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BUSINESS REVIEW
LVMH 2012

ANNUAL REPORT

Table of contents

  • Page 1
    LVMH 2012 - ANNUAL REPORT BUSINESS REVIEW

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  • Page 3
    ... in two words: CREATIVE PASSION. 12 22 36 46 58 WINES & SPIRITS FASHION & LEATHER GOODS PERFUMES & COSMETICS WATCHES & JEWELRY SELECTIVE RETAILING - The values of LVMH Innovation and creativity Because our future success will come from the renewal of our product offering while respecting the...

  • Page 4

  • Page 5
    ... with quality, and power with agility to develop our stable of brands, build tomorrow's growth drivers and ensure our long-term success...Our Group exhibited excellent performance in 2012 and continues to expand market share in a mixed international environment. Our brands are strong, our teams are...

  • Page 6
    ... of our watch and jewelry brands, fed by the vitality of their iconic product lines and expanded manufacturing capabilities; a full-year contribution from Bulgari; the fortified positions of DFS and Sephora, which continue to win over and keep new customers from a wide range of cultures thanks to...

  • Page 7
    ..., aspiring towards custom-made items or services and increasingly aware of what makes our products special: their creative appeal and finely crafted quality. This deeply-rooted trend will open up a panoply of exciting prospects for us. Bernard Arnault Chairman and Chief Executive Officer 05 / 68

  • Page 8
    ... highlights EXCELLENT PERFORMANCE FOR LVMH IN 2012 REVENUE (EUR millions) 2012 2011 2010 28,103 23,659 20,320 REVENUE BY BUSINESS GROUP (EUR millions) Wines and Spirits Fashion and Leather Goods Perfumes and Cosmetics Watches and Jewelry Selective Retailing Other activities and eliminations...

  • Page 9
    LVMH 2012 - Financial highlights STORE NETWORK (at December 31, 2012) NUMBER OF STORES 2012 United States 644 stores Europe (excl. France) 910 stores 2011 2010 3,204 3,040 2,545 France 412 stores Japan 370 stores Asia (excl. Japan) 670 stores Other markets 198 stores REVENUE BY GEOGRAPHIC ...

  • Page 10
    08 / 68

  • Page 11
    ... quality and creativity of our products. These are our greatest assets whatever the circumstances. In times of limited visibility such as now, we need to be even more ï¬,exible and responsive. Our market is not monolithic. Our brands have different positioning, extensive product lines and operations...

  • Page 12
    LVMH 2012 - Governance The priority objectives of the Board of Directors, the strategic body of LVMH, are to increase the value of the Company and defend its corporate interest. Its principal missions are to adopt the major strategies of the Company and the Group, monitor the implementation of ...

  • Page 13
    ...Antonio Belloni Group Managing Director Bernard Arnault Chairman and Chief Executive Officer Antonio Belloni Group Managing Director Pierre Godé Vice-Chairman Nicolas Bazire Development and Acquisitions Yves Carcelle Louis Vuitton foundation Chantal Gaemperle Human Resources Antoine Arnault...

  • Page 14
    LVMH 2012 WINES & SPIRITS

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  • Page 16
    ... and is expanding its presence in the luxury spirits segment in addition to its historical business. The portfolio of brands is served by a powerful international distribution network. REVENUE (EUR millions) 2012 2011 2010 4,137 3,524 3,261 PROFIT FROM RECURRING OPERATIONS (EUR millions) 2012 2011...

  • Page 17
    ...'s spirits brands in line with your expectations? The spirits segment is enjoying steady growth. We have acquired brands like Belvedere, Wenjun, Glenmorangie and - Major strategic priorities Pursue value creation strategy. Target balanced and sustainable growth. Develop production capacities...

  • Page 18
    ...and an enhanced product mix, but also to a firm pricing policy. Profit from recurring operations rose 14%. In keeping with the positive trend observed in the wines and spirits market in 2011, demand remained robust in 2012. Sales by volume grew by 2% for all LVMH champagne brands, with prestige cuv...

  • Page 19
    LVMH 2012 - Wines & Spirits VEUVE CLICQUOT pursued its value-creation strategy successfully, with many new innovative products, such as Ponsardine and Suit Me. Veuve Clicquot Season events, such as polo tournaments in New York and Los Angeles, continued to underpin the Veuve Clicquot's ...

  • Page 20
    ..., and to maintain strong positions in Taiwan, Vietnam, Malaysia and China, where well over a million cases have been sold. The brand has confirmed its number-one position in the Americas while growing rapidly in many promising new markets, such as Mexico, Eastern Europe, Nigeria, South Africa and...

