Excellent 2004 for LVMH – Net income rises to over one billion Euros (+40%) – New objective of growth in 2005

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded 2004 operating income growth of 11% amounting to 2,420 million Euros on sales of 12.6 billion Euros.

All business groups contributed to this noteworthy performance which was achieved in a difficult currency environment during 2004.  At constant exchange rates, the annual growth in operating income would have been 24%.

Net income before goodwill amortization increased by 26% compared to 2003. This improvement is primarily due to lower financial expenses following further debt reduction.
Net income increased by 40% exceeding the one billion Euro threshold for the first time.

Highlights of 2004 included:


    • Continued organic growth of the Group’s leading brands, especially Louis Vuitton, Moët & Chandon, Hennessy, Veuve Clicquot, Parfums Christian Dior and TAG Heuer,
    • Growth in market share across all Group operations,
    • Operating margin of 19%, an improvement over 2003,
    • Exceptional margin levels at Louis Vuitton which recorded remarkable sales increases, notably in the US and Asia,
    • Significant turnaround in Watches & Jewelry which returned to profitability thanks to the progress of its leading brands,
    • Improved profitability in Selective Retailing,
    • Increased cash flow from operations for the fourth consecutive year for a total of 2.1 billion Euros,
    • Net gearing* level which reached the 50% objective set for end of 2004, following further debt reduction and a strengthened financial structure.


* net of market value of Bouygues shares.


In million euros 2003 2004 Change
Sales 11 962 12 693 + 6 % / + 11 %*
Operating income 2 182 2 420 + 11 %
Net income before goodwill amortization 1 023 1 294 + 26 %
Net income 723 1 010 +40 %

* organic growth : with comparable structure and exchange rates.

Operating income by business group:

i 2003 2004
W 796 806
Fashion & Leather Goods 1 311 1 329
Perfumes & Cosmetics 178 181
Watches & Jewelry (48) 13
Selective Retailing 106 244
Other activities and eliminations (161) (153)

Wines and Spirits: Growth of premium qualities

Operating income for the Wines & Spirits business group reached 806 million euros in 2004. The firm pricing policy and increased sales of the prestige brands offset the negative impact of exchange rates.
The star champagne brands, Dom Pérignon, Krug, Veuve Clicquot and Moët & Chandon, all grew in their key strategic markets, notably in the US and Asia. The new world wines businesses also progressed well.
Hennessy, whose premium qualities saw solid growth, further strengthened its leadership in the US and developed rapidly in Russia and Asia, notably in China.
The strengthening of the distribution network, with the aim of improving sales and profitability, has continued throughout the year, particularly in the US.
In line with our policy of developing premium brands, the Group increased its share in Millennium, whose leading brand is Belvedere vodka, to 70%, and took control of the prestigious single malt whisky Glenmorangie.

Fashion & Leather Goods: Another record year for Louis Vuitton

After the very substantial increase recorded in 2003, the Fashion & Leather Goods business group further improved its operating income. This performance, on top of a high comparison base, is all the more remarkable given the weakness of the dollar.
Louis Vuitton recorded double digit organic sales growth thanks to the appeal of its products, and its capacity to innovate while maintaining exceptional operating margin levels.
The 150th anniversary celebrations throughout 2004 enabled the brand to reinforce its image around the world.  New store openings, notably in New York, Osaka, and London, but also in Shanghai, with the opening of the first global store (the 13th store in China), demonstrate the commitment to developing the brand in growth markets.
The pace of new product launches will continue in 2005, notably with the much-anticipated Monogram Cerise collection, a new collaboration between Marc Jacobs and Takashi Murakami.
Among the other Group brands, Celine, Marc Jacobs, Pucci and Berluti continue to grow with notable development in Asia where the brands benefit from a growing clientele. The reorganisation at Fendi and Donna Karan continue with good prospects for the medium term.

Perfumes & Cosmetics: Success of innovations

The Perfumes & Cosmetics business group improved profitability in 2004, a year highlighted by numerous innovations.
Parfums Christian Dior recorded growth in both sales and operating income in a highly competitive market. This is due in part to the success of Pure Poison, one of the world’s leading perfumes in 2004, and to the significant progress made in make-up.  The brand achieved excellent results in Japan, China and in travel retail.
The success of new products including L’Instant pour Homme from Guerlain, the new make-up line from Givenchy, the KenzoAir and Solo Loewe perfumes, all contributed to this performance. BeneFit continued its double-digit growth in the US and the UK where the brand grew market share.

Watches & Jewelry: Steady growth and return to profitability

The Watches & Jewelry business group recorded a notable turnaround last year, returning to profitability. All brands recorded better sales growth than their respective markets. TAG Heuer confirmed its position as one of the Group’s star brands and achieved strong growth in both sales and profitability. Growth has been particularly remarkable in the US and Asia. Zenith confirmed its position as a premium watchmaker and Chaumet continued to grow in Asia and Europe. The success of Chiffre Rouge and of Dior watches in general, is another highlight of 2004.

Selective Retailing: Increase in results

Boosted by the general recovery in tourism and the emergence of Chinese tourism, DFS reinforced its global leadership. The development of DFS in Asia continued with the late 2004 opening of the Galleria in Okinawa which is dedicated to luxury products.
Due to its innovative concept, Sephora continued to win market share in the US, Europe and France, and achieved a commensurate increase in profitability. Targeted expansion of the store network into markets with the highest potential continued with the opening of the first store in Canada.  The growing success of the Sephora.com website gives every confidence for future development.

Outlook for 2005: Objective of further tangible growth in operating income.

Initial indications for 2005 confirm the growth trends experienced in 2004. The Group achieved organic sales growth of 12 % over the first two months of the year. Louis Vuitton recorded an excellent start to the year and continues double-digit sales growth.

The Group’s performance in 2004, in a difficult currency environment, underlines the efficiency of its growth model based on the development of a unique portfolio of brands.

After an excellent 2004, LVMH is well positioned for 2005.

LVMH will continue its strategy of concentrating on internal growth and the development of its leading brands in 2005. As in 2004, the Group is targeting an improvement in profitability and is focusing on cash flow.

LVMH has set itself an objective of a tangible increase in operating income in 2005.

The geographic balance of its activities, the strength and complimentarity of its brands along with the exceptional talent of its teams, will allow the Group to gain market share and further strengthen its lead in the global luxury goods market.

Dividend increase of 12%

At the Annual General Meeting of Shareholders on May 12, 2005, LVMH will propose a dividend increase of 12%, or 0.95 Euro per share, in line with its policy of progressive growth of shareholder returns. An interim dividend of 0.25 Euro per share was paid on December 2, 2004. The balance of 0.70 Euro will be paid on May 18, 2005.