LVMH Anticipates Further Growth for 2001 After Record Profits in 2000.Business Editors PARIS--(BUSINESS WIRE)--March 7, 2001 LVMH LVMH Moët Hennessy-Louis Vuitton (upscale retailer) , Moet Hennessy Louis Vuitton The Louis Vuitton Company (more commonly known simply as Louis Vuitton) is a luxury French fashion and leather goods brand and company, headquartered in Paris, France. It is a division of the French holding company, LVMH Louis Vuitton Moët Hennessy S.A. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : LVMHY), the world's leading luxury products group, today announced a 27% increase in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. to reach 1,959 million Euros on sales of 11,581 million Euros and a 15% increase in net income from current group operations, rising to 846 million Euros for 2000. The year 2000 demonstrated the strength of the Group's brands, its continued financial performance and its ability to deliver sustained growth. Net Group income was 722 million Euros, an increase of 4% compared to 1999 and of 170% compared to 1998. Net income had risen by 160% in 1999, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de significant exceptional items linked, in particular, to a gain resulting from the sale of part of the Diageo stake. The Group's strong sales performance has carried over into 2001. Following an increase of 35% in 2000, sales for the first two months of 2001 increased 13% as compared to the same period a year ago. Consolidated figures as at 31st December are as follows: In millions Growth Growth of Euros 1998 1999 2000 99/2000 98/2000 ---------------------------------------------------------------------- Sales 6 936 8 547 11 581 35% 67% Operating income 1 184 1 547 1 959 27% 65% Net income from current group operations 525 738 846 15% 61% Net group income 267 693 722 4% 170% 2000 was notable for: - Strong growth (+35%) and increased market share in all areas of activity, confirming the Group's position of global leadership in the luxury sector; - Internal growth in line with management's expectations for all activities, led by innovation and new product launches. In its first year, J'Adore by Dior broke through the barrier of 100 million Euros in annual sales, a feat no other perfume has achieved in the past ten years. - A significant increase in operating income (+27%) with exceptional performances from Louis Vuitton, Perfumes, Hennessy Cognac and DFS. This growth exceeded the Group's target of more than 20% announced in March 2000, which was increased to more than 25% when the Group's first half results were announced in September. In two years, operating income has increased by 65%, increasing from 1.18 billion Euros to almost 2 billion Euros. Group operating margins represent 17% of sales. - Considerable commercial investments have enabled the Group to strengthen its distribution network, particularly for Louis Vuitton Malletier and Sephora. The total number of stores for all brands has increased from 1,005 to 1,286 in a year. - Acquisitions, which are promising sources of future growth. These include: Miami Cruiseline and La Samaritaine within the Selective Retailing business group; Fresh in Perfumes & Cosmetics; Fendi, Pucci and Gabrielle Studio, owner of the Donna Karan brands, for Fashion. In early 2001, the Watch & Jewelry business group created a joint venture with De Beers to develop jewelry products and stores, building on the renown and expertise of De Beers. Commenting on these results, Myron Ullman, Group Managing Director said: "These excellent results confirm the dynamic nature of the Group, the success of our strategy and the quality of our world-renowned brands. "The Group has capitalised upon its strong growth and financial performance to make further investments, enabling it to enhance its leading position in the luxury products market and to further strengthen the foundations for its future growth. LVMH has maintained a high level of investment to support its brands and launch new products and stores in new growth markets, which are vital for the future. "We have set ambitious targets for the coming years, all of them achievable thanks to the support, talent and dedication of all our teams at LVMH, who are absolutely key to the success of the Group." Evolution of operating income by business group: In millions of Euros 1999 2000 Growth ----------------------------------------------------------------------- Wines & Spirits 655 716 9% Fashion & Leather Goods 826 1 169 41% Perfumes & Cosmetics 146 184 26% Watch & Jewelry 5 59 - Selective Retailing (2) (2) - Other activities and write-offs (83) (167) - Total LVMH 1 547 1 959 27% Wines & Spirits: operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for Cognac Cognac (kônyäk`), city (1990 pop. 19,932), Charente dept., W France, in Angoumois, on the Charente River. The French brandy to which Cognac gives its name has been manufactured and exported from the city since the 18th cent. reached 32%. After an exceptional year in 1999, when operating income in Champagne & Wines grew by 34%, the increase for 2000 was 3%. As expected, our sales volumes declined after the Millennium celebrations, although much less than those of the champagne industry as a whole. LVMH's champagne houses succeeded in achieving a level of growth reflecting the quality of its value strategy, the strength of its international distribution and the power of its brands. Profitability - operating income against sales - increased to 30%. Operating income for Hennessy Cognac, already on an upward trend in 1999 (+5%), rose significantly in 2000 with growth of 23%. This was the result of a number of initiatives: a rejuvenated re·ju·ve·nate tr.v. re·ju·ve·nat·ed, re·ju·ve·nat·ing, re·ju·ve·nates 1. To restore to youthful vigor or appearance; make young again. 