LVMH, Moët Hennessy Louis Vuitton, said its profit for 2005 totaled $3.3 billion, a 16 percent increase over the previous year. Revenue for the year rose 11 percent to $16.8 billion.
The world’s leading luxury products group attributed the performance to strong growth in all business groups and geographic regions, adding that the increase “is more noteworthy in view of the continued high negative impact caused by exchange rates in 2005.” At constant exchange rates, the group’s profit from recurring operations would have increased by 22 percent.
The Paris-based company’s share of net profit increased by 21 percent compared to 2004, which was also a year of very strong growth. It attributed the increase to improved operating profitability and the reduction in financial expenses brought about by decreased levels of debt.
The Watches & Jewelry business division recorded a five-fold increase in profit to $45.6 million based on the success of the iconic lines and strong innovation, LVMH said.
TAG Heuer “confirmed its status as a star brand,” the company said. Its new 2005 products within the Aquaracer, Link, and Carrera ranges and the golf watch designed with Tiger Woods recorded “exceptional” sales. Zenith made a significant breakthrough into the high-end watch-making market with Starissime, the first female Tourbillon, and Dior Watches achieved “enormous success” with its Christal line. Chaumet showed strong development in Europe and Asia, in both jewelry and watches.
The fashion and leather goods division, lead by flagship brand Louis Vuitton, recorded a profit from continuing operations of $1.55 billion in 2005, up 12 percent from the previous year.
Wine and spirits’ profit from continuing operations rose 7 percent to $1 billion in 2005.
The selective retailing division saw its profit from continuing operations rise 46 percent to $414 million for 2005.
Perfumes and cosmetics’ profit grew 15 percent to $206 million.
“LVMH has once again confirmed the strength of its business model, which is built on creativity and quality,” said Bernard Arnault, chairman and CEO of LVMH. “The financial performance of the group in 2005 shows the effectiveness of a development strategy based on an exceptional portfolio of brands and on the complementary nature and successful geographic balance of its activities. It has enabled LVMH to once again strengthen its position as global leader and to export worldwide its French and European manufactured products. With all these elements in place, 2006 will be another year of strong growth.”
LVMH said it has set itself an objective of a very significant growth for 2006.