Press Releases


July 26, 2007
LVMH delivers excellent results for the first half of 2007 - Organic revenue grows 12% - Operating profit up 11%

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €7.4 billion in the first half of 2007, reflecting organic growth of 12%.  All business groups enjoyed double-digit organic revenue growth.  Performance was particularly good in Europe, the United States and Asia.

Profit from recurring operations increased by 11% to €1 440 million.  This performance was achieved in a difficult currency environment and is even more noteworthy given the strong growth in the first half of 2006.  At constant exchange rates, profit from recurring operations increased by 16%.

Group share of net profit increased by 2% in the first half of 2007. This progression is explained by the change in net financial income, which included a high level of capital gains from disposals in the first half of 2006.

Bernard Arnault, Chairman and CEO of LVMH, commented:
“Our performance during the first half of the year once again demonstrates the exceptional appeal of our brands as well as the coherence and effectiveness of our strategy. The Group recorded a further increase in its current operating margin to more than 19%.  These results are even more remarkable given the significant negative impact of exchange rates in the first half of 2007. Numerous product launches, geographic expansion in targeted, high potential markets and growing success with new clients should allow LVMH to continue its progress in the second half of the year in a favorable economic environment.  All these elements enable us to confirm our objective of a significant increase in results for 2007.”

Euro millions H1 2006 H1 2007 % change
Revenue 6 968 7 412 + 6 %*
Profit from recurring operations 1 295 1 440 + 11 %
Operating profit

1 258

1 398

+ 11 %

Group share of net profit

817

834

+ 2 %

Cash flow from operations 1 485 1 675 + 13 %

* Organic revenue growth of 12% (with comparable structure and exchange rates)


Highlights of the first half of 2007 were:

 

Revenue by business group:

 

Euro millions 

H1 2006 H1 2007

Change
H1 2007/H1 2006

Reported Organic*
Wines & Spirits 1 220 1 314 + 8 % + 13 %
Fashion & Leather Goods 2 466 2 601 + 6 % + 12 %
Perfumes & Cosmetics 1 169 1 264 + 8 % + 12 %
Watches & Jewelry 333 390 + 17 % + 23 %
Selective retailing 1 798 1 891 + 5 % + 10 %
Other activities and eliminations (18) (48) - -
Total 6 968 7 412 + 6 % + 12 %

* On a constant structural and exchange rate basis


Profit from recurring operations, by business group:

 

Euro millions H1 2006 H1 2007 % change
Wines & Spirits 355 393 + 11 %
Fashion & Leather Goods

742

814

+ 10 %

Perfumes & Cosmetics

79

108

+ 37 %

Watches & Jewelry 30

57

+ 90 %
Selective Retailing

147

151

+ 3 %

Other activities and eliminations

(58)

(83)

-

Total LVMH 1 295 1 440 + 11 %



Wine & Spirits: momentum in Europe and continued growth in volumes

Wines & Spirits achieved organic revenue growth of 13% in the first half of 2007.  Profit from recurring operations rose 11% to €393 million.   This increase was due to both growth in volumes associated with a product mix improvement and to an increase in prices in most regions.  Champagne volumes increased by 9%, driven notably by sales of rosé.  The excellent performance of Hennessy cognac was confirmed with an 8% growth in volumes.  Its premium qualities continue to register the highest levels of growth, notably in China and Russia.  At the beginning of the year, a stake was taken in Wen Jun Spirits, the Chinese producer of premium white liquor, in order to benefit from the strong growth in demand in this market.


Fashion & Leather Goods: continued exceptional growth at Louis Vuitton

Fashion & Leather Goods registered organic revenue growth of 12%.  Profit from recurring operations rose 10% to €814 million. With double-digit organic revenue growth, Louis Vuitton continues to strengthen its market position and to deliver exceptional profitability. The trend has improved noticeably in Japan. Following the Damier Azur collection’s successful launch at the end of 2006, the development of traditional lines such as Monogram has also been extremely well received by clients.  Also of note has been the progress of the ready-to-wear, shoe and eyewear collections. Fendi continued the excellent trend experienced in 2006. The other fashion lines, notably Marc Jacobs, Loewe and Givenchy have also seen an improvement in profitability.


Perfumes & Cosmetics: strong improvement in results

In the first half of 2007, Perfumes & Cosmetics recorded organic revenue growth of 12% and a 37% increase in profit from recurring operations.  Parfums Christian Dior continued its remarkable momentum and won further market share.  Perfumes performed exceptionally well, sustained by the continued success of J’Adore and Miss Dior Chérie and the promising launch of Fahrenheit 32. The new Rouge Dior and the skincare product Capture have also contributed to the strong growth of the brand during the period.  The successful roll-out of Insolence by Guerlain and KenzoAmour, as well as the very positive debuts of Ange ou Démon at Givenchy, have equally contributed to the performance of the business group’s activities. BeneFit, Make Up For Ever and Parfums Loewe benefited from the broadening of their product offering.


Watches & Jewelry: strong increase in current operating margin

Watches & Jewelry recorded organic revenue growth of 23% in the first half of 2007.  Profit from recurring operations rose by 90%. TAG Heuer continued to expand its higher end range of products and grew strongly in all of its markets, driven by the development of its iconic lines F1, Link, Aquaracer and Carrera. Zenith confirmed the success of its sports line Defy and Dior Watches confirmed that of its Christal range. Chaumet’s progress was buoyed by the strengthening of its Liens and Attrape-moi collections.  De Beers progressed well in Asia and the United States.


Selective Retailing: further improvement in results despite the weakness of the yen

Selective retailing posted organic revenue growth of 10% in the first half of 2007.  Profit from recurring operations increased to €151 million despite the unfavorable currency impact, which particularly affected the travel retail business. DFS benefited from the purchasing power of its Chinese clientele, which is similar to that of other Asian customers.  Despite the weak yen, which has restricted the spending of Japanese travelers, DFS maintained rigorous operational management to ensure solid profitability.  Sephora continues to grow at a robust rate and has improved its profitability in the first half of 2007. It has won market share in Europe and in the United States thanks to its policy of innovation and exclusivity and an effective loyalty program. New Sephora stores have been opened in the Middle East and in Central Europe and the brand performed well in China.

Outlook for 2007

In a favorable economic background for the Group’s businesses, LVMH will continue to grow thanks to both the numerous product launches planned before the end of the year and to its geographic expansion. These factors allow the Group to confirm its objective of a significant increase in its 2007 results.

Our strategy of focusing on quality across our entire product range, combined with the dynamism and unparalleled creativity of our teams, will enable us to reinforce, once again in 2007, LVMH’s global leadership position in luxury products.

An interim dividend payment of €0.35 will be paid on December 3, 2007.

Regulated information related to this press release is available on our internet site www.lvmh.com.