LVMH Mo�t Hennessy Louis Vuitton, the world's leading luxury products group, recorded sales of EUR 12 billion in 2003, representing organic growth of 4% over 2002.
Growth accelerated in the fourth quarter as sales grew by 8% over the same period last year on a comparable structure and currency rate basis. This performance is even more notable since the fourth quarter 2002 was itself up strongly over the same period in 2001. Louis Vuitton, in particular, had an outstanding performance, reinforcing its leadership in the luxury market and recording double digit organic growth for the quarter, yet again, over a 2002 period which had seen strong growth over 2001. LVMH increased its lead over competitors in the sector, with operating income growth of around 7%, a unique achievement in the luxury sector in 2003.
Wines & Spirits continued its good performance in the fourth quarter. On a comparable structure basis, both champagne and cognac sales volumes grew during the year. The performance of the major Champagne brands was particularly strong in the UK and Japan. Sales of cognac held up well throughout the year in both the US and the Asian markets, notably in China and Taiwan. The X.O quality category of cognac grew strongly over the fourth quarter. Hennessy has just launched a new premium range cognac Ellipse.
Fashion & Leather Goods recorded double digit organic fourth quarter sales growth over the same period in 2002, itself a period of strong growth.
For the year, Louis Vuitton achieved double digit organic sales growth and increased its market leadership. The brand benefited from extremely strong demand from its local customers throughout the year, notably in the US where the performance has been exceptional. The extraordinary success of new product lines and the opening of an innovative new boutique in Tokyo contributed to strong progress in the final quarter. Existing monthly sales records were smashed in December with several weeks registering over EUR 100 million in turnover and organic sales growth in the quarter of 17%.
Sales at Fendi continued to grow during the quarter as its store network was upgraded. The year was notable for the emergence of several brands which developed strongly including Marc Jacobs and Pucci both of which have great potential.
Perfumes & Cosmetics recorded fourth quarter organic growth of 9% after successful launches of L'Instant by Guerlain, Very Irresistible by Givenchy and Kenzo Air by Parfums Kenzo had a very positive effect on sales. The growth of Christian Dior increased over the quarter thanks to the great success of its new cosmetics and skincare products, but also due to the continued strong performance worldwide of its fragrance J'adore. BeneFit, which has just launched its first fragrance, recorded strong growth in 2003.
The Watches & Jewelry business group confirmed its return to growth which began during the summer. TAG Heuer, Montres Christian Dior and Chaumet all realized double digit sales increases on a constant exchange rate basis over the period.
DFS returned to growth in the fourth quarter, having been affected over the previous nine months by the drop in global tourism. Active management initiatives and a dynamic productivity improvement program enabled DFS to be slightly profitable in 2003.
The sales growth at Sephora in Europe and the efficiency of its management resulted in an improvement in its operating margin. In the US, Sephora recorded the third consecutive year of double-digit sales increases in dollars on a comparable store basis. As predicted, the brand was profitable in the US in 2003.
Overall, the Group's operating income grew by around 7% in 2003 over an already strong growth year in 2002. The Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics and Selective Distribution business groups all grew at the operating income level. This outstanding performance, particularly remarkable in the difficult environment of 2003, is unique in the luxury goods sector.
In an economic and monetary environment which should remain challenging, LVMH maintains its long-term strategy based on creativity and product quality. The Group will continue to focus on its star brands and improving profitability.
Due to its unique portfolio of brands and talented teams, LVMH has the ability and resources which should allow it to successfully address in 2004, as it did in 2003, the challenges of the economic environment. The Group has once again set the objective of achieving a tangible increase in operating income. LVMH should thus continue to increase its market share and extend its leadership in the global luxury sector.