  • Page 21
    LVMH 2012 - Wines & Spirits - Outlook In 2013, Wines and Spirits houses will maintain a strategy of value-creation and targeted innovation, with the goal of continuously enhancing the desirability and reputation of their products throughout the world. Active efforts will be made to increase prices...

  • Page 22
    ... region In the face of continually increasing sales, the new Mont Aigu production site in France's Marne region will supplement the production capacity of the historical sites of LVMH's Champagne Houses. The aim is to boost production resources while making quality control the focus of the project...

  • Page 23
    ... his work in Los Angeles, followed by more than 20 other markets, such as Japan, Thailand, Russia, Poland and the Netherlands. The international launch took place in Paris on October 22, 2012 and offered an immersion into the world of Street Art and exclusive access to a collector's limited edition...

  • Page 24
    LVMH 2012 FASHION & LEATHER GOODS

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  • Page 26
    ... Goods business group. This outstanding group of brands from both sides of the Atlantic has 1,280 stores throughout the world. LVMH supports growth of these brands by providing them with shared resources, while at the same time respecting their identity and their creative positioning. REVENUE...

  • Page 27
    ... the years. While still committed to designing iconic products in each of its fields, the Maison is stepping up the development of high-end leather goods that showcase the superior know- how of its craftsmen. Other brands in this business group demonstrate the same rigor in guiding their expansion...

  • Page 28
    ... profitability. Backed by consistent strategy and the continued excellence of its savoir-faire, Louis Vuitton pursued carefully managed expansion plans in 2012, once again demonstrating its inexhaustible creativity. In a mixed global business environment, Louis Vuitton's various customer segments...

  • Page 29
    LVMH 2012 - Fashion & Leather Goods Fashion and Leather Goods posted organic revenue growth of 7% in 2012. Profit from recurring operations for this business group was up 6%. Louis Vuitton continued the selective, quality-driven development of its network of stores. Following the grand opening of...

  • Page 30
    ... its newly launched 2Jours model performed remarkably well. Fur, the brand's most iconic symbol, enjoyed increased visibility. Fendi carried out selective store openings in certain high-end department stores in Europe and Japan. The brand further expanded its retail network in Mexico, the Middle...

  • Page 31
    LVMH 2012 - Fashion & Leather Goods contemporary fashion market, the heightened sophistication of the designer's second line, Marc by Marc Jacobs, is building on its success. The Denim line also had an excellent year. Another highlight of 2012 was the launch of Dot , Marc Jacobs' new fragrance for...

  • Page 32
    ... for both revenue and profit. Accessories and men's ready-to-wear made particularly strong gains. In leather goods, the Antigona bag continues to perform well and has become a new iconic model, alongside the popular Nightingale and Pandora lines. Givenchy expanded its presence in China during the...

  • Page 33
    ...of its high-end offerings and its fur creations. More spacious stores will be opened, as part of a revamping and expansion of the brand's retail network. A new store concept, currently under development, will be rolled out initially at key Fendi locations, including New Bond Street in London, Avenue...

  • Page 34
    LVMH 2012 - Fashion & Leather Goods FOCUS Know-how and exceptional service for Louis Vuitton's High-End Leather Goods line At Louis Vuitton, personalizing luggage has been a tradition from the time the Maison was founded. From the end of the 19th century, bands of color and customers' initials ...

  • Page 35
    ... of the Louis Vuitton world, customers can explore works of art specially produced for Louis Vuitton by contemporary Chinese and international artists. In this Maison, where art offers so much to be discovered, Louis Vuitton gives center stage to the collections and exceptional service that it...

  • Page 36
    LVMH 2012 - Fashion & Leather Goods FOCUS Fendi celebrates the 15th anniversary of the Baguette bag In 1997, when minimalism was all the rage in Europe, Silvia Venturini Fendi had a stroke of genius. She came up with a tiny, rectangular handbag, featuring a Forever buckle designed by Karl ...

  • Page 37
    ... with design and production house Boolab. Just like an art gallery, Loewe showcases its leather goods and most iconic products to illustrate the Maison's expertise in leather craftsmanship. With displays of everything from leather and silk work to each manufacturing stage of the Amazona bag, Galeria...

  • Page 38
    LVMH 2012 PERFUMES & COSMETICS

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    LVMH 2012 - Perfumes & Cosmetics LVMH, a major player in the perfumes, make-up and skincare sector, relies primarily on a portfolio of brands representing French companies with an international presence: Christian Dior, Guerlain, Givenchy and Kenzo. The Group also supports the development of high-...

  • Page 41
    ... Dior site near Orléans are contributing to a number of successes. They are responsible for developing products for all of the business group's brands, and their work is key to producing truly innovative products of high intrinsic quality. The new Helios center, designed to house the LVMH teams...

