LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, reported that 2004 profit grew 40% reaching $1.35 billion.
Operating income grew by 11% to $3.23 billion on sales of just under $17 billion, a 6% increase from 2003.
All business groups contributed to the performance, which the company said was achieved in a difficult currency environment during 2004. At constant exchange rates, the annual growth in operating income would have been 24%.
Net income before goodwill amortization increased by 26% compared to 2003. This improvement is primarily due to lower financial expenses following further debt reduction.
The watches & jewelry business group recorded a notable turnaround in 2004, the company said, returning to profitability. The business segment earned 13 million Euros, compared to 48 million Euro loss in 2003.
All brands recorded better sales growth than their respective markets, the company said. “TAG Heuer confirmed its position as one of the Group’s star brands and achieved strong growth in both sales and profitability. Growth has been particularly remarkable in the U.S. and Asia,” the company said. Zenith confirmed its position as a premium watchmaker and Chaumet continued to grow in Asia and Europe. The success of Chiffre Rouge and of Dior watches in general, ‘is another highlight of 2004.”
Highlights of 2004 include:
•?Continued organic growth of the Group’s leading brands, especially Louis Vuitton, Moët & Chandon, Hennessy, Veuve Clicquot, Parfums Christian Dior and TAG Heuer.
•? Growth in market share across all Group operations.
•? Operating margin of 19%, an improvement over 2003.
•? Exceptional margin levels at Louis Vuitton which recorded remarkable sales increases, notably in the US and Asia’
•? Improved profitability in Selective Retailing.
•?Increased cash flow from operations for the fourth consecutive year for a total of 2.1 billion Euros.
Initial indications for 2005 confirm the growth trends experienced in 2004, the company said. The Group achieved organic sales growth of 12 % over the first two months of the year. Louis Vuitton recorded an excellent start to the year and continues double-digit sales growth.
The Group’s performance in 2004, in a difficult currency environment, underlines the efficiency of its growth model based on the development of a unique portfolio of brands. “After an excellent 2004, LVMH is well positioned for 2005,” the company said.
“The geographic balance of its activities, the strength and complimentarity of its brands along with the exceptional talent of its teams, will allow the Group to gain market share and further strengthen its lead in the global luxury goods market,” the company said.