LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €37.6 billion in 2016, an increase of 5% over the previous year. Organic revenue growth was 6%.
In the fourth quarter, revenue increased by 9% compared to the same period of 2015. Organic growth was 8%. The American market remains on a good track as does Europe. Asia, excluding Japan, continued its good momentum.
Profit from recurring operations reached €7 billion in 2016, an increase of 6%, to which all business groups, apart from selective distribution, contributed. This result compares to 2015 which was itself a year of growth. Operating margin reached 18.7%. Group share of net profit was €3 981 million, representing growth of 11%.
Bernard Arnault, Chairman and CEO of LVMH, said: “LVMH achieved an excellent performance in 2016 within a context of geopolitical and economic instability. Continued innovation, entrepreneurial spirit and the quest for excellence: all Maisons continue to assert these core values while maintaining rigorous execution of their strategies on the ground. In an environment which remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again in 2017, our leadership in the universe of high quality products.”
Key highlights from 2016 include:
Record revenue and profit from recurring operations
Growth in the United States, Europe and Asia
Good performance of Wines & Spirits in all regions
The success of both iconic and new products at Louis Vuitton, where profitability remains at an exceptional level
Progress at Fendi
The sale of Donna Karan and the acquisition of Rimowa, a leader in luggage of excellence
Good momentum at Parfums Christian Dior driven by successful product innovations
Market share gains at Bvlgari and TAG Heuer
Growth at Sephora which strengthened its position in all its markets and in digital
Free cash flow of €3 974 million, an increase of 8%
Gearing of 12% at end of December 2016
WINES & SPIRITS: GOOD YEAR WITH PROGRESS IN THE UNITED STATES AND REBOUND IN SHIPMENTS TO CHINA
The Wines & Spirits Business Group recorded an increase in organic revenue of 7 %. On a reported basis, revenue growth was 5 %. Profit from recurring operations increased by 10 %. With volumes up 3%, solid growth continues for champagne and prestige cuvees performed particularly well. Hennessy cognac enjoyed an excellent year with 10% volume growth. The American market is growing well and China saw better momentum after a tough 2015 due to destocking by distributors. Other spirits, Glenmorangie and Belvedere, continued their growth.
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, Belvedere, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton, Bodega Numanthia and Ao Yun.
FASHION & LEATHER GOODS: GOOD PERFORMANCE OF LOUIS VUITTON, OTHER BRANDS STRENGTHENED THEIR POSITIONS
The Fashion & Leather Goods Business Group recorded organic revenue growth of 4% in 2016. On a reported basis, revenue growth was 3 %. Profit from recurring operations increased by 10%. Louis Vuitton had a good year driven by the level of creativity across all its businesses. The continued success of its iconic product range and the strong demand for recent creations such as the new luggage designed by Marc Newson and the Louis Vuitton fragrances, all contributed to this growth. Fendi recorded robust growth crossing the symbolic revenue threshold of 1 billion euros during the year. Loro Piana continued to expand its distribution network and opened a flagship store in Paris. Céline, Loewe and Kenzo all continued to grow. Marc Jacobs continued to work on changes to its collection. Donna Karan was sold in December to the American G-III group. Rimowa, world leader in luggage of excellence, joined the LVMH group.
Its Fashion and Leather Goods division includes Louis Vuitton, Céline, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana and Rimowa.
PERFUMES & COSMETICS: CONTINUED SUCCESS OF INNOVATIONS; EXCELLENT PERFORMANCE IN MAKEUP
The Perfumes & Cosmetics Business Group recorded organic revenue growth of 8%. On a reported basis, revenue growth was 6%. Profit from recurring operations increased by 5%. The inauguration of the new atelier for the creation of fragrances, Les Fontaines Parfumées, at Grasse was a highlight of the year. Parfums Christian Dior grew market share in all regions, driven by the worldwide success of Sauvage and the vitality of its iconic perfumes J’adore and Miss Dior. The progress of makeup also contributed to the Maison’s excellent performance. Guerlain benefitted from the successful launch of its new makeup collection inspired by its fragrance La Petite Robe Noire. Benefit experienced strong growth driven by the success of its new collection for eyebrows. Make Up For Ever, Fresh and Kat Von D performed well.
LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe as well as other promising cosmetic companies (BeneFit Cosmetics, Make Up For Ever, Acqua di Parma and Fresh).
WATCHES & JEWELRY: MARKET SHARE GAINS FOR BVLGARI AND TAG HEUER
The Watches & Jewelry Business Group recorded organic revenue growth of 5%. On a reported basis, revenue growth was 5%. Profit from recurring operations increased by 6%. Bvlgari continued to gain market share with enhancements to its Serpenti, Diva and B.zero1 lines. Growth continued in China, Korea and in the Middle East. TAG Heuer grew despite a difficult market for watches, gained market share and benefitted from the success of its new collections and its connected watch. Hublot accelerated its development in Asia and recorded the best year in its history. Chaumet continued to move its product lines upmarket and inaugurated a new boutique concept in Hong Kong.
