Record results for LVMH in 2018

Paris, 29 January 2019

LVMH Moët Hennessy Louis Vuitton, the world's leading luxury products group, recorded revenue of €46.8 billion in 2018, an increase of 10% over the previous year. Organic revenue growth was 11%, and 12% excluding the impact of the closure of the Hong Kong airport concessions at the end of 2017. All business groups recorded excellent performances.

Organic revenue growth in the fourth quarter was 10%* (excluding the impact of the closure of the Hong Kong airport concessions). The quarter continued the trend that has been underway since the beginning of the year.

Profit from recurring operations amounted to €10 billion in 2018, up 21%. Operating margin reached a level of 21.4%, an increase of 1.9 percentage points. Group share of net profit amounted to €6.4 billion, up 18%.

Bernard Arnault, Chairman and CEO of LVMH, commented, "LVMH had another record year, both in terms of revenue and results. In particular, profit from recurring operations crossed the €10 billion mark. The desirability of our brands, the creativity and quality of our products, the unique experience offered to our customers, and the talent and the commitment of our teams are the Group's strengths and have once again made the difference. In 2019 LVMH will continue its strong dynamic of innovation, targeted investments, combining tradition and modernity, long-term vision and responsiveness, entrepreneurial spirit and a sense of responsibility. In an environment that remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again in 2019, our leadership in the universe of high quality products."

Key highlights from 2018 include:

• Further double-digit increase in revenue and profit from recurring operations, which reached record levels,
• Continued growth in Europe, the United States, Asia and Japan,
• Excellent performance in Wines and Spirits and exceptional grape harvests,
• Success of both iconic and new products at Louis Vuitton, whose profitability remains at an exceptional level,
• Very good first year for Christian Dior Couture within LVMH,
• Creative renewal at several Maisons,
• Strong growth at the flagship brands of Perfumes and Cosmetics,
• Excellent year for Bvlgari and good development of Hublot and TAG Heuer,
• Growth at Sephora, which strengthened its positions in all its markets and in digital,
• Agreement with the Belmond group,
• Free cash flow of €5.5 billion, up 16%,
• Gearing of 16.2% at the end of December 2018.

*Organic growth of 9% including the impact of the closure of the Hong Kong airport concessions.

Key figures

* Restated to account for the impact of the application of IFRS 9 Financial Instruments.
** Excluding the acquisition of Belmond shares at the end of 2018 for €274m.

Revenue by business group :

* With comparable structure and exchange rates. The currency effect was -4% and the structural impact was + 3%.
** + 12% excluding the closure of Hong Kong airport concessions in 2017.

Profit from recurring operations by business group:

Wines & Spirits: good momentum in China and significant growth in Europe and the United States, despite supply constraints

The Wines & Spirits business group achieved organic revenue growth of 5%. Profit from recurring operations increased by 5%. The business group reaffirmed its leadership position by pursuing its value strategy and balanced geographic development. In the champagne business, prestige vintages performed remarkably well, while a firm price increase policy continued. A key highlight of the year was the exceptional harvest both in terms of quantity and quality. Hennessy cognac recorded good growth in the US market against a backdrop of tight supply; the Chinese market experienced strong momentum. Glenmorangie and Ardbeg whiskies grew rapidly. Our prestige wines obtained the best ratings.

Fashion & Leather Goods: exceptional performance of Louis Vuitton across all its businesses and strengthening of other brands

The Fashion & Leather Goods business group achieved organic revenue growth of 15% in 2018. Profit from recurring operations was up 21%. Louis Vuitton delivered an exceptional performance, to which all businesses and regions contributed. Its creative strength lies notably in its iconic leather goods lines which are continuously rejuvenated, and in its ready-to-wear and shoe lines, designed by the respective Louis Vuitton Creative and Artistic Directors, Nicolas Ghesquière for the women's collections and Virgil Abloh, who joined in 2018, for the men's collections. The qualitative development of its stores continued in a very selective way. It is noteworthy that Louis Vuitton is the only brand in the world to never hold sales nor sell through outlets. Christian Dior had an excellent first full year within LVMH thanks to the creativity of Maria Grazia Chiuri for the Women's collections and to the arrival of Kim Jones, the new Artistic Director of Dior Homme. Fendi and Loro Piana continued to assert their know-how throughout their collections. Celine entered a new and ambitious stage of its development with the arrival of Hedi Slimane as Artistic, Creative and Image Director of the brand. His first runway show in October was a global success. Givenchy, Loewe and Kenzo progressed well. The other brands, Berluti with the arrival of Kris Van Assche, and Rimowa continued their dynamic momentum.

