News The financial year 2000 was highly successful for the Louis Vuitton Moet Hennessy (LVMH) luxury group. The watchmaking business made a substantial contribution.
Last year, LVMH reported a 4% higher net profit at 722 million euros (1.11 billion francs). The French luxury giant points out that the 160% leap in the 1999 result was explained by “exceptional factors bound up, in particular, with the sale of some Diageo shares.” Compared with 1998 performance, the net profit for 2000 therefore represents an increase of 170%.
The operating result rose 27% to 1.96 billion euros, while sales were 35% up at 11.6 billion euros (17.8 billion francs). LVMH underlines, in particular, the steep increase in its operating profitability, well above the forecasts announced at the beginning of the year (+20%) and the revaluation made in September (+25%). The 2000 operating margin represented 17% of sales. The recurring net result stood at 846 million, up 15% (+61% on 1998).
By business area, the operating result rose 9% on 1999 to 716 million euros for wines and spirits, by 41% to 1.169 billion in fashion and leatherware and 26% to 184 million in fragrances and cosmetics. The operating result reported for watches and jewellery for its part stood at 59 million euros (90.5 million francs) against 5 million in 1999 while the group continued to record a loss of 2 million in selective distribution. The watchmaking business of LVMH consists in particular of Ebel, Zenith and TAG Heuer.
For 2001, LVMH has set itself the target of two-figure growth of its sales and operating result. The Group indicates that priority will be given to organic growth and brand development.
In the first two months of 2001, sales of the world number one in the luxury business rose 13%, following 35% growth in the first two months of 2000.
“The year 2000 confirmed the strength of the group brands, its continued high financial performance and its ability to ensure sustainable growth”, is the group’s conclusion.
March 14, 2001