  • Page 42
    ... of its emblematic product lines. J'adore further strengthened its leadership position in France and gained market share in all countries. Miss Dior has opened a new page in its history with the launch of Eau Fraîche and Miss Dior Le Parfum. Dior Homme Sport recorded strong growth and is now...

  • Page 43
    ... business group increased by 17%. GUERLAIN maintained its strong growth momentum. Fully reï¬,ecting its singular creative spirit, and spurred by operational excellence, La Petite Robe Noire turned in truly exceptional results, rising to the number two position in the French market only eight months...

  • Page 44
    ...across a number of countries. The initial results achieved by Fan di Fendi Extrême and Fan di Fendi pour Homme, launched at the end of the year, were very promising. Thanks to a unique positioning, appreciated for its playful and offbeat style, BENEFIT again recorded double-digit revenue growth in...

  • Page 45
    ... momentum developed in 2012, all LVMH brands have a dynamic year ahead of them in 2013 and will maintain their ambitious strategies in terms of innovation and advertising investments. Each shows strong growth potential and they have set new targets for market share gains. Parfums Christian Dior will...

  • Page 46
    ...the process of creating a Dior perfume, as close to the ï¬,owers as possible. Narrated by Dior Perfume Designer François Demachy, this travel film reveals the genesis of a perfume whose birth is as much due to the talent of its creator as to the quality of its raw materials. Timeless images depict...

  • Page 47
    ... 2012 - Perfumes P & Cosmetics FOCUS "Dessine-moi La Petite Robe Noire" I was born three years ago in the fragrance laboratory of Maison Guerlain's Exclusive Collections. Paris is my kingdom...and my name stands for quintessential Parisian elegance. I live in a bottle, the mythical glass casing...

  • Page 48
    LVMH 2012 WATCHES & JEWELRY

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  • Page 50
    ... of the select group of true Swiss Manufactures, the development and transition to high-end products of Dior timepieces and the creativity and productivity of the jewelry collections from Chaumet, Fred and De Beers. In 2011, the business was expanded with the talent as well as the international and...

  • Page 51
    ... of the Watches and Jewelry business group - 2012 was another vintage year for LVMH Watches & Jewelry. What are the main impacts of this success? Upmarket positioning is the cornerstone of our development strategy: on the global market, in watchmaking as well as jewelry, the high-end segment in...

  • Page 52
    ...other iconic lines King Power and Big Bang. A new version of Big Bang, launched in partnership with Ferrari, encapsulates the two brands' shared values of performance and design. Hublot reaffirmed its great creativity and upmarket strategy by developing high-end models in women's watches and jewelry...

  • Page 53
    ...with high added value, thus reaping the rewards of its strategy to integrate technological and manufacturing expertise. Hublot accelerated its worldwide expansion with twenty new openings, bringing the number of its points of sale to 54 at year-end 2012. ZENITH kept up its solid growth in the highly...

  • Page 54
    ... position in jewelry watches and men's watches, and continued to expand in China. MONTRES DIOR reinforced its upscale image with new models in the Dior VIII collection and with the Grand Bal limited edition, in keeping with the vision and tradition of "Haute Couture" excellence upheld by the brand...

  • Page 55
    ...strengthen the image and visibility of all watch and jewelry brands. The retail network will continue to expand in China, with the opening of new boutiques, as well as on other strategic markets. All brands will support the development of their iconic product lines while at the same time maintaining...

  • Page 56
    ... of Octo is a benchmark in the world of men's luxury watches. To create a shape so subtle yet with a design so complex, each component of the Octo case has to undergo an elaborate production process. More than 40 operations are involved in the manufacture of the case middle, the bezel and the back...

  • Page 57
    ... timepieces. The watch has a completely new regulator system: instead of the spiral shape in a classical hairspring, it has a coupling blade and excitatory blade system working with a linear oscillator. Conceived, developed and manufactured in-house by the company's R&D division in La Chaux-de-Fonds...

  • Page 58
    ... 2012 - Watches & Jewelry FOCUS Hublot's "$5 million" It is the most valuable watch ever produced by Hublot. A world first, a unique piece, an exceptional and incredibly rare feat. And a completely different approach was used for its creation. Unlike an Haute Joaillerie piece, where the design...

  • Page 59
    LVMH 2012 - Watches & Jewelry FOCUS Zenith on the edge of space One man, one watch and three world records. The whole world was watching Austrian Felix Baumgartner on October 14, 2012. After a balloon ascent that took him to the edge of space, the 43-year-old professional skydiver leapt from a ...

