LVMH: 2018 results
LVMH, the world's leading group of manufacturers in the premium and luxury segments, made a profit of 46.8 billion euros in 2018, which is 10% more than the previous year. Organic revenue growth was 11% and 12% excluding the effects of the closure of concessions at Hong Kong airports at the end of 2017. All business groups showed excellent results.
Comments Bernard Arnault, Chairman and CEO of LVMH: "LVMH had another record year both in terms of revenue and results. In particular, the profit from recurring operations exceeded the mark of 10 billion euros. The demand for our brands, the creativity and quality of our products, the unique experience offered to our customers, as well as the talent and commitment of our teams are the strengths of the Group, which once again changed the situation. In 2019, LVMH will continue to focus on innovation and targeted investments, combining tradition and modernity, long-term vision and responsiveness, entrepreneurial spirit and sense of responsibility. In an environment that remains uncertain, we can count on the attractiveness of our brands and the flexibility of our teams to once again strengthen our leadership in the universe of high-quality products in 2019.
The main achievements of the Group in 2018:
- double-digit increase in revenue and profit from recurring operations that have reached record levels;
- continued growth in Europe, USA, Asia and Japan;
- the success of both iconic and new products at Louis Vuitton, whose profitability remains at an exceptional level;
- a successful first year for Christian Dior Couture in the framework of LVMH;
- creative renovation in several houses;
- strong growth among the leading brands of perfumes and cosmetics;
- a great year for Bvlgari and good development of Hublot and TAG Heuer;
- growth in Sephora, which has strengthened its position in all its markets and in the field of digital technologies;
- agreement with Belmond Group.
The Fashion & Leather Goods business group achieved organic revenue growth of 15% in 2018. The profit from recurring operations increased by 21%.Louis Vuitton demonstrated exceptional performance, which was facilitated by all enterprises and regions. His creative strength lies, in particular, in the iconic leather lines, which are constantly being updated, and in the lines of ready-to-wear and shoes designed by the creative and artistic directors of Louis Vuitton – By Nicholas Ghesquier for women's collections and Virgil Abloh, who joined the LV men's line development team in 2018. The qualitative development of the stores continued very selectively. It is noteworthy that Louis Vuitton is the only brand in the world that has never conducted sales and did not sell through retail outlets.
Christian Dior had a great first full year at LVMH thanks to the work of Maria Grazia Chiuri for women's collections and the appearance of Kim Jones, the new artistic director of Dior Homme.Fendi and Loro Piana continued to apply their know-how in their collections. Celine has entered a new and ambitious stage of its development with the arrival of Edi Slimana as artistic, creative and image director of the brand. His first runway show in October was a global success.Givenchy, Loewe andKenzo also showed excellent results.
The Perfumes & Cosmetics business group achieved organic revenue growth of 14%, driven by the performance of its leading brands. The profit from recurring operations increased by 13%.Parfums Christian Dior has grown significantly and increased its market share in all regions of the world. The strong growth of the House ensured the launch of a new fragranceJoy and the exceptional worldwide success of Sauvage, as well as other iconic fragrances, includingJ’adore and Miss Dior. Guerlainhas grown well thanks to the successful launch of the Abeille Royale line for Rouge G. skin care and lipstick. Benefit has strengthened its leading position in the eyebrow care segment. Givenchy Parfums improved the results of last year thanks to cosmetics and a new fragrance L’interdit, released in memory of Hubert Givenchy who passed away in 2018 and his muse Audrey Hepburn.
The business group Watches & Jewelry recorded organic revenue growth of 12%. The profit from recurring operations increased by 37%. The most successful brand of ugrpe turned out to be Bvlgari, which won a significant market share. His iconic jewelry and watchmaking lines Serpenti, Diva's Dream, B.have seriously gained weight and revenue.Zero1, Lvcea and Octo. Among the novelties of the year, the Octo Finissimo watch and the Fiorever jewelry collection, created around a central diamond, were exceptionally well received. The growth of Chaumet has led to the success of the Liens and Joséphine collections, especially in Asia. An exhibition dedicated to its history at the Mitsubishi Ichigokan Museum in Tokyo was a huge success. In the watch sector TAG Heuer continued to develop its iconic lines and introduced a new version of smart watches. Hublot, which continued its progress, demonstrated steady growth in 2018 and considerable fame as the official timekeeper of the FIFA World Cup.
The business group Selective Retailing achieved organic revenue growth of 6% to 12%, excluding the closure of concessions at Hong Kong airports. Profit from recurring operations increased by 29%.Sephorashowed another year of growth and increased market share. Online sales grew rapidly, especially in North America and Asia. In 2018, the expansion and renewal of the distribution network continued. About a hundred new stores have opened in the world, including a new store Nanjing Road in Shanghai and the first branded stores Sephora in Russia. Le Bon Marché accelerated the development of its loyalty program and opened a new children's department in the last quarter. The closure of the unprofitable concessions of Hong Kong Airport at the end of 2017 contributed to the restoration of profitability.
Photo: from open sources