2. image with Hennessy Pure White, success with the top range VSOP VSOP very special (or superior) old pale: used of brandy or port and XO products, a developing presence in the US and Asia, stock adjustments for eaux-de-vie and industrial restructuring. Profitability rose to more than 32%. Fashion & Leather Goods: 41% operating income growth Louis Vuitton turned in an exceptional performance in 2000 (an increase of 37% in sales). The key factors of this success were new product launches, innovative advertising campaigns and the opening of new global stores, all of which will help drive future growth. This success surpassed management's expectations and production capacity could not meet demand in the fourth quarter of 2000. Operating margin for Louis Vuitton was 46%, an increase of 1 percentage point since 1999. The other companies in the Fashion and Leather Goods group have made palpable Easily perceptible, plain, obvious, readily visible, noticeable, patent, distinct, manifest. The term palpable usually refers to some type of egregious wrong, such as a governmental error or abuse of power. progress: Kenzo's operating income growth continued with an increase of 18%, while growth at Loewe has accelerated, with operating income up by 75%, thanks to the success of new products and a new boutique concept. Perfumes & Cosmetics: sales of J'Adore by Dior exceeded 100 million Euros in the first year The Perfumes & Cosmetics business group posted an increase of 26% in operating income. Profit growth in this business group has been spectacular - the result of initiatives such as new product launches, development and renovation of points of sale in department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. , industrial and commercial restructuring and targeted acquisitions of very profitable and innovative companies. The group's profitability is improving constantly, reaching 9% in 2000. Selective Retailing : improving profitability in Travel Retailing, expanding the Sephora franchise As in 1999, overall operating results for Selective Retailing were near breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations with different dynamics within the sector. Profits at DFS (Distributed File System) An enhancement to Windows NT/2000 and 95/98 that allows files scattered across multiple servers to be treated as a single group. With Dfs, a network administrator can build a hierarchical file system that spans the organization's LANs and Group improved to over 100 million Euros, exceeding management's expectations, with profitability reaching nearly 6%. The travel business was driven by visit increases at the DFS Galleria stores and merchandising improvements resulting from a reorientation Noun 1. reorientation - a fresh orientation; a changed set of attitudes and beliefs orientation - an integrated set of attitudes and beliefs 2. reorientation - the act of changing the direction in which something is oriented towards leading boutique brands and fashion apparel. The Group continued to focus its investment activities on Sephora, where sales growth accelerated as new store openings continued in key markets. The Sephora brand continues to gain an important presence in the US, Japan and Italy and has made new market entries in the U.K. and Greece. Sephora now has 461 stores in 12 countries, compared with 57 stores in France only in early 1998. Watch & Jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. : making the first significant contribution to Group operating income The performance of the Watch & Jewelry business group exceeded its targets (operating income: 59 million Euros); TAG Heuer TAG Heuer (pronounced: täg-hoi-er) is a Swiss watchmaker known for its mid - high range sports watches and chronographs. It is a division of leading luxury goods company LVMH. The company motto is "Swiss Avant-Garde Since 1860". confirmed its potential through very strong top range sports positioning and the success of its latest products. Chaumet has shown very good growth, especially in Japan. Ebel and Zenith zenith, in astronomy, the point in the sky directly overhead; more precisely, it is the point at which the celestial sphere is intersected by an upward extension of a plumb line from the observer's location. have established a new brand strategy and improved organisation, particularly in distribution where they are now benefiting from the business group's powerful network. Other Activities, excluding central costs, consist of the following elements: the media division, Sephora.com and Phillips. Profits from the media division were extremely good. Significant investments were made in advertising for the Sephora.com website. Phillips is currently being repositioned to become a global