  • Page 60
    LVMH 2012 SELECTIVE RETAILING

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  • Page 62
    ... their markets; and the selective retailing concepts represented by Sephora, the most innovative company in the beauty segment, and Le Bon Marché, a department store with a unique atmosphere located in Paris. REVENUE (EUR millions) 2012 2011 2010 5,378 6,436 7,879 PROFIT FROM RECURRING OPERATIONS...

  • Page 63
    ... increasing number of new customers, the geographical expansion of cruising routes, and the trend to commissioning ever-larger ships are excellent growth vectors. Firstly in France, then worldwide, Sephora has revolutionized the process of buying perfume and beauty products. The success of our brand...

  • Page 64
    ...its strategy of upscaling across all destinations, renovating existing stores and bringing in new luxury brands aimed at strengthening the vitality and appeal of its product range. MIAMI CRUISELINE, which enjoys a strong position in the cruise market, delivered a solid performance. Business related...

  • Page 65
    ...its customers benefit from the best possible expertise. As of December 31, 2012, its global network comprised 1,398 stores in 30 countries. Three new online retail sites were launched in Italy, Canada and Russia. The US site, which after being completely overhauled offers an unrivaled online sales...

  • Page 66
    .... The retailer also opened its first stores in the high-growth markets of Brazil and India. LE BON MARCHÉ RIVE GAUCHE delivered a strong performance, buoyed by the luxury and women's fashion segments. The world's first ever department store celebrated its 160th birthday in 2012. Major commercial...

  • Page 67
    ...China, one of the high points for the beginning of the new year will be the opening of a flagship store in Shanghai. Sephora will more than ever place the emphasis on a customer-focused strategy, extending its loyalty program to new regions and offering new personalized services. Product and service...

  • Page 68
    ... the extensive range of foundation products in-store. Sephora has just teamed up with global color authority Pantone to develop a breakthrough offer in customer service. Customers can now select their foundation with scientific precision. Already available in the United States under the name Color...

  • Page 69
    LVMH 2012 - Selective Retailing FOCUS Le Bon Marché, 160 years of creative passion In 1852, Aristide Boucicaut revolutionized the world of retail when he created the world's first department store. Le Bon Marché, located on the corner of the rue du Bac and rue de Sèvres in Paris, introduced ...

  • Page 70
    ... libraries of LVMH and Group's Maisons. This book was printed on paper from sustainably managed forests, certified FSC (Forest Stewardship Council). LVMH - 22, avenue Montaigne - 75008 Paris - France Tel.: 33 (0)1 44 13 22 22 - Fax: 33 (0)1 44 13 22 23 - www.lvmh.com 68 Design and production:

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    LVMH 2012 - ANNUAL REPORT MAISONS

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    ... 21 26 28 WINES & SPIRITS FASHION & LEATHER GOODS PERFUMES & COSMETICS WATCHES & JEWELRY SELECTIVE RETAILING OTHER ACTIVITIES - History of the Group Although the history of the LVMH Group began in 1987 with the merger of Moët Hennessy and Louis Vuitton, the roots of the Group actually stretch back...

  • Page 76
    ... and its elegant maturity. The history of the House is marked by the pioneer spirit of its founders. Jean-Remy Moët, the grandson of Claude, transformed the family trading business into one of the world's leading international luxury brands. The leaders of the House very quickly understood that an...

  • Page 77
    ... in the French forces, founded a brandy trading business in Cognac. His son James rapidly expanded the company and the history of cognac has been written with Hennessy ever since. Today, Hennessy is the uncontested leader in cognac, selling more than 60 million bottles a year around the world. Its...

  • Page 78
    LVMH 2012 - Maisons WINES & SPIRITS Clicquot died in 1866, she left a healthy business to her successor Edouard Werlé. In 1987, the House joined the LVMH Group. Maison Veuve Clicquot still incarnates today, in France and worldwide, the values treasured by Madame Clicquot - modernity and daring ...

  • Page 79
    ... was "to make the best wine in the world". This lofty ambition revealed a visionary spirit in this young monk just 30 years old. An exact contemporary of Louis XIV, Pierre Pérignon transformed the history of wine, just as the Sun King revolutionized the "art of living". The excellence of "Father...

  • Page 80
    ... Chandon, recognized that other winegrowing regions outside France's Champagne region had extraordinary potential for producing high quality sparkling wines. He asked oenologist Renaud Poirier to find undeveloped regions where superior New World sparkling wines could be produced. Renaud Poirier very...

  • Page 81
    ...'s South Island. Its reputation and quality helped put New Zealand wines on the global wine map, earning them international prestige. The Cloudy Bay estate benefits from a relatively cool and moderate maritime climate year round, producing one of the world's most refined Sauvignon Blanc wines...

