presentation hy 19 - va › uploads › 2019 › 05 › presentation...wines & spirits first...

2019

JULY 24, 2019

FIRST HALF

RESULTSLo

uis

Vuitt

on

2DISCLAIMER

This document may contain certain forward looking statements which are based on estimations and forecasts. By their nature, these forwardlooking statements are subject to important risks and uncertainties and factors beyond our control or ability to predict, in particular thosedescribed in LVMH’s Reference Document which is available on the website (www.lvmh.com). These forward looking statements should not beconsidered as a guarantee of future performance, the actual results could differ materially from those expressed or implied by them. Theforward looking statements only reflect LVMH’s views as of the date of this document, and LVMH does not undertake to revise or update theseforward looking statements. The forward looking statements should be used with caution and circumspection and in no event can LVMH andits Management be held responsible for any investment or other decision based upon such statements. The information in this document doesnot constitute an offer to sell or an invitation to buy shares in LVMH or an invitation or inducement to engage in any other investment activities.

3FIRST HALF 2019 RESULTS

FOR LVMHEXCELLENT FIRST HALF

| Another double-digit increase in revenue and profit from recurring operations

| Strong growth in Asia, the United States and Europe, especially in France which saw a rebound in Q2

| Good start to the year for Wines & Spirits

| Remarkable momentum at Louis Vuitton; profitability remains at exceptional level

| Remarkable performance at Christian Dior Couture

| Rapid growth for iconic LVMH Perfume & Cosmetics brands

| Rapid progress in Jewelry, especially for Bvlgari

| Strong growth of offline and online sales at Sephora

| Solid development of DFS, especially in Europe, which benefits from the rise of international travelers

| Completed acquisition of Belmond hotel group in April; activity to be consolidated in Q3 2019

BUSINESS GROUPSREVIEW

Loui

s Vu

itton

WINES & SPIRITS

FIRST HALF 2019 RESULTS

Dom

Pér

igno

n


903

960

1368

1526

KEY FIGURESWINES & SPIRITS

In millions of euros

• REVENUE

Organic growth

H1 2019

H1 2018

H1 2019*

H1 2018

+ 6%

2 486

2 271

+ 6%

772

726

• PROFIT FROM RECURRING OPERATIONS

+ 9%

Champagne and Wines Cognac and Spirits

197

214

529

558

* Incorporating for the first time the effects of the application of IFRS 16 Leases


H1 2019 HIGHLIGHTSWINES & SPIRITS

Strong momentum in China and the US; improved mix for Champagne and solid volume growth for Cognac

| CHAMPAGNE & WINES• Champagne: volumes -1 % • Good revenue growth in all regions• Excellent performance of prestige cuvées, Dom Pérignon in particular• Performance of Estates & Wines mainly driven by pricing actions

| COGNAC & SPIRITS• Hennessy: volumes +8 % driven by VS and VSOP qualities• Sustained growth in the US and China • Impact of new marketing campaign directed by Sir Ridley Scott• Reinforced development of Glenmorangie and Belvedere in high-end products


2019 OUTLOOKWINES & SPIRITS

| Maintain value creation strategy in an uncertain business environment

| Product innovations, new ways to consume and online communication to win over new consumers

| Integrate a new category of wines, high-end rosé, with the acquisition of Château du Galoupet

| Intensify consideration of the environment in our development, especially through sustainable viticulture

| Develop production facilities to support future growth

FASHION & LEATHER

GOODS

Chris

tian

Dio

r Co

utur

e



KEY FIGURESFASHION & LEATHER GOODS

• REVENUE

Organic growth

H1 2019

H1 2019*

H1 2018

+ 18%

10 425

8 594

3 248

2 775


H1 2018

+ 17%

+ 21%




| Louis Vuitton: excellent momentum, combining modernity and desirability• Success of iconic lines and new designs • Qualitative transformation of store network • New leather goods workshop in France to meet growing demand

| Christian Dior Couture: exceptional growth in all product categories • Strong demand from all clientele • Successful launch of 30 Montaigne line• Great success of exhibitions in London and Dallas

| Fendi: tribute to Karl Lagerfeld through several events in Shanghai, Paris and Rome

