Excellent performance of LVMH in 2014
Record Revenue and Net Profit
LVMH, Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €30.6 billion in 2014, an increase of 6% over the previous year. Organic revenue growth was 5%. Revenue in all business groups increased with the exception of Wines & Spirits which continued to be affected by the destocking of distributors in China. The Group maintained strong momentum in the United States. Europe demonstrated good resilience despite the economic environment, while Asian countries displayed mixed trends. In the fourth quarter, revenue increased by 10% compared to the same period of 2013. Organic growth was 5%.
Profit from recurring operations reached €5 715 million, resulting in an operating margin of 19%. Group share of net profit was €5 648 million. Bernard Arnault, Chairman and CEO of LVMH, said: «The 2014 results confirm the capacity for LVMH to progress despite economic and currency uncertainty. Revenue and net profit reached new record levels. Commitment to excellence, a passion for quality and our capacity to innovate underpin our growth momentum and are all values epitomised by the Fondation Louis Vuitton and its emblematic building inaugurated in October 2014. The year was also marked by the arrival in the Group of Loro Piana, which saw a good performance. LVMH reached an agreement with Hermès and disposed of its stake in this company, in the form of a distribution to our shareholders. In 2014, all our Maisons demonstrated outstanding flexibility. By adapting their strategies to global changes and by continuing to evolve, they have shown the creativity and entrepreneurship that drive them forward. In an uncertain economic environment, we can rely on the desirability of our brands and the agility of our teams to further strengthen our leadership in the world of high quality products».
The Wines & Spirits business group recorded a decrease in organic revenue of 3% in 2014. Profit from recurring operations reached €1 147 million. This situation is essentially explained by the evolution of cognac in China linked to the continued destocking by distributors. Against this background, Hennessy leveraged its extensive portfolio and global presence, in particular in the United States, where its growth remains strong. Other spirits, Glenmorangie and Belvedere continue their development. The champagne business performed well, driven in particular by its prestige vintages. The American and Asian markets benefited from strong demand.
The Fashion & Leather Goods business group recorded organic revenue growth of 3% in 2014. Profit from recurring operations reached €3 189 million. For Louis Vuitton, 2014 was characterised by strong creative momentum, dominated by the enthusiastic reception of Nicolas Ghesquière’s first runway shows and of the new products. The celebration of the Monogram canvas as revisited by six leading designers and the inauguration of the Avenue Montaigne flagship store in Paris are among the highlights of the last quarter. 2014 marks the first year of Loro Piana’s integration into the business group. Fendi experienced strong growth driven by the success of its iconic lines. Celine continued its remarkable performance. Other fashion brands such as Givenchy, Kenzo and Berluti experienced accelerated growth while Donna Karan and Marc Jacobs are in a redeployment phase.
The Perfumes & Cosmetics business group significantly outperformed the market with organic revenue growth of 7%. Profit from recurring operations amounted to €415 million. The business group’s momentum was boosted by continuous innovation and sustained investments. Iconic perfumes of Christian Dior, J’adore, Miss Dior and Dior Homme continued to demonstrate their exceptional appeal. The make-up segment also contributed to the good performance of the Maison, notably thanks to Dior Addict Fluid Stick. Guerlain benefited from the successful launch of its new fragrance L’Homme Idéal and the success of its high-end skincare range Abeille Royale. Benefit confirmed its strong global momentum and is ranked as the leading make-up brand in the UK. Fresh and Make Up For Ever continued to strengthen their positions.
The Watches & Jewelry business group recorded organic revenue of of 4%. Profit from recurring operations reached €283 million. While jewelry revenue showed remarkable momentum, watches were penalized by the cautious purchasing behaviour of multi-brand retailers in an uncertain economic environment. Bvlgari recorded strong growth driven by the success of its iconic lines and enhanced its watch collections with its new Lvcea watch for women. TAG Heuer refocused on its core offering, adapting its organization accordingly. While maintaining tight control, the Maisons continued to selectively invest in their distribution network and production capacity.
The Selective Retailing business group recorded organic revenue growth of 8%. Profit from recurring operations reached €882 million in 2014. Sephora had an exceptional year and continued to gain market share. Performance was excellent especially in North America, the Middle East and Asia. Online sales grew significantly, supported by innovative mobile features. The store network expansion continued: the company established a new presence in Indonesia and Australia while several flagship stores, such as the Champs-Elysées and Dubai Mall, have been renovated. New brands enhanced the product offering, bringing a diversity that never ceases to keep Sephora ahead in beauty innovation.