2014 ANNUAL
RESULTS
February 3, 2015
Bernard Arnault
Very good performance of LVMH
Mixed economic and currency environment
Organic revenue growth of 5%
Record Group share of net profit
Profit from recurring operations of €5.7 billion
Particularly solid financial position
Free cash flow of €2.8 billion
Net debt to equity ratio of 21%
3
2014 ANNUAL RESULTS
Wines & Spirits - 2014 Highlights
Revenue and profit penalized by destocking by
distributors in China
Champagne and Wines
Champagne: volumes +4% with a good progress of
prestige cuvées
Wines: good performance of sparkling wines
Cognac and Spirits
Hennessy: excellent momentum in the US partially offsetting
destocking by distributors in China
Other spirits: volumes +2 % with growth of Glenmorangie
and Belvedere
Sustained investments
2014 ANNUAL RESULTS
4
Fashion & Leather Goods - 2014 Highlights
Major success of new products at Louis Vuitton
and further strengthening of other fashion brands
Louis Vuitton: strong creative dynamic
Excellent response to Nicolas Ghesquière’s first shows
Major success of new models in leather and Monogram
canvas
Controlled evolution of store network
Loro Piana: smooth integration, good growth in retail
Fendi: good performance of iconic leather lines and
qualitative distribution
Céline: strong growth of collections
Further creative strengthening and investments in other
fashion brands
5
2014 ANNUAL RESULTS
Perfumes & Cosmetics - 2014 Highlights
Excellent momentum and market share gains
Parfums Christian Dior: strong growth of emblematic
lines J’adore, Miss Dior et Dior Homme,
success of innovations in make-up and development of
skincare in Asia
Guerlain: successful launch of L’Homme Idéal
and opening at Chartres of La Ruche, new
manufacturing facility dedicated to make-up and
skincare
Benefit: considerable worldwide success of new
products
Make Up For Ever and Fresh: continued rapid growth
2014 ANNUAL RESULTS
6
Watches & Jewelry - 2014 Highlights
Strengthened positions in jewelry and
cautious purchasing by multi-brand watch retailers
Remarkable performance of Bvlgari driven by success
of iconic products and new launches
Refocused TAG Heuer on historic core offer and
adapted organization to this strategy
Strengthened brands’ image with sustained
communication and qualitative development of
distribution
Optimization of production capacities to develop the
control over our watchmaking and jewelry know-how
7
2014 ANNUAL RESULTS
Selective retailing - 2014 Highlights
Expansion of Sephora and impact of monetary
and geopolitical changes on DFS
Sephora
Double-digit organic revenue growth and market share
gains in all countries
Excellent performance in North America, Middle East, Asia
and even in Europe
Continued expansion of store network
Good profitability
Strong growth of online sales
DFS
Difficult context in Asia
Impact of renewal of several airport concessions on
profitability
Good performance of airport activities in Hong Kong and
North America
2014 ANNUAL RESULTS
8
2015 Outlook
Rebound in VSOP cognac volume in China and
focus on innovation of Wines and Spirits brands
Continue the strategy of Louis Vuitton, and accelerate
profitable growth of other fashion brands
Increase advance of Parfums Christian Dior and support
Guerlain’s international development
Continue to refocus TAG Heuer and build on
momentum at Bvlgari, optimize production facilities
DFS to adapt to geopolitical context and Sephora to
continue innovation dynamic in stores and in the digital
world
9
2014 ANNUAL RESULTS
Confidence for 2015
Maintain strong creativity in our brands
Innovate while remaining faithful to origins
Place customer relationship at heart of development
Further accentuate innovative products
Perpetuate the quality of our products
Ensure preservation of raw materials
Optimize production tools
Support entrepreneurial spirit of our teams
Agility of our organization
Focus on continuous improvement
Rigorous cost management in climate of economic,
monetary and geopolitical uncertainties
LVMH objective is to reinforce its global
leadership position in luxury goods
2014 ANNUAL RESULTS
10
Jean-Jacques
Guiony
Quarterly evolution of 2014 revenue
Q1 2014
Q2 2014
H1 2014
Q3 2014
9M 2014
Q4 2014
2014
7 206M€
6 803M€
14 009M€
7 388M€
21 397M€
9 241M€
30 638M€
+ 4%
+ 1%
+ 3%
+ 6%
+ 4%
+ 10%
+ 6%
5%
4%
4%
2%
2%
-4%
0%
2%
-2%
5%
6%
3%
3%
2%
-5%
-4%
Currency impact
Structure
5%
3%
2%
Organic growth
The principles used to determine the net impact of exchange rate fluctuations on revenue of entities
reporting in foreign currencies (“currency impact”) and the net impact of changes in the scope of
consolidation (“perimeter impact”) are described on page 9 of the 2014 Financial Documents.
