INTERNATIONAL. Strong sales at DFS Group made a key contribution to double-digit revenue growth at LVMH’s Selective Retailing business in 2013.
LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €29.1 billion in 2013, an increase of +4% over the previous year. Organic revenue growth was +8%.
Within this, the Selective Retailing business group recorded organic revenue growth of +17% (+13% reported) in 2013. Profit from recurring operations in the division increased by +6%.
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LVMH said: “DFS recorded further strong sales increases, notably reflecting the first full year’s integration of three new concessions from the end of 2012 at Hong Kong International Airport – each having been the focus of significant investment in upgrading works. The destinations of Hong Kong and Macau maintained strong commercial momentum while the weakness of the Yen reduced the spending power of Japanese travellers, notably in Hawaii.”
Group-wide, with organic revenue growth of +8%, the fourth quarter performance was in line with the trends seen in the first nine months of the year.
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Profit from recurring operations rose to €6 021 million, an increase of +2% over the strong growth recorded in 2012. Current operating margin reached 21%. Group share of net profit was €3 436 million, in line with 2012 which included a special dividend.
LVMH Chairman and CEO Bernard Arnault said: “2013 saw another excellent performance from LVMH despite exchange rate volatility and slower growth in the European markets. Profit from recurring operations exceeded €6 billion for the first time. A significant event during the year was the acquisition of Loro Piana, a company famous for its unrivalled work with cashmere and rare textiles, and with which we share the same values of family and craftsmanship. All our brands have proven to be exceptionally dynamic. Looking beyond the appeal of our brands, it is the talent of our teams and their motivation that enables us to so effectively execute our strategy. In 2014, LVMH intends to further strengthen its global leadership position in high quality products by relying on its sound, long-term strategy.”
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Highlights of 2013 cited by LVMH included:
• Profit from recurring operations hitting €6 billion for the first time
• Good momentum in Asia and the US and continued growth in Europe
• A “remarkable performance” in Wines & Spirits
• Louis Vuitton’s profitability, which “remains at an exceptional level”
• Further investment in fashion brands
• The “strength and success” of Parfums Christian Dior
• Excellent results from Bulgari
• Continued progress at Sephora and DFS, “driven by innovation in products and services”
• A +20% increase in free cash flow to €3 billion
• A gearing ratio of less than 20% at the end of December 2013
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Performance by business group
The Wines & Spirits business group recorded organic revenue growth of +6% in 2013 (+1% reported). Profit from recurring operations increased by +9%.
LVMH noted: “In an environment marked by good momentum in Asia and the United States, and a contrasted market in Europe, the business group continued to reap the rewards of its value creation strategy: a focus on the high-end range, a strict pricing policy and a strong dynamic of innovation. Champagne saw sustained demand for its prestige vintages. Sparkling and still wines from Estates & Wines recorded solid performances. Hennessy Cognac’s growth was driven by the American market. Glenmorangie and Ardbeg whiskies recorded rapid increases in volumes. Momentum across all brands was supported by Moët Hennessy’s powerful and flexible distribution network and sustained investments.”
The Fashion & Leather Goods business group recorded organic revenue growth of +5% (-0.4% reported). Profit from recurring operations decreased by -4%. Over the year, Louis Vuitton maintained its “exceptional level of profitability”, said the group.
The Perfumes & Cosmetics business group “outperformed the market” by recording organic revenue growth of +7% (+3% reported). Profit from recurring operations increased by +2%. Parfums Christian Dior continued its momentum and gained market share, said LVMH. Guerlain continued to grow, it said, supported by its fragrance La Petite Robe Noire and the rapid progress of Orchidée impériale. Benefit recorded a further year of strong growth too, while Make Up For Ever and Fresh both achieved particularly strong performances in Asia, added the group.
The Watches & Jewelry business group recorded organic revenue growth of +4% in 2013 (-2% reported). Profit from recurring operations rose +12%.
LVMH noted: “An excellent performance in the directly owned boutiques, where the network continues to expand around the world, contributed to strengthening the image of the brands and the quality of their distribution.”
Outlook
The company said that “despite an uncertain economic environment in Europe, LVMH is well-equipped to continue its growth momentum across all business groups in 2014”.
It added: “The group will maintain a strategy focused on developing its brands by continuing to build on their savoir-faire, as well as through strong innovation and expansion in fast growing markets.”