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.
SELECTIVE RETAILING: GOOD PERFORMANCE AT SEPHORA, DFS IMPACTED BY A DIFFICULT TOURISM CONTEXT IN ASIA
The Selective Retailing Business Group recorded organic revenue growth of 8%. On a reported basis, revenue growth was 7%. Profit from recurring operations declined by 2%. Sephora gained market share across all regions and once again recorded double-digit growth in both revenue and profits. More than a hundred stores were opened in 2016 including notably a flagship store in the World Trade Center in New York and major renovations in Boston and Singapore. Its online offer accelerated with the launch in six new countries. DFS continued to face a difficult environment, notably in Hong Kong. The expansion into new destinations continued. The opening of the T Galleria in Angkor in Cambodia and one in Venice, Italy were the highlights of the year.
LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Royal Van Lent and Cheval Blanc hotels.
Key figures:
Euro millions
2015
2016
% change
Revenue
35 664
37 600
+ 5 %
Profit from recurring operations
6 605
7 026
+ 6 %
Group share of net profit
3 573
3 981
+ 11 %
Free cash flow*
3 679
3 974
+ 8 %
Net financial debt
4 235
3 265
– 23 %
Total equity
25 799
27 903
+ 8 %
* Before available for sale financial assets and investments, transactions relating to equity and financing activities
Revenue by business group:
Euro millions
2015
2016
% change
2016/2015
Reported Organic*
Wines & Spirits
4 603
4 835
+ 5 %
+ 7 %
Fashion & Leather Goods
12 369
12 775
+ 3 %
+ 4 %
Perfumes & Cosmetics
4 671
4 953
+ 6 %
+ 8 %
Watches & Jewelry
3 308
3 468
+ 5 %
+ 5 %
Selective Retailing
11 193
11 973
+ 7 %
+ 8 %
Other activities and eliminations
(480)
(404)
–
–
Total LVMH
35 664
37 600
+ 5 %
+ 6 %
* With comparable structure and exchange rates.
Profit from recurring operations by business group:
Euro millions
2015
2016
% change
Wines & Spirits
1 363
1 504
+ 10 %
Fashion & Leather Goods
3 505
3 873
+ 10 %
Perfumes & Cosmetics
524
551
+ 5 %
Watches & Jewelry
432
458
+ 6 %
Selective Retailing
940
919
– 2 %
Other activities and eliminations
(159)
(279)
–
Total LVMH
6 605
7 026
+ 6 %
2016 Revenue (Euro millions)
FY 2016
Wines & Spirits
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Selective Retailing
Other activities & eliminations
Total
First Quarter
1 033
2 965
1 213
774
2 747
(112
)
8 620
Second Quarter
1 023
2 920
1 124
835
2 733
(67
)
8 568
Total First Half
2 056
5 885
2 337
1 609
5 480
(179
)
17 188
Third Quarter
1 225
3 106
1 241
877
2 803
(114
)
9 138
Nine months
3 281
8 991
3 578
2 486
8 283
(293
)
26 326
Fourth Quarter
1 554
3 784
1 375
982
3 690
(111
)
11 274
Total 2016
4 835
12 775
4 953
3 468
11 973
(404
)
37 600
2016 Revenue (Organic growth versus same period of 2015)
FY 2016
Wines & Spirits
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Selective Retailing
Other activities & eliminations
Total
First Quarter
+6%
0%
+9%
+7%
+4%
–
+3%
Second Quarter
+13%
+1%
+6%
+2%
+7%
–
+4%
Total First Half
+9%
0%
+8%
+4%
+5%
–
+4%
Third Quarter
+ 4%
+5%
+10%
+2%
+8%
–
+6%
Nine months
+7%
+2%
+8%
+4%
+6%
–
+5%
Fourth Quarter
+7%
+9%
+7%
+8%
+11%
–
+8%
Total 2016
+7%
+4%
+8%
+5%
+8%
–
+6%
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
1 129
723
2 648
(144)
8 323
Second Quarter
938
2 958
1 099
829
2 627
(67)
8 384
Total First Half
1 930
5 933
2 228
1 552
5 275
(211)
16 707
Third Quarter
1 199
2 939
1 143
852
2 603
(155)
8 581
Nine months
3 129
8 872
3 371
2 404
7 878
(366)
25 288
Fourth Quarter
1 474
3 497
1 300
904
3 315
(114)
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