2014 ANNUAL RESULTS
12
3%
-2%
2014 revenue by region
In % of total revenue
24%
United States
(inc. Hawaii)
19%
Europe
(exc. France)
7%
Japan
10%
France
29%
11%
Asia (exc. Japon)
Other markets
13
2014 ANNUAL RESULTS
Revenue change by region
Organic growth
versus same period of 2013
LVMH Group
9 months 2014
Q4 2014
2014
United States*
+ 6%
+ 13%
+ 8%
Japan
+ 9%
+ 7%
+ 8%
Asia
+ 1%
- 6%
- 1%
Europe
+ 1%
+ 5%
+ 3%
* exc. Hawaii
2014 ANNUAL RESULTS
14
Revenue by business group
In millions of euros
Wines & Spirits
2013*
2014
Reported
growth
Organic
growth
4 173
3 973
- 5%
- 3%
Champagne & Wines
1 937
1 985
+ 2%
+ 6%
Cognac & Spirits
2 236
1 988
- 11%
- 10%
Fashion & Leather Goods
9 883
10 828
+ 10%
+ 3%
Perfumes & Cosmetics
3 717
3 916
+ 5%
+ 7%
Watches & Jewelry
2 697
2 782
+ 3%
+ 4%
Selective Retailing
8 903
9 534
+ 7%
+ 8%
Others and eliminations
(357)
(395)
-
-
29 016
30 638
+ 6%
+ 5%
Total LVMH
*Restated to reflect the application of IFRS 10 and 11 on consolidation.
2014 ANNUAL RESULTS
15
Organic revenue growth by business group
Organic growth versus same period of 2013
H1 2014
Q3 2014
Wines & Spirits
- 1%
- 7%
- 1%
- 3%
Fashion & Leather Goods
+ 4%
+ 2%
+ 4%
+ 3%
Perfumes & Cosmetics
+ 6%
+ 11%
+ 7%
+ 7%
Watches & Jewelry
+ 3%
+ 8%
+ 3%
+ 4%
Selective Retailing
+ 9%
+ 7%
+ 8%
+ 8%
Total LVMH
+ 5%
+ 4%
+ 5%
+ 5%
2014 ANNUAL RESULTS
16
Q4 2014
2014
Summarized income statement
In millions of euros
2013*
2014
% Change
Revenue
29 016
30 638
+ 6%
Gross margin
19 019
19 837
+ 4%
(10 767)
(11 744)
+ 9%
(2 212)
(2 373)
+ 7%
Marketing and selling expenses
General and administrative expenses
Equity investment income
Profit from recurring operations
Other operating income and expenses
Operating profit
Net financial income (expense)
(23)
(5)
6 017
5 715
(119)
(284)
5 898
5 431
(198)
2 947
(1 753)
(2 273)
Net profit before minority interests
3 947
6 105
Minority interests
(511)
(457)
Group share of net profit
3 436
5 648
Income taxes
- 5%
- 8%
+ 55%
+ 64%
*Restated to reflect the application of IFRS 10 and 11 on consolidation.
17
2014 ANNUAL RESULTS
Profit from recurring operations by business group
In millions of euros
2013*
2014
% Change
Wines & Spirits
1 367
1 147
- 16%
Champagne & Wines
594
565
- 5%
Cognac & Spirits
773
582
- 25%
3 135
3 189
+ 2%
Perfumes & Cosmetics
414
415
0%
Watches & Jewelry
367
283
- 23%
Selective Retailing
908
882
- 3%
Others and eliminations
(174)
(201)
ns
Total LVMH
6 017
5 715
- 5%
Fashion & Leather Goods
*Restated to reflect the application of IFRS 10 and 11 on consolidation.
2014 ANNUAL RESULTS
18
Profit from recurring operations
on a same structure and currency basis
In millions of euros
6 017
Organic
Structure
Currency
- 145
+125
- 282*
5 715
2013
2014
* With Fashion & Leather Goods: -149M€
2014 ANNUAL RESULTS
19
Change in net financial income (expense)
In millions of euros
2013*
2014
Change
(M€)
Cost of net financial debt
(101)
(115)
-14
Ineffective portion of foreign currency hedges
(159)
(238)
-79
94
3 337
3 243
Other items - net
(32)
(37)
-5
Net financial income (expense)
(198)
2 947
3 145
Net gain/(loss) relating to AFS** assets
and other financial instruments, dividends
received
*Restated to reflect the application of IFRS 10 and 11 on consolidation.
**AFS: Available for sale
2014 ANNUAL RESULTS
20
Particularly sound financial structure, rating A+
In billions of euros
53.4
53.4
Change in total equity
43%
Non current
assets
following distribution in kind of
Hermès shares
Total equity
66%
Decrease of net debt
Inventories
18%
Other current
assets
16%
Asset
34%
Non current
liabilities
23%
Current
liabilities
Increase of inventories
attributable to growth in
Group’s businesses
Liabilities
Dec 31, 2014
2014 ANNUAL RESULTS
21
Analysis of cash flow from operations
In millions of euros
2013*
2014
Change
(M€)
Cash from operations before changes
in working capital
7 277
7 080
- 197
(111)
(116)
-5
(1 832)
(1 639)
+ 193
5 334
5 325
-9
Net interest paid
Income taxes paid
Net cash from operations before
changes in working capital
Working capital requirements
Operating investments
Free cash flow**
(620)
(718)
- 98
(1 657)
(1 775)
- 118
3 057
2 832
- 225
* Restated to reflect the application of IFRS 10 and 11 on consolidation.
** Before available for sale financial assets and investments, transactions relating to equity and financing activities.
2014 ANNUAL RESULTS
22
Net financial debt and free cash flow
In millions of euros
5 309
4 805
4 660
4 233
3 053
3 057
2 678
2 116
20%
19%
17%
15%
31/12/2010
2 832
2 421
31/12/2011
31/12/2012
Net financial debt
31/12/2013
Free cash flow
21%
31/12/2014
Gearing
23
2014 ANNUAL RESULTS
2014 dividend up 3%
In euros
Gross dividend per share
Average annual growth
rate over 5 years
+14 %
3.10
3.20
2.90
2.60
2.10
1.65
2009
2014 ANNUAL RESULTS
2010
2011
2012
24
2013
2014