  • Page 82
    ... is common to the three wines developed by the Domaine, each wine has its own individual style. The product line is available in Numanthia, Termes and Termanthia. Numanthia is part of the Estates & Wines collection. NUMANTHIA It is only fitting that the world's first super premium vodka should hail...

  • Page 83
    .... Recognized as one of the world's best wineries by the international press, Terrazas de los Andes has in just a few years become a leading brand in the superpremium Argentine wine segment. Its wines are exported to 40 countries. It was quite natural that Terrazas de los Andes was selected by Cheval...

  • Page 84
    ...some 700 square meters of selling space, houses the largest selection in the World of Loewe's exquisite leather collections. LOUIS VUITTON - Since 1854 - Louis Vuitton, a trunk-maker in Paris since 1854, built a legend on the art of travel by creating luggage, bags and accessories as innovative as...

  • Page 85
    ...to invest in other creative spheres: ready-to-wear, shoes, accessories, watches, jewelry, pens and stationery. Under the artistic direction of Marc Jacobs, success and recognition have been immediate. These intricately manufactured creations are now available in an exclusive network of stores around...

  • Page 86
    .... Today, the quality of Rossimoda represents the cutting-edge of style the world over. Céline, founded in 1945 and owned by LVMH since 1996, is a modern luxury brand offering a collection of ready-to-wear clothing, leather goods, shoes and accessories. Céline's Artistic Director since 2008 is...

  • Page 87
    ... became a member of the LVMH Group in 1988. In 1995, Hubert de Givenchy retired after 43 years of fashion design. Today, Givenchy is an international luxury brand, known worldwide for its Haute Couture collections, ready-to-wear fashions for men and women and accessories. Born of the tradition of...

  • Page 88
    ...'s collections exclusively, the company now offers two lines of ready-to-wear, bags, shoes and accessories for men and women: Marc Jacobs and Marc by Marc Jacobs, as well as a children's line and Marc Jacobs perfumes. The New York fashion shows for both lines are events each season. While the brand...

  • Page 89
    ..., in a wide range of colours and designs, and signature product detailing, it is responsible for taking Jermyn Street expertise and heritage to a global market. Thomas Pink started as one store in Fulham, London. Today the brand has over 100 points of sales worldwide with flagship stores on Jermyn...

  • Page 90
    ... authentic and iconic fragrance that has inspired the Acqua di Parma world and its values based on the best of the Italian lifestyle, a passion for beauty, an eye for detail, and the contemporary interpretation of luxury. Over the years the brand has expanded its product range, introducing three new...

  • Page 91
    ... two hundred experts work to design and develop products that perform better. Dior speaks to women. All women. They find in each Dior perfume an expression of their personality, spirit and soul. Because Dior knows how to create a perfume to suit every woman. Christian Dior used to say that perfumes...

  • Page 92
    .... Initially intended for exclusive sale in the brand's own stores, the perfume was so successful that sales were expanded to all perfume retail circuits. This success encouraged Loewe to develop its perfume segment. Over the next 30 years, ten new perfumes were created (five for women, two for men...

  • Page 93
    ... place that trains the make-up artists of tomorrow. Today, the company's mission is to share the art and passion of make-up with artists and customers in the different Academies around the world but also in various points of sales thanks to the Make Up Schools corners. The product line is very broad...

  • Page 94
    ..., the famous Italian luxury leather goods and ready-to-wear brand, was founded in Rome in 1925, and built its reputation using the most luxurious leathers and furs. Following the success of its ready-towear clothing men and women, shoes, watches, eyewear, ties, scarves and home furnishings, Fendi...

  • Page 95
    ... of the tiara, social emblem and fashion accessory. In 1907, he established his boutique at 12, Place Vendôme in Paris. Chaumet has been part of the LVMH Group since 1999. The Maison has an international network of boutiques, designed by French architect Jean-Michel Wilmotte. Chaumet's headquarters...

  • Page 96
    ... his timepieces. He developed designs for interchangeable parts and an automated manufacturing process to support the careful craftsmanship that went into creating and finishing each watch. Still today, the Manufacture is in a constant state of renewal as the site is currently under renovation. The...

  • Page 97
    ... movie world. With the growth of its international reputation, Bulgari began its first phase of global expansion in the 1970s, opening stores in New York, Geneva, Monte Carlo and Paris. In 1977, Bulgari launched the BVLGARI BVLGARI watch, a worldwide success story, considered an all-time classic...

