LVMH reports strong quarter but perfumes and cosmetics fail to shine
The company said that revenue during the all-important fourth quarter grew by 20 per cent and 12 per cent in organic terms to reach a record €7.35bn, thanks to underlying organic sales growth and the incorporation of the Bulgari business from June 2010 into its operations.
The company said that the fourth quarter performance reflected the trends that had been seen at the beginning of the year, when luxury sales began to pick up, and also compare favourably with the corresponding quarter in 2010, when sales also grew at a strong rate.
For the full year, 2011 sales grew at 16 per cent and 14 per cent in organic terms to reach a total revenue of €23.7bn, figures that reflected strong momentum across the five divisions and in the major regions of Europe, Asia and North America.
Rapid growth in Asia
The company said that results reflected particularl rapid growth in the Asia market, as well as an outstanding performance for the Louis Vuitton brand, which recorded double-digit growth, while Parfums Christian Dior also reported strong growth on the back of continued innovations.
Group net profit for the full year grew by 1 per cent to €3.06bn, a figure that included non-recurrent financial gain. Excluding this gain, the company said that net profit would have grown at 34 per cent.
Breaking the figures down according to the five divisions, reported 2011 sales growth of 4 per cent in perfumes and cosmetics at €3.19bn was overshadowed by sales gains of 8 per cent in wines and spirits, 15 per cent in fashion and leather goods, 98 per cent in watches and jewellery – attributable to the Bulgari acquisition, and 20 per cent in selective retailing.
Cosmetics driven by strong sales in the US and Asia
In terms of organic growth, the perfume and cosmetics division reported organic sales growth of 9 per cent, which was mainly driven by strong momentum in both the Asia and American markets.
Christian Dior was highlighted for its strong performance on the back of its star lines, with J’adore being flagged up for its performance in France, where it was the top-selling fragrance in the country during 2011.
Likewise Guerlain was flagged up for the Shalimar line, while Parfums Givenchy’s new women’s fragrance Dahlia Noir was also underlined for its strong performance on the back of its launch in the second half of the year.
"Our businesses enjoyed excellent momentum and profit from recurring operations passed the threshold of €5 billion for the first time,” said Bernard Arnault, Chairman and CEO of LVMH. “In 2012, LVMH intends to further strengthen its global leadership position in high quality products by relying on its sound, long-term strategy.”