| Loro Piana: new personalized service for shoes and temporary shop in New York

| Celine: arrival in stores of Hedi Slimane’s new collections

| Loewe: great success of new collections

| Rimowa and Berluti: further growth and development of store network

| Launch of new fashion house Fenty created by Rihanna

H1 2019 HIGHLIGHTSFASHION & LEATHER GOODS


2019 OUTLOOK

| Maintain strong creative momentum at Louis Vuitton• Continue innovation in all product categories supported by high profile events• Qualitative development of store network• Further expansion of production capacity

| Christian Dior Couture: new store on Avenue des Champs-Elysées while the historic store on Avenue Montaigne undergoes major renovation

| Fendi: new partnerships with the world of art and music

| Kenzo: new artistic director

| Agreement with Maison Stella McCartney

| Continue to reinforce creative talent and to invest in the other brands

FASHION & LEATHER GOODS

PERFUMES & COSMETICS

Parf

ums

Chris

tian

Dio

r



KEY FIGURESPERFUMES & COSMETICS

• REVENUE

Organic growth

H1 2019

H1 2019*

H1 2018

+ 9%

3 236

2 877

387

364


H1 2018

+ 6%

+ 12%




H1 2019 HIGHLIGHTS

| Parfums Christian Dior: excellent momentum• Vitality of perfumes J’Adore, Miss Dior and Sauvage• Continued success of Rouge Dior lipstick and its Ultra-Rouge version• Sustained growth of skincare line Prestige, especially in Asia

| Guerlain: strong growth of lipstick line Rouge G and skincare line Abeille Royale

| Givenchy: success of makeup in Asia, especially China, and of fragrance L’Interdit

| Benefit: continued development of Eyebrow Collection with Gimme Brow and Precisely; international expansion of brow bars, particularly in China

| Fresh: success of iconic lines Rose, Black Tea and Lotus

| Fenty Beauty by Rihanna: strong impact of communication on social media

| Maison Francis Kurkdjian: launch of two fragrance variations for Gentle Fluidity



2019 OUTLOOK

| Strong innovative and creative momentum in a rapidly changing environment

| Parfums Christian Dior: support of iconic and new products in line with Couture and its roots in Grasse • Several innovations in makeup and strong digital activation • Roll-out of concept store Maison Christian Dior in all regions• Continued focus on premium skincare

| Guerlain: relaunch of Mon Guerlain fragrance

| Givenchy: relaunch of iconic Le Rouge lipstick and new version of L’Interdit fragrance

| Kenzo: launch of new eau de parfum in Kenzo World range

| Acqua di Parma: new fragrance and interior candle lines, renovation of iconic store in Milan


WATCHES & JEWELRY

Bvlg

ari



KEY FIGURESWATCHES & JEWELRY

• REVENUE

Organic growth

H1 2019

H1 2019*

H1 2018

+ 4%

2 135

1 978

357

342


H1 2018

+ 5%

+ 8%




H1 2019 HIGHLIGHTS

| Rapid progress in Jewelry, especially in directly operated stores; growth of Hublot and continued repositioning of TAG Heuer

| Bvlgari: good momentum and market share gains• Success of iconic lines Serpenti, B.Zero1, Diva, Lvcea and Fiorever• Monaco boutique renovated and new temporary stores in Paris and Macao

| TAG Heuer: developed iconic lines Carrera, Aquaracer and Formula 1; success of Golf connected watch; celebrated 50th anniversary of Monaco

| Hublot: solid growth driven by Classic Fusion and Big Bang lines, and by remarkable development of Spirit of Big Bang

| Chaumet: success of Bee My Love collection and iconic lines Liens and Joséphine; temporary store during renovation of historic place Vendôme location

WATCHES & JEWELRY


2019 OUTLOOK

| Continue programs dedicated to enhancing quality and productivity of distribution

| Target and strengthen marketing investments, in particular online

| Bvlgari: roll-out of new high jewelry collection Cinemagia; new exhibition at Sant'Angelo Castle in Rome

| Open flagship stores on « 1881 Heritage » site in Hong Kong for Chaumet and Hublot

| Increase presence in China for Zenith and Fred

| Preparation of first exhibition of LVMH’s Swiss watchmaking Maisons, scheduled in January 2020 at Bvlgari Resort Dubai