  • Page 98
    ... with exceptional jewelry-making know-how. "Hublot is a different way of moving forward," say connoisseurs of this unique Swiss watchmaker, where every moment is propelled toward the next at lightning speed. The design of the case on the first watch, created in 1980, was inspired by a ship porthole...

  • Page 99
    LVMH 2012 - Maisons WATCHES & JEWELRY The new collection launched in 2005 was named Big Bang, a perfect illustration of the concept of Fusion! The glass and the case have sharper angles, screws that come through the case, an echo again of a porthole...and retain the DNA of the first Hublot ...

  • Page 100
    ... towards travelers and its focus on the world of luxury products in the 4 categories of Fashion, Beauty, Watches & Jewelry, Wines & Spirits. As DFS continues to perfect its business model, improve its offerings and expand into emerging and developed markets, it is well positioned to remain the world...

  • Page 101
    ... currently operates more than 1,300 stores in 30 countries worldwide where customers enjoy the freedom to choose from a broad range of products at their leisure. Since its acquisition by LVMH in July 1997, Sephora has undergone rapid international expansion. The company's distinctive store layout...

  • Page 102
    ... Naval Architects. Royal Van Lent's success can be attributed to its passion for innovation, unparalleled production equipment, expert craftsmanship that strives for perfection, unrivalled experience in boat-building architecture, and close partnerships with the world's top designers. These are the...

  • Page 103
    ... park, restoring its illustrious past and opening it to everyone. With this in mind, the decision was easily made in 2006, jointly with the City of Paris, to build the future Louis Vuitton Foundation for Creation, dedicated to contemporary art and designed by architect Frank Gehry. The identity...

  • Page 104
    ... a department store, rental offices and shops until 2005, when the building was closed for safety reasons. The renovation of La Samaritaine will revitalize this magnificent building, embracing modernity with an ambitious project including businesses, housing and services. The architectural concept...

  • Page 105
    ... one-off design pieces. A collection of extraordinary dining experiences, by invitation-only events, dedicated services and a genuine and caring attitude complete Cheval Blanc's promise of a new Art de Recevoir. LVMH Hotel Management also develops properties under the White 1921 brand. Positioned on...

  • Page 106
    ... libraries of LVMH and Group's Maisons. This book was printed on paper from sustainably managed forests, certified FSC (Forest Stewardship Council). LVMH - 22, avenue Montaigne - 75008 Paris - France Tel.: 33 (0)1 44 13 22 22 - Fax: 33 (0)1 44 13 22 23 - www.lvmh.com 32 Design and production:

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    LVMH 2012 - ANNUAL REPORT SUSTAINABLE DEVELOPMENT

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  • Page 111
    ... luxury businesses by the values of creativity and excellence. To apply our creative passion to a genuine art de vivre to which our customers aspire. To strengthen our position as a global leader, and to be the benchmark in the management and development of high quality brands. Environment To work...

  • Page 112
    ... career and personal development opportunities that are reï¬,ected and supported in its Human Resources policy. This policy must simultaneously develop internal skills, ensure recruitment of new talents and affirm the strong values that form the very basis of the LVMH culture. The Group's position...

  • Page 113
    ...sales employees Production workers TOTAL 2012 17,851 9,960 65,415 13,122 106,348 2011 16,009 9,078 60,070 12,402 97,559 2010 13,915 8,141 50,055 11,431 83,542 17% 9% 62% 12% 100% EMPLOYEES* BY BUSINESS GROUP 5% Other markets 7% Wines & Spirits Fashion & Leather Goods Perfumes & Cosmetics Watches...

  • Page 114
    ... Development Center is a further illustration of the global reach of the LVMH Group. DEVELOPING INTERNATIONAL MANAGERS Special forums devised, developed and implemented by the LVMH Maison London team have brought key executive managers together for modules offered by region in cities such as New...

  • Page 115
    ... employees) France Rest of Europe United States Japan Rest of Asia Other markets 31% 26% 23% 25% 25% 6 9% 74% 77% 75% 75% 3 4% 6 6% BREAKDOWN OF MEN/WOMEN BY BUSINESS GROUP (regular employees) Wines & Spirits Fashion & Leather Goods Perfumes & Cosmetics Watches & Jewelry Selective Retailing...

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    ... the biggest internal communities, with 500 members worldwide. In 2012, in France, all the Group's Maisons signed corporate agreements or drew up action plans on gender equality within the company, specifically covering working conditions, career development and improvement in the work/life balance...

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    ...2012, enabling them to learn about the businesses and the expertise needed for the opportunities that could be offered to them in the future. The Group has put in place a number of systems to help job-seekers. Again this year, over 150 people were able to benefit from "Jobstyle" self-image training...

