The Business of Fashion: LVMH Moët Hennessy Louis Vuitton Announces Record 2016 Results

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €37.6 billion in 2016, an increase of 5% over the previous year. Organic revenue growth was 6%.lvmh-moet-hennessy-louis-vuitton

In the fourth quarter, revenue increased by 9% compared to the same period of 2015. Organic growth was 8%. The American market remains on a good track as does Europe. Asia, excluding Japan, continued its good momentum.

Profit from recurring operations reached €7 billion in 2016, an increase of 6%, to which all business groups, apart from selective distribution, contributed. This result compares to 2015 which was itself a year of growth. Operating margin reached 18.7%. Group share of net profit was €3 981 million, representing growth of 11%.

Bernard Arnault, Chairman and CEO of LVMH, said: “LVMH achieved an excellent performance in 2016 within a context of geopolitical and economic instability. Continued innovation, entrepreneurial spirit and the quest for excellence: all Maisons continue to assert these core values while maintaining rigorous execution of their strategies on the ground. In an environment which remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again in 2017, our leadership in the universe of high quality products.

Key highlights from 2016 include:

  • Record revenue and profit from recurring operations
  • Growth in the United States, Europe and Asia
  • Good performance of Wines & Spirits in all regions
  • The success of both iconic and new products at Louis Vuitton, where profitability remains at an exceptional level
  • Progress at Fendi
  • The sale of Donna Karan and the acquisition of Rimowa, a leader in luggage of excellence
  • Good momentum at Parfums Christian Dior driven by successful product innovations
  • Market share gains at Bvlgari and TAG Heuer
  • Growth at Sephora which strengthened its position in all its markets and in digital
  • Free cash flow of €3 974 million, an increase of 8%
  • Gearing of 12% at end of December 2016

WINES & SPIRITS: GOOD YEAR WITH PROGRESS IN THE UNITED STATES AND REBOUND IN SHIPMENTS TO CHINA

The Wines & Spirits Business Group recorded an increase in organic revenue of 7 %. On a reported basis, revenue growth was 5 %. Profit from recurring operations increased by 10 %. With volumes up 3%, solid growth continues for champagne and prestige cuvees performed particularly well. Hennessy cognac enjoyed an excellent year with 10% volume growth. The American market is growing well and China saw better momentum after a tough 2015 due to destocking by distributors. Other spirits, Glenmorangie and Belvedere, continued their growth.

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, Hennessy, Glenmorangie, Ardbeg, Belvedere, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton, Bodega Numanthia and Ao Yun.

FASHION & LEATHER GOODS: GOOD PERFORMANCE OF LOUIS VUITTON, OTHER BRANDS STRENGTHENED THEIR POSITIONS

The Fashion & Leather Goods Business Group recorded organic revenue growth of 4% in 2016. On a reported basis, revenue growth was 3 %. Profit from recurring operations increased by 10%. Louis Vuitton had a good year driven by the level of creativity across all its businesses. The continued success of its iconic product range and the strong demand for recent creations such as the new luggage designed by Marc Newson and the Louis Vuitton fragrances, all contributed to this growth. Fendi recorded robust growth crossing the symbolic revenue threshold of 1 billion euros during the year. Loro Piana continued to expand its distribution network and opened a flagship store in Paris. Céline, Loewe and Kenzo all continued to grow. Marc Jacobs continued to work on changes to its collection. Donna Karan was sold in December to the American G-III group. Rimowa, world leader in luggage of excellence, joined the LVMH group.

Its Fashion and Leather Goods division includes Louis Vuitton, Céline, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana and Rimowa.

PERFUMES & COSMETICS: CONTINUED SUCCESS OF INNOVATIONS; EXCELLENT PERFORMANCE IN MAKEUP

The Perfumes & Cosmetics Business Group recorded organic revenue growth of 8%. On a reported basis, revenue growth was 6%. Profit from recurring operations increased by 5%. The inauguration of the new atelier for the creation of fragrances, Les Fontaines Parfumées, at Grasse was a highlight of the year. Parfums Christian Dior grew market share in all regions, driven by the worldwide success of Sauvage and the vitality of its iconic perfumes J’adore and Miss Dior. The progress of makeup also contributed to the Maison’s excellent performance. Guerlain benefitted from the successful launch of its new makeup collection inspired by its fragrance La Petite Robe Noire. Benefit experienced strong growth driven by the success of its new collection for eyebrows. Make Up For Ever, Fresh and Kat Von D performed well.

LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe as well as other promising cosmetic companies (BeneFit Cosmetics, Make Up For Ever, Acqua di Parma and Fresh).

WATCHES & JEWELRY: MARKET SHARE GAINS FOR BVLGARI AND TAG HEUER

The Watches & Jewelry Business Group recorded organic revenue growth of 5%. On a reported basis, revenue growth was 5%. Profit from recurring operations increased by 6%. Bvlgari continued to gain market share with enhancements to its Serpenti, Diva and B.zero1 lines. Growth continued in China, Korea and in the Middle East. TAG Heuer grew despite a difficult market for watches, gained market share and benefitted from the success of its new collections and its connected watch. Hublot accelerated its development in Asia and recorded the best year in its history. Chaumet continued to move its product lines upmarket and inaugurated a new boutique concept in Hong Kong.