WATCHES & JEWELRY

SELECTIVE DISTRIBUTION

DFS



KEY FIGURESSELECTIVE RETAILING

• REVENUE

Organic growth

H1 2019

H1 2019*

H1 2018

+ 8%

7 098

6 325

714

612


H1 2018

+ 17%

+ 12%




H1 2019 HIGHLIGHTS

| SEPHORA• Strong growth in revenue and market share gains in all regions• Rapid progress of online sales • Continued store network expansion; innovative renovation of stores in La Défense (Paris) and Times Square (New York)• New communication « We belong to something beautiful » rolled-out in the US

| DFS• Demand still strong in Hong Kong and Macao despite a slowdown in recent months• Excellent performance of Venice Galleria in Italy• Logistics agreement with Chinese company Shenzhen Duty Free • « Mini-programs » on WeChat to better engage travelers

| LE BON MARCHÉ• Opening of « salons particuliers » for a personalized shopping service• 24 Sèvres digital platform renamed 24S

SELECTIVE RETAILING


2019 OUTLOOKSELECTIVE RETAILING

| SEPHORA• Continue geographic expansion and market share gains • Open first stores in South Korea, Hong-Kong and New Zealand • Innovation in products and develop exclusive services

| DFS• Complete renovations of iconic flagship stores in Hong Kong and Macao, and at San Francisco International Airport • Open a beauty store in Hong Kong in Mong Kok district• Prepare opening of Galleria in Paris at La Samaritaine scheduled for 2020

| LE BON MARCHÉ• Ongoing transformation of main store’s ground floor• Organize punk-themed exhibition in autumn

CONSOLIDATEDKEY FIGURES

H1 2019Lo

uis

Vuitt

on


IFRS 16 STANDARD RELATED TO LEASES

|Applied to leases involving fixed payments, mostly related to boutiques at LVMH

|Financial statements not restated as of December 31 and June 30, 2018, in accordance with the standard

|Negligible impact on net result • Impact on profit from recurring operations: + €77 million, mainly on Selective distribution and Fashion & Leather Goods• Impact on financial result: - €145 million (interest on lease liabilities)• Impact on result before tax: - €68 million

| Impact on balance sheet: +€12 billion • As a liability: recognition of a lease liability, measured at the discounted present value of future payments• As an asset: right-of-use asset depreciated over the lease term• Impact not significant on shareholders’ equity

|No impact on cash flow statement other than its presentation

APPLIED SINCE JANUARY 1st, 2019


H1 2019 REVENUE BY BUSINESS GROUP

H1 2018 H1 2019 Reported growth

Organic growth*

WINES & SPIRITS 2 271 2 486 + 9% + 6%

FASHION & LEATHER GOODS 8 594 10 425 + 21% + 18%

PERFUMES & COSMETICS 2 877 3 236 + 12% + 9%

WATCHES & JEWELRY 1 978 2 135 + 8% + 4%

SELECTIVE RETAILING 6 325 7 098 + 12% +8%

OTHERS & ELIMINATIONS (295) (298) - -

TOTAL LVMH 21 750 25 082 + 15% + 12%


* With comparable structure and exchange rates. The exchange rate impact for the Group is +3%.


REVENUE EVOLUTION BY BUSINESS GROUP

Q1 2019 Q2 2019 H1 2019

WINES & SPIRITS + 9% + 4% + 6%

FASHION & LEATHER GOODS + 15% + 20% + 18%

PERFUMES & COSMETICS + 9% + 10% + 9%

WATCHES & JEWELRY + 4% + 4% + 4%

SELECTIVE RETAILING + 8% + 7% + 8%

TOTAL LVMH + 11% + 12% + 12%

Organic growthversus same period of 2018


H1 2019 REVENUE BREAKDOWN BY REGION

23%UNITED STATES

(inc. Hawaii)

9%

FRANCE 7%

JAPAN

17%EUROPE

(excl. France)

11%

OTHER MARKETS

33%

ASIA (excl. Japan)

In % of total revenue


REVENUE EVOLUTIONBY REGION

Q1 2019 Q2 2019 H1 2019

UNITED STATES* + 8% + 8% + 8%

JAPAN + 9% + 11% + 10%

ASIA (EXCL. JAPAN) + 17% + 18% + 18%

EUROPE + 7% + 13% + 10%

Organic growthversus same period of 2018

* Excl. Hawaii.