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    LVMH 2012 - Human Resources In 2012, the Group organized its first disability and responsible procurement fair as part of its responsible purchasing policy. Introduced by Antonio Belloni, the Group Managing Director, and Chantal Gaemperle, Executive Vice President, Human Resources and Synergies, ...

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    ...Fund to Advance New York City". The Maisons are very supportive of very disadvantaged children. In January 2010, Louis Vuitton and SOS Children's Villages sealed a 5-year global partnership to develop a program called "Partnership for Children's Futures", with operations in countries including India...

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    ...51% Re-audits BREAKDOWN OF AUDITS BY REGION 27% Europe 63% Asia 5% North America 2% Africa 3% Others Perimeter: Wines & Spirits, Louis Vuitton, Berluti, Donna Karan, Fendi, Givenchy Couture, Kenzo, Loewe, Marc Jacobs, Bulgari, Chaumet, Dior Horlogerie, Fred, Hublot, TAG Heuer, Zenith, Acqua di...

  • Page 121
    ... at Louis Vuitton in the United States, heard about and applied for the position of HR Training and Development Manager at Moët Hennessy Europe. The process yielded success for Linda, and she has now arrived in London and taken up her new post! Montfermeil's Défilé Cultures et Création As part...

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    ... inï¬,uence on the Group's activities, shape the future demands of our markets, and determine the growth opportunities of our brands. Further development of LVMH's environmental strategy has led to a better understanding internally of this reality and a better sharing externally of the demands...

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    ..., the five LVMH business groups - Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry, and Selective Retailing - are linked by a shared perspective on environmental issues. Some subjects are genuinely Group-wide and are closely scrutinized: consumer health...

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    ...in the "2012 Environmental Report" demonstrate the teams' capacity for initiative and the quality of increasingly stringent processes. MILESTONES COMMITMENTS ADOPTED AND CONFIRMED International charters and agreements signed by LVMH provide the framework for the initiatives led by the Group and its...

  • Page 125
    ... the environment such as additional costs related to high environmental quality certification for buildings, training and technical support for staff internally, environmental sponsorships, external partnerships, etc. COMMITMENT OF THE LVMH GROUP RECOGNIZED IN THE FRENCH NATIONAL STRATEGY FOR...

  • Page 126
    ...stores. (2) Change due to the consolidation of Bulgari manufacturing sites. BREAKDOWN OF EMISSIONS BY BUSINESS GROUP IN 2012 (in metric tons of CO2 equivalent) CO2 emissions Of which: direct in 2012 CO2 emissions Wines and Spirits Fashion and Leather Goods Perfumes and Cosmetics Watches and Jewelry...

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    ... outcomes of which will be shared across all the teams and progressively deployed and integrated into other Group Maisons. The program has been designed to reinforce the integration of environmental concerns into managerial processes, facilitate the development of new management tools, and take into...

  • Page 128
    ... structure was integral to the ongoing initiatives of the Research & Development departments and the business groups (Wines & Spirits, Perfumes & Cosmetics) that had always been committed to sustainable development. FIRST ENVIRONMENT COMMITTEE An "Environment, Health and Safety Committee" was also...

  • Page 129
    ... outside the company. AN EXAMPLE OF STRATEGIC DEVELOPMENT AT LOEWE In 2012, Loewe established a sustainable development program including over 25 target work areas structured around six aspects of the value chain: sustainability of products (design), the supply and production of sustainable leather...

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    ... Since early 2012, LVMH has also been a member of the "Leather Working Group". 2004 2006 FIRST HQE® BUILDING Louis Vuitton's new modern, eco-design logistics platform at Cergy, "Eole-Cergy 3", inaugurated in 2006, was the first LVMH building to achieve "HQE®" high quality environmental standard...

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    LVMH 2012 - Environment: 20 years at LVMH HIGHLIGHTS AN ICONIC CULTURAL PROJECT IN THE HEART OF THE BOIS DE BOULOGNE The project to build the Louis Vuitton Foundation for Creation Museum was launched in 2011 with architect Frank Gehry and is currently under construction in the heart of the Bois ...

  • Page 132
    ... but also major contempory artists. 2012 saw the Group's very active commitment to the production of several major events in the cultural and artistic season, in Paris and internationally. The first event was in Paris in the spring: LVMH supported the Pompidou Center's retrospective of the German...

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    ... Gallery in London. In 2013, LVMH will continue its commitment to design and artists from all over the world. In China, beginning in January, the new generation of young Chinese artists will be unveiled in the "ON/OFF" exhibition at the Ullens Center for Contemporary Art, which LVMH has partnered...