leader in the upscale segment of the auction world. Higher financial costs are mainly due to levels of net debt, and increased interest rates. The Group's policy for 2001, focusing on cash generation, and the falling trend in interest rates will have favourable effects for the current year. Outlook for 2001: The LVMH Group is well-prepared for a more difficult environment, with the slowing economy in the US and the falling dollar and yen against the Euro. As in the past, the Group's broad geographical presence and the strength and diversity of its brands will enable it to face a more uncertain economic climate with confidence. In 2001, organic growth and the development of its brands will be the Group's priority. Investments made in 2000, acquisitions and new products will all provide benefits this year. The Group's foreign exchange hedging policy is another positive factor for 2001. In 2001, LVMH is again setting itself double-digit growth targets for sales and operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. . At the AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f on 14th May 2001, LVMH will propose the payment of a dividend of 0.75 Euros per share. An interim dividend of 0.22 Euros per share was paid on 1st December 2000. The balance of 0.53 Euros will be paid in June 2001. Paris, 7 March 2001. LVMH LVMH Moet Hennessy Louis Vuitton is the world's leading luxury products group. The Group is represented in Wines and Spirits by a portfolio of brands that includes Moet & Chandon, Dom Perignon Dom Perignon renowned vintage French champagne. [Western Cult.: Misc.] See : Luxury , Veuve Clicquot Ponsardin, Krug, Pommery, Chateau d'Yquem, Chandon, Hennessy and Hine. Its Fashion and Leather Goods division includes Louis Vuitton, the world's leading luxury brand, as well as Celine, Loewe, Kenzo, Givenchy, Christian Lacroix Christian Marie Marc Lacroix (May 16 1951 in Arles, France) is a French fashion designer. Early life In early childhood, Lacroix attended bullfighting events and enjoyed Gypsy and Provencal traditions as well. , Thomas Pink Thomas Pink is a retail clothing business which started in London in 1984. The concept was created by three Irish entrepreneurs, brothers James, Peter and John Mullen. The company was named for an 18th century London tailor who was known for making much sought-after red ('pink') , Fendi and Pucci. LVMH is present in the Fragrances and Cosmetics sector with Parfums Christian Dior Parfums Christian Dior is the make-up and perfumery line of Christian Dior SA, based on the company created by twentieth-century fashion designer Christian Dior. It was created in 1947 with the launch of Miss Dior perfume. , Guerlain, Givenchy and Kenzo, and has recently acquired six promising cosmetic companies, Bliss, Hard Candy, BeneFit Cosmetics, Urban Decay For the cosmetics company, see . Urban decay is a process by which a city, or a part of a city, falls into a state of disrepair. It is characterized by depopulation, property abandonment, high unemployment, fragmented families, political disenfranchisement, crime, and , Make Up For Ever and Fresh. In addition, LVMH recently acquired Gabrielle Studio which owns the legendary Donna Karan Donna Karan is the fashion designer and the creator of the DKNY (Donna Karan New York) clothing label. She was born Donna Ivy Faske on October 9, 1948 in Forest Hills, New York. brand name. LVMH is active in selective retailing through DFS, Miami Cruiseline, Sephora, Le Bon Marche and La Samaritaine La Samaritaine is a large department store in Paris, France. It is owned by LVMH, a luxury-goods maker. The large building is located in the First Arrondissement, on the banks of the River Seine, at the north end of the Pont Neuf. The nearest Metro station is Pont-Neuf. . LVMH's Watch and Jewelry division comprises TAG Heuer, Ebel, Chaumet, Zenith, Fred, as well as Omas, the prestigious Italian writing instruments company. Phillips, one of the world's largest auction houses, which has recently teamed up with L'Etude Tajan and Geneva Geneva, canton and city, Switzerland Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. art dealer de Pury & Luxembourg Art, also belongs to the LVMH group. Connaissance des Arts and Art & Auction Magazine, two specialized publications, also recently joined the Group. LVMH has recently launched E-luxury, the authoritative online source for luxury goods on the Internet. LVMH shares (LVMH.PA) are listed on the Paris Stock Exchange and NASDAQ in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (LVMHY). "Certain information included in this release is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company's businesses include its wines and spirits, fashion and leather goods, fragrances and cosmetics, watches, and selective retailing activities, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting these businesses. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. with regard to the Company's businesses involve a number of important factors that are subject to change, as are mentioned under "Risk Factors" in the Company's Form 20-F for the year ended December 31, 1999 which is on file with the United States Securities and Exchange Commission." |
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