LVMH‘s Watches and Jewelry division comprises Bulgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred, Hublot and De Beers Diamond Jewellers Ltd, a joint venture created with the world’s leading diamond group.

SELECTIVE RETAILING: GOOD PERFORMANCE AT SEPHORA, DFS IMPACTED BY A DIFFICULT TOURISM CONTEXT IN ASIA

The Selective Retailing Business Group recorded organic revenue growth of 8%. On a reported basis, revenue growth was 7%. Profit from recurring operations declined by 2%. Sephora gained market share across all regions and once again recorded double-digit growth in both revenue and profits. More than a hundred stores were opened in 2016 including notably a flagship store in the World Trade Center in New York and major renovations in Boston and Singapore. Its online offer accelerated with the launch in six new countries. DFS continued to face a difficult environment, notably in Hong Kong. The expansion into new destinations continued. The opening of the T Galleria in Angkor in Cambodia and one in Venice, Italy were the highlights of the year.

LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Royal Van Lent and Cheval Blanc hotels.

Key figures:

             
Euro millions    

2015

 

2016

 

% change

Revenue    

35 664

 

37 600

 

+ 5 %

Profit from recurring operations    

6 605

 

7 026

 

+ 6 %

Group share of net profit    

3 573

 

3 981

 

+ 11 %

Free cash flow*    

3 679

 

3 974

 

+ 8 %

Net financial debt    

4 235

 

3 265

 

– 23 %

Total equity    

25 799

 

27 903

 

+ 8 %

* Before available for sale financial assets and investments, transactions relating to equity and financing activities Continue reading

Hennessy launches Prestigious Blend of Paradis Imperial in the States

Hennessy’s Latest Marque Celebrates a Tradition Rich in Elegance and Refinement

Hennessy, the world’s number one selling Cognac, announced the U.S. launch of its newest Cognac, Paradis Imperial. The release of this prestigious and incomparable marque celebrates a 200 year old story steeped in elegance and tradition. The pedigree of Hennessy Paradis Imperial stretches back almost two centuries. In 1818, the Dowager Empress of Russia requested a special blend of very old, gold-colored eaux-de-vie  of the finest quality.  (An eaux-de-vie is a clear brandy distilled from the fermented juice of fruit, such as pears or raspberries. It was first used in 1683 and literally means –in French– water of life,  from a translation of Medieval Latin aqua vitae) In response, Hennessy’s Master Blenders delivered their finest creation, a rare blend of Cognac of rare finesse. Two hundred years later, Hennessy is paying tribute to this first delivery with the release of Paradis Imperial. The bottle is available nationwide with an average price of $2,700.

Hennessy Welcomes Prestigious Blend of Paradis Imperial to the States.  (PRNewsFoto/Hennessy

Hennessy Welcomes Prestigious Blend of Paradis Imperial to the States. (PRNewsFoto/Hennessy

I inherited and blended superior selections of eaux-de-vie that were produced and protected for optimal ageing by previous generations of my family,” says Hennessy Head of Tasting Committee and Master Blender, Yann Fillioux.  “Paradis Imperial is an exceptional offering generations in the making.”

Paradis Imperial boasts a subtle refinement with hints of jasmine, orange blossom and other flowery notes spiced with smoky accents. Only achievable in the rarest of Cognacs, the finish is delicate yet enduring; and the aromas and flavors of Paradis Imperial are where the true elegance of the Cognac is revealed. Paradis Imperial is a blend of the finest eaux-de-vie, singled out immediately after their distillation. These exceptional eaux-de-vie, that represent less than 1% of the eaux-de-vie of a given vintage at the original selection, are between 30 to 130 years-old and are matured with individual care and attention in old casks before being used or poured into “Dames-Jeannes.” After this maturation process, only one out of 1000 eaux-de-vie of a given vintage will become part of the Paradis Imperial blend.

Paradis Imperial is a Cognac unlike any other. It is meant for the knowledgeable consumer who is looking for an elegant blend to entice their palate,” says Rodney Williams, Senior Vice President, Hennessy. “We’re excited to finally make it available to Cognac lovers in the United States.”

Continuing that tradition of luxury and absolute excellence, Hennessy enlisted Stephanie Balini, an award-winning French Baccarat designer, to design the Paradis Imperial bottle.  Since graduating from the prestigious Ecole des Arts Decoratifs, Miss Balini has demonstrated a singular command of luxury while demonstrating a maturity that compels respect. A winner of the Young Designers Award sponsored by the Comite Colbert (an association of French luxury companies), Balini made her name at Baccarat with the “Damoiselles” collection: Eight large, crystal stemmed glasses that illustrate her poetic and precise mastery.

The silhouette of the stunning crystalline glass decanter is the iconic Hennessy shape, with a luxurious crystal cabochon that tops the 18-carat gold and silver collar. Each bottle of Hennessy Paradis Imperial is encased in a luxury gift box and individually numbered, making it the perfect gift for Cognac aficionados.

Hennessy is imported and distributed in the U.S. by Moet Hennessy USA, Inc. and is produced by Jas Hennessy & Co., a subsidiary of LVMH Moet Hennessy Louis Vuitton S.A. The company distills, ages and blends a full range of marques, including Hennessy V.S, Privilege V.S.O.P, Hennessy Black, X.O, Paradis and Richard Hennessy.