  • Page 134
    ... of Art, Dist. RMN/image of the MMA Affiche Centre Pompidou 2012 - Picture libraries of LVMH and Group's Maisons. This book was printed on paper from sustainably managed forests, certified FSC (Forest Stewardship Council). Design and production: LVMH - 22, avenue Montaigne - 75008 Paris - France...

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    LVMH 2012 - ANNUAL REPORT FINANCE

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    ... LVMH FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS BY BUSINESS GROUP THE WORLD'S LEADING LUXURY PRODUCTS GROUP A unique portfolio of over 60 PRESTIGIOUS BRANDS An international distribution network of 3,204 STORES More than 100,000 EMPLOYEES in over 70 COUNTRIES REVENUE of 28.1 BILLION EUROS in 2012...

  • Page 140
    ...indices, ending the year respectively 15% and 14%. The LVMH share closed at â,¬138.80 on December 31, 2012. LVMH's market capitalization was â,¬70.5 billion, making it the third largest company on the Paris market. LVMH is included in the major French and European indices used by fund managers: the...

  • Page 141
    ... 2012 Gross dividend (in euros) Growth for the year Payout ratio(2) Group share of net profit per share (in euros) 2.90(1) 12% 43% 6.86 2011 2.60 24% 43% 6.27 2010 2.10 27% 34% 6.36 STOCK MARKET DATA (in euros) Year high (during trading) Year low (during trading) Year-end price Change for the year...

  • Page 142
    ... & Spirits Fashion & Leather Goods Perfumes & Cosmetics Watches & Jewelry Selective Retailing Other activities and eliminations TOTAL 2012 1,260 3,264 408 334 854 (199) 5,921 % of revenue OPERATING INVESTMENTS (EUR millions) 30% 33% 11% 12% 11% 21% 2010 2011 2012 976 1,730 1,702 NET PROFIT, GROUP...

  • Page 143
    ...BY BUSINESS GROUP (in %) 15% 35% 13% 10% 27% Wines & Spirits Fashion & Leather Goods Perfumes & Cosmetics Watches & Jewelry Selective Retailing and Other activities 2012 REVENUE BY GEOGRAPHIC REGION OF DELIVERY (in %) 11% NUMBER OF STORES 2012 2011 3,204 3,040 2,545 France 20% Europe (excl...

  • Page 144
    ... (excl. Japan) 15% Other markets FASHION & LEATHER GOODS (EUR millions) Revenue Profit from recurring operations Operating investments 2012 9,926 3,264 579 2011 8,712 3,075 437 2010 7,581 2,555 370 2012 REVENUE BY GEOGRAPHIC REGION OF DELIVERY (in %) 8% France 19% Europe (excl. France) 20...

  • Page 145
    ...% France 33% Europe (excl. France) 12% United States REVENUE BY PRODUCT CATEGORY (in %) 6% Japan 48% 35% 17% 22% Asia (excl. Japan) Perfumes Cosmetics Skincare products 14% Other markets WATCHES & JEWELRY (EUR millions) Revenue Profit from recurring operations Operating investments 2012...

  • Page 146
    LVMH 2012 - Finance The consolidated financial statements presented in the following pages are abbreviated. CONSOLIDATED BALANCE SHEET ASSETS (EUR millions) Brands and other intangible assets Goodwill Property, plant and equipment Investments in associates Non-current available for sale ...

  • Page 147
    ... Finance LIABILITIES AND EQUITY (EUR millions) Share capital Share premium account Treasury shares and LVMH-share settled derivatives Cumulative translation adjustment Revaluation reserves Other reserves Net profit, Group share Equity, Group share Minority interests 2012 152 3,848 (414) 342 2,819...

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    ... six months of the year was offset by a reduction in the market value of the investment, resulting from the slight dip in the share price of Hermès International in 2012. At year-end 2012, the 22.6% stake in Hermès amounted to 5.4 billion euros, the same as at year-end 2011. Inventories increased...

  • Page 149
    .... Cash and cash equivalents and current available for sale financial assets totaled 2.3 billion euros at the end of the fiscal year, down slightly from 2.4 billion euros at year-end 2011. As of year-end 2012, the Group's undrawn confirmed credit lines amounted to 3.3 billion euros, substantially...

  • Page 150
    ... share) 2012 28,103 (9,917) 18,186 2011 23,659 (8,092) 15,567 2010 20,320 (7,184) 13,136 REVENUE Cost of sales GROSS MARGIN Marketing and selling expenses General and administrative expenses (10,101) (2,164) 5,921 (8,360) (1,944) 5,263 (7,098) (1,717) 4,321 PROFIT FROM RECURRING OPERATIONS...

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    LVMH 2012 - Finance CONSOLIