %
Net financial debt     4 805     4 235     – 12 %
Total equity     23 003     25 799     + 12 %
           

* Excluding the 2014 exceptional gain from the distribution of
Hermès shares

** Before available for sale financial assets and investments,
transactions relating to equity and financing activities

 

Revenue by business group:

Euro millions

   

2014

   

2015

   

% change

2015/2014

 

   

 

   

 

    Reported    

Organic*

Wines & Spirits     3 973     4 603     + 16 %     + 6 %
Fashion & Leather Goods     10 828     12 369     + 14 %     + 4 %
Perfumes & Cosmetics     3 916     4 517     + 15 %     + 7 %
Watches & Jewelry     2 782     3 308     + 19 %     + 8 %
Selective Retailing     9 534     11 233     + 18 %     + 5 %
Other activities and eliminations     (395)     (366)        
Total LVMH     30 638     35 664     + 16 %     + 6 %
   

* With comparable structure and exchange rates. The exchange rate
impact is +10%.

 

Profit from recurring operations by business group:

Euro millions     2014     2015     % change
Wines & Spirits     1 147     1 363     + 19 %
Fashion & Leather Goods     3 189     3 505     + 10 %
Perfumes & Cosmetics     415     525     + 26 %
Watches & Jewelry     283     432     + 53 %
Selective Retailing     882     934     + 6 %
Other activities and eliminations     (201)     (154)    
Total LVMH     5 715     6 605     + 16 %
           

Wines & Spirits: excellent growth in the United States and Japan,
continued destocking in China

The Wines & Spirits business group recorded an increase in
organic revenue of 6%. On a reported basis, revenue growth was 16%.
Profit from recurring operations increased by 19%. Champagne experienced
good growth in 2015 with an excellent performance in Europe, the United
States and Japan. Hennessy demonstrated strong momentum in the United
States across all ranges. In China, the second half of the year was
marked by a rebound in revenue during a year characterised by continued
destocking by distributors. Other spirits, Glenmorangie and Belvedere,
continued a sustained growth.

Fashion & Leather Goods: strong creative momentum at Louis Vuitton,
other brands strengthened their positions

The Fashion & Leather Goods business group recorded organic
revenue growth of 4% in 2015. On a reported basis, revenue growth was
14%. Profit from recurring operations increased by 10%. Louis Vuitton
had a remarkable year driven by the enthusiastic welcome of both its
iconic products as well as the new models created by Nicolas Ghesquière.
The Cruise Collection shown in Palm Springs and the exhibition at the
Grand Palais in Paris retracing the history of the Maison were among the
highlights for the year. Fendi recorded exceptional growth with the
success of its iconic leather goods and the inauguration of Palazzo
Fendi in the center of Rome. Loro Piana continued to invest in its
production capacity and launched an exceptional new material combining
vicuña wool and baby cashmere. Céline’s growth was driven by all its
product categories. Givenchy and Kenzo each had a good year. Donna Karan
and Marc Jacobs continued to work on changes to their product lines.

Perfumes & Cosmetics: market share gains and successful innovations

The Perfumes & Cosmetics business group recorded organic
revenue growth of 7%. On a reported basis, revenue growth was 15%.
Profit from recurring operations increased by 26%. Christian Dior
accelerated its growth and increased worldwide market share. The new
men’s fragrance Sauvage experienced unprecedented worldwide
success. The vitality of its iconic perfumes J’adore and Miss
Dior
together with the excellent reception of new make-up products
contributed to the Maison’s remarkable performance. Guerlain
demonstrated profitable growth notably driven by the progress of L’Homme
Idéal
and the continued success of the skincare ranges Orchidée
Impériale
and Abeille Royale. Benefit experienced strong
growth driven by the originality of its products. Fresh and Make Up For
Ever performed very well.

Watches & Jewelry: good growth in jewelry and cautious purchasing
behaviour of multi-brand watch retailers

The Watches & Jewelry business group recorded organic revenue
growth of 8%. On a reported basis, revenue growth was 19%. Profit from
recurring operations increased by 53%. Bvlgari had an excellent year
driven by its iconic creations and its new Diva and Lvcea collections.
Bvlgari’s stores delivered excellent performances. The watch brands were
impacted by the cautious purchasing behaviour of multi-brand retailers.
TAG Heuer launched with enormous success its smartwatch developed in
partnership with Google and Intel while continuing to develop its core
offering. Given its strong growth, Hublot strengthened its production
capacity with the opening of a second manufacturing facility in Nyon,
Switzerland.

Selective Retailing: excellent performance at Sephora, DFS’s
development impacted by economic changes in Asia

The Selective Retailing business group recorded organic revenue
growth of 5%. On a reported basis, revenue growth was 18%. Profit from
recurring operations increased by 6%. Sephora had an exceptional year in
terms of revenue and results and continued to gain market share in all
its markets. The omni-channel strategy accelerated with numerous
initiatives in several countries. DFS continues to experience an
uncertain environment in Asia as a result of currency and geopolitical
changes, while its business in Japan benefited from a boom in Chinese
tourism. Significant cost containment efforts were continued at DFS.