Perfumes & Cosmetics: successful innovation and rapid progress in Asia

The Perfumes & Cosmetics business group achieved organic revenue growth of 14%, driven by the performance of its flagship brands. Profit from recurring operations was up 13%. Parfums Christian Dior experienced remarkable growth and increased its market share in all regions of the world. The launch of its new perfume Joy and the exceptional worldwide success of Sauvage and the other iconic perfumes J'adore and Miss Dior are behind the strong growth of the Maison. Makeup and skincare also grew rapidly. Guerlain progressed well, driven in particular by the success of Abeille Royale in skincare and Rouge G in makeup. Benefit strengthened its leading position in the eyebrow segment and Parfums Givenchy accelerated its performance, thanks in particular to makeup and its new perfume L'interdit. Fresh and Fenty Beauty by Rihanna continued their exceptional growth.

Watches & Jewelry: excellent year for Bvlgari and good progress of watch brands

The Watches & Jewelry business group recorded organic revenue growth of 12%. Profit from recurring operations was up 37%. Bvlgari performed very well and gained market share. Its iconic jewelry and watchmaking lines Serpenti, Diva's Dream, B.Zero1, Lvcea and Octo grew strongly. Among the new product launches of the year, the Octo Finissimo watch and the Fiorever jewelry collection, designed around a central diamond, were exceptionally well received. Chaumet's growth was driven by the success of the Liens and Joséphine collections, particularly in Asia. The exhibition on its history at the Mitsubishi Ichigokan Museum in Tokyo was an immense success. In the watchmaking sector, TAG Heuer continued to develop its iconic lines and introduced a new variant of the smart watch. Hublot, which continued its progress, enjoyed strong growth in 2018 and considerable visibility as the FIFA World Cup Official Timekeeper.

Selective Retailing: sustained growth at Sephora and rebound of DFS's profitability

The Selective Retailing business group achieved organic revenue growth of 6%, up 12% excluding the Hong Kong airport concession closures. Profit from recurring operations was up 29%. Sephora had another year of growth and market share gains. Online sales grew rapidly, especially in North America and Asia. The extension and renovation of its distribution network continued in 2018 with around one hundred new stores opening around the world, including the new Nanjing Road store in Shanghai and the first Sephora-branded stores in Russia. Le Bon Marché accelerated the development of its loyalty program and launched a new children's department in the last quarter. The online platform, 24 Sèvres, launched a year ago, developed actively. DFS progressed strongly thanks to a particularly good performance in Hong Kong and Macao. The recently opened Gallerias in Cambodia and Italy also grew rapidly. The closure of the loss-making Hong Kong Airport concessions at the end of 2017 contributed to the rebound in profitability.

Cautiously confident for 2019

In an uncertain geopolitical and monetary context, LVMH is well-equipped to continue its growth momentum across all business groups in 2019. The Group will pursue its strategy focused on developing its brands by continuing to build on strong innovation and investments as well as a constant quest for quality in their products and their distribution.

Driven by the agility of its teams, their entrepreneurial spirit, the balance between its different businesses and geographic diversity, LVMH enters 2019 with cautious confidence and once again, sets an objective of reinforcing its global leadership position in luxury goods. 

Dividend up by 20%

At the Annual General Meeting on April 18, 2019, LVMH will propose a dividend of €6 per share, an increase of 20%. An interim dividend of €2 per share was paid on December 6 of last year. The balance of €4 per share will be paid on April 29, 2019.

The Board of Directors met on January 29th to approve the financial statements for 2018. 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.com.

APPENDIX

LVMH - Revenue by business group and by quarter

2018 Revenue (Euro millions)

2018 Revenue (Organic growth versus same period of 2017)

2017 Revenue (Euro millions)

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, Colgin Cellars, Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de Mi Tierra, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton, Bodega Numanthia and Ao Yun. Its Fashion and Leather Goods division includes Louis Vuitton, Christian Dior Couture, Celine, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana, RIMOWA and Jean Patou. LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe, Benefit Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty Beauty by Rihanna and Maison Francis Kurkdjian. LVMH's Watches and Jewelry division comprises Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred and Hublot. LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin d'Acclimatation, Royal Van Lent and Cheval Blanc hotels.

"This document may contain certain forward looking statements which are based on estimations and forecasts. By their nature, these forward looking statements are subject to important risks and uncertainties and factors beyond our control or ability to predict, in particular those described in LVMH's Reference Document which is available on the website (www.lvmh.com). These forward looking statements should not be considered as a guarantee of future performance, the actual results could differ materially from those expressed or implied by them. The forward looking statements only reflect LVMH's views as of the date of this document, and LVMH does not undertake to revise or update these forward looking statements. The forward looking statements should be used with caution and circumspection and in no event can LVMH and its Management be held responsible for any investment or other decision based upon such statements. The information in this document does not constitute an offer to sell or an invitation to buy shares in LVMH or an invitation or inducement to engage in any other investment activities."

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