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LVMH: FY17 revenues rise 13 percent, group profit jumps 29 percent

By Prachi Singh

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Business

LVMH Moët Hennessy Louis Vuitton reported revenue of 42.6 billion euros (52.9 billion dollars) in 2017, an increase of 13 percent over the previous year, while organic revenue growth was 12 percent. With organic revenue growth of 11 percent, LVMH said, the trend seen since the beginning of the year continued into the fourth quarter. Profit from recurring operations reached 8, 293 million euros (10,304 million dollars) in 2017, an increase of 18 percent, while operating margin reached 19.5 percent. Group share of net profit was 5, 129 million euros (6,373 million dollars), representing growth of 29 percent.

Commenting on the company’s full year performance, Bernard Arnault, Chairman and CEO of LVMH, said in a statement: “The excellent performance, to which all our businesses contributed, is due in part to the buoyant environment but above all to the remarkable creative strength of our brands and their ability to constantly reinvent themselves. In an environment that remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again in 2018, our leadership in the universe of high quality products.”

Fashion and leather goods segment sales grow 13 percent

The fashion and leather goods business of the LVMH Group achieved organic revenue growth of 13 percent in 2017 and on a reported basis, revenue growth was up 21 percent, while profit from recurring operations increased by 27 percent. Louis Vuitton continued to grow benefitting from new products arising from the collaborations with the artist Jeff Koons as well as the Supreme brand, the launch of the brand’s first smart watch and the inauguration of the Maison Louis Vuitton Vendôme in Paris. Christian Dior Couture, whose business became fully consolidated within the group in the second half, also reported positive growth. Also Fendi continued to grow strongly and Loro Piana, Céline, Loewe, Kenzo and Berluti made good progress. Marc Jacobs strengthened its product offering and continued its restructuring and Rimowa completed its first year within the LVMH Group.

Perfumes and cosmetics business group recorded organic revenue growth of 14 percent, while on a reported basis, revenue growth was 12 percent and profit from recurring operations increased by 9 percent. Parfums Christian Dior grew market share in all regions, driven by the success of its fragrance Sauvage and the vitality of its iconic perfumes J’adore and Miss Dior. The makeup segment grew driven by the Rouge Dior and Dior Addict lines. Guerlain benefited from the successful launch of Mon Guerlain and the international roll-out of Guerlain Parfumeur boutiques. Parfums Givenchy had a very good year as well as Benefit, which reinforced its Brow Collection. Fenty Beauty by Rihanna, launched worldwide at Sephora, the company added, is enjoying success.

Watches and jewellery business group recorded organic revenue growth of 12 percent, while on a reported basis, revenue growth was 10 percent and profit from recurring operations increased by 12 percent. Bvlgari continued to gain market share with its iconic lines Serpenti, B.Zero1, Diva and Octo. Growth was particularly strong in Asia, the United States and Europe. The company said, inaugurations of the new manufacturing facility in Valenza and the flagship store on Fifth Avenue in New York are among the major events of the year. The success of the Liens and Joséphine collections drove Chaumet’s growth. In the watch sector, TAG Heuer and Hublot continued to grow.

The selective retailing business group recorded organic revenue growth of 13 percent, while on a reported basis, revenue growth was 11 percent and profit from recurring operations was up 17 percent. Sephora continued to gain market share. Its growth was particularly strong in North America and Asia. A new territory, Germany, was inaugurated, while Sephora expanded its online presence in Scandinavia, Mexico and the Middle East. Le Bon Marché launched its digital platform, 24 Sèvres. The year 2017 was a positive turning point for DFS, with new stores in Cambodia and Italy continued to grow.

LVMH cautiously confident for 2018

LVMH added that in an environment that remains supportive at the beginning of the year and despite unfavourable currencies and geopolitical uncertainties, LVMH is well-equipped to continue its growth momentum across all business groups in 2018. Driven by the agility of its teams, their entrepreneurial spirit, the balance of its different businesses and geographic diversity, LVMH, said that the companu enters 2018 with cautious confidence.

At the annual shareholders’ meeting on April 12, 2018, LVMH aims to propose a dividend of 5 euros (6 dollars) per share, an increase of 25 percent. An interim dividend of 1.60 euros (1.99 dollars) per share was paid on December 7 of last year and the balance of 3.40 euros (4.22 dollars) per share will be paid on April 19, 2018.

Picture:LVMH website

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