INCOME STATEMENTSUMMARIZED

H1 2018 H1 2019* % Change

REVENUE 21 750 25 082 + 15%

GROSS MARGIN 14 620 16 635 + 14%Marketing and selling expenses (8 305) (9 563) + 15%General and administrative expenses (1 679) (1 789) + 7%Equity investment income 12 12PROFIT FROM RECURRING OPERATIONS 4 648 5 295 + 14%Other operating income and expenses (70) (54)OPERATING PROFIT 4 578 5 241 + 14%Net financial income (expense) (22) (205)Income taxes (1 264) (1 431)

NET PROFIT BEFORE MINORITY INTERESTS 3 292 3 605 + 10%

Minority interests (288) (337)

GROUP SHARE OF NET PROFIT 3 004 3 268 + 9%


* Incorporating for the first time the effects of the application of IFRS 16 Leases.


H1 2018 H1 2019* % Change

WINES & SPIRITS 726 772 + 6%

FASHION & LEATHER GOODS 2 775 3 248 + 17%

PERFUMES & COSMETICS 364 387 + 6%

WATCHES & JEWELRY 342 357 + 5%

SELECTIVE RETAILING 612 714 + 17%

OTHERS AND ELIMINATIONS (171) (183) ns

TOTAL LVMH 4 648 5 295 + 14%

PROFIT FROM RECURRING OPERATIONS BY BUSINESS GROUP




INCREASE IN PROFIT FROM RECURRING OPERATIONS

4 648

5 295

Currency effect

+ 3

H12019*

Organic

+ 644

H1 2018




CHANGE IN NET FINANCIAL INCOME (EXPENSE)

H1 2018 H1 2019* Change (M€)

COST OF NET FINANCIAL DEBT (56) (51) + 5

INTEREST ON LEASE LIABILITIES - (145) n.a.

COST OF CURRENCY DERIVATIVES (68) (102) - 34

FAIR VALUE ADJUSTMENT OF AVAILABLE FOR SALE FINANCIAL ASSETS 95 101 + 6

OTHER ITEMS - NET 7 (8) - 15

NET FINANCIAL INCOME (EXPENSE) (22) (205) - 183




SOUND FINANCIAL STRUCTURE

LIABILITIES

90.9 90.9

ASSETS

73%39%

38%

23%15%

12%


In billions of euros

Non current assets

InventoriesOther current

assets

Total equity

Current liabilities

Non current liabilities

June 30, 2019*

Changes versus December 31, 2018

|Effect of first application of IFRS16• Right-of-use assets accounted for under assets • Leases liabilities under liabilities

| Increase in intangible and tangible fixed assets due to consolidation of Belmond and revaluation of purchase commitments for minority interests

| Increased inventories resulting from growth in the Group’s businesses

| Increased total equity primarily linked to strong results

| Increase of net debt mainly due to Belmond acquisition


H1 2018 H1 2019* Change (M€)

CASH FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL 5 464 7 399 + 1 935

Cost of net financial debt: interest paid (73) (37) + 36Lease liabilities: interest paid - (109) - 109Tax paid (907) (1 191) - 284Change in working capital (1 323) (1 873) - 550

NET CASH FROM OPERATING ACTIVITIES 3 161 4 189 + 1 028

Operating investments (1 204) (1 423) - 219Repayment of lease liabilities - (1 071) - 1 071

OPERATING FREE CASH FLOW** 1 957 1 695 - 262

ANALYSIS OF CASH FLOW FROM OPERATIONS


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

An interim dividend of €2.20 per share to be paid on December 10th, 2019.



NET FINANCIAL DEBT

4 235

5 303

3 2443 850

7 153 7 359

5 487

8 684

16%20%

12% 14%

24% 23%16%

25%

31/12/2015 30/06/2016 31/12/2016 30/06/2017 31/12/2017 30/06/2018 31/12/2018 30/06/2019

Net financial dabt Gearing



*

CONCLUSION

Loui

s Vu

itton


FOR 2019 SECOND HALFCAUTIOUSLY CONFIDENT

| Despite buoyant demand, vigilance maintained in an uncertain geopolitical context

| Continue creative momentum of brands, combining tradition and modernity, excellence and responsibility

| Enriching experience offered to our customers in our stores and online

| Emphasis on entrepreneurial spirit • Agility of our organization• Commitment and involvement of our teams

Objective of LVMH

REINFORCE OUR LEADERSHIP POSITION IN GLOBAL LUXURY GOODS MARKET

presentation hy 19 - va › uploads › 2019 › 05 › presentation...wines & spirits first...

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