LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded a revenue of 37.6 billion Euros in 2016, an increase of 5% over the previous year. Organic revenue growth was 6%.
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%.
The Watches & Jewelry business group recorded an 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.
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.
The Fashion & Leather Goods business group recorded an 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 a 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.
The Perfumes & Cosmetics business group recorded an 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 a strong growth driven by the success of its new collection for eyebrows. Make Up For Ever, Fresh and Kat Von D performed well.
The Selective Retailing business group recorded an 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 a 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.
Despite a climate of geopolitical and currency uncertainties, LVMH is well-equipped to continue its growth momentum across all business groups in 2017. The Group will maintain a strategy focused on developing its brands by continuing to build on strong innovation and a constant quest for quality in their products and their distribution.
Driven by the agility of its teams, their entrepreneurial spirit, the balance of its different businesses and geographic diversity, LVMH enters 2017 with caution but has, once again, set an objective of increasing its global leadership position in luxury goods.
February 16, 2017