Confidence for 2016

Despite a climate of economic, currency and geopolitical uncertainties,
LVMH is well-equipped to continue its growth momentum across all
business groups in 2016. The Group will maintain a strategy focused on
developing its brands by continuing to build on strong innovation and a
constant quest for quality in their products and their distribution.

Driven by the agility of its teams, their entrepreneurial spirit, the
balance of its different businesses and geographic diversity, LVMH
enters 2016 with confidence and has, once again, set an objective of
increasing its global leadership position in luxury goods.

Dividend increase of 11%

At the Annual Shareholders’ Meeting on April 14, 2016, LVMH will propose
a dividend of €3.55 per share, an increase of 11%. An interim dividend
of €1.35 per share was paid on December 3 of last year. The balance of
€2.20 per share will be paid on April 21, 2016.

The LVMH Board met on 2 February 2016 to approve the financial
statements for 2015.

Audit procedures have been carried out
and the audit report is being issued.

Regulated information
related to this press release, the presentation of annual results and
the report “Financial Documents” are available at
www.lvmh.fr.

APPENDIX

LVMH – Revenue by business group and by quarter

 

2015 Revenue (Euro millions)

FY 2015     Wines & Spirits     Fashion & Leather Goods     Perfumes & Cosmetics     Watches & Jewelry     Selective Retailing     Other activities & eliminations     Total
First Quarter     992     2 975     1 094     723     2 656     (117)     8 323
Second Quarter     938     2 958     1 065     829     2 635     (41)     8 384
Total First Half     1 930     5 933     2 159     1 552     5 291     (158)     16 707
Third Quarter     1 199     2 939     1 102     852     2 614     (125)     8 581
Nine months     3 129     8 872     3 261     2 404     7 905     (283)     25 288
Fourth Quarter     1 474     3 497     1 256     904     3 328     (83)     10 376
Total 2015     4 603     12 369     4 517     3 308     11 233     (366)     35 664
 

2015 Revenue (Organic growth versus same period of 2014)

FY 2015     Wines & Spirits     Fashion & Leather Goods     Perfumes & Cosmetics     Watches & Jewelry     Selective Retailing     Other activities & eliminations     Total
First Quarter     -1%     +1%     +6%     +7%     +5%         +3%
Second Quarter     +5%     +10%     +6%     +13%     +5%         +9%
Total First Half     +2%     +5%     +6%     +10%     +5%         +6%
Third Quarter     +16%     +3%     +7%     +11%     +5%         +7%
Nine months     +7%     +5%     +7%     +10%     +5%         +6%
Fourth Quarter     +4%     +3%     +7%     +3%     +5%         +5%
Total 2015     +6%     +4%     +7%     +8%     +5%         +6%
 

2014 Revenue (Euro millions)

FY 2014     Wines & Spirits     Fashion & Leather Goods     Perfumes & Cosmetics     Watches & Jewelry     Selective Retailing     Other activities & eliminations     Total
First Quarter     888     2 639     941     607     2 222     (91)     7 206
Second Quarter     789     2 391     898     659     2 160     (94)     6 803
Total First Half     1 677     5 030     1 839     1 266     4 382     (185)     14 009
Third Quarter     948     2 647     961     706     2 234     (108)     7 388
Nine months     2 625     7 677     2 800     1 972     6 616     (293)     21 397
Fourth Quarter     1 348     3 151     1 116     810     2 918     (102)     9 241
Total 2014     3 973     10 828     3 916     2 782     9 534     (395)     30 638
 

LVMH

LVMH Moët Hennessy Louis Vuitton is represented in Wines and Spirits
by a portfolio of brands that includes Moët & 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.

“Certain information included in this release is forward looking and
is subject to important risks and uncertainties and factors beyond our
control or ability to predict, that could cause actual results to differ
materially from those anticipated, projected or implied. It only
reflects our views as of the date of this presentation. No undue
reliance should therefore be based on any such information, it being
also agreed that we undertake no commitment to amend or update it after
the date hereof.”

Contacts

Analysts and investors:
LVMH
Chris Hollis, + 33
1.4413.2122
or
Media:
France :
DGM Conseil
Michel
Calzaroni/Olivier Labesse/
Sonia Fellmann/Hugues Schmitt
+ 33
1.4070.1189
or
UK:
Montfort Communications
Hugh
Morrison / Hannah Glynn
+ 44.203.770 7903
or
Italy:
SEC
and Partners

Michele Calcaterra/ Matteo Steinbach
+39 02.
62.49991
or
US:
Kekst
James Fingeroth/Molly
Morse/
Anntal Silver +1 212.521.4800