News The group LVMH Moët Hennessy Louis Vuitton last year recorded an operating profit of 1.560 billion euros (- 20.4 %) on turnover of 12.23 billion (+ 5.6 %). This limited decline in operating profit bears testimony to the group's resistance to the difficult economic climate affecting the world luxury market in 2001. Net profit fell to 10 million euros, compared to 722 million in 2000, on account of wholly exceptional restructuring provisions, in particular for the selective distribution sector.
For the Watches and Jewellery group, operating profit fell to 27 million euros compared to 59 million in 2000 (- 54.2 %) on sales of 539 million euros, down by 12.2 %.
According to an LVMH press release, "the Watches and Jewellery group devoted the year 2001 to optimising its portfolio of prestigious brands, determining their strategies and structuring its international distribution network. The decision to pull out of certain manufacturing and distribution activities on behalf of brands outside the group and the slowdown of the American market adversely affected operating profit. LVMH brands made progress in all regions with the exception of the United States and increased their market shares in many countries. The activities group continued the development in Switzerland of its watchmaking production capacities for its own brands and for Louis Vuitton, whose first collection of watches will be launched at the end of 2002. TAG Heuer successfully opened a new retail outlet in London and confirmed its up-market progression, particularly with mechanical watches. Christian Dior, Ebel, Zenith and Chaumet are developing their international presence."
For the current year, LVMH is targeting a significant increase in operating profit. To do this, the group will focus its efforts on the growth of luxury products and more particularly on the development of its largest brands. Thanks in particular to measures that were implemented and financed in 2001 to overcome the difficult economic situation, LVMH feels it is well placed to tackle the year 2002 and benefit fully from a possible recovery in the markets. As has been the case during previous crises, the geographical distribution of its activities, as well as the strength and comple-mentarity of its brands, should enable it to continue its development and win market share. Sales for the first two months of the year have moreover confirmed the success of the group's products, showing a 9 % increase compared to the same period last year, when growth in activity was already strong (+ 13 %).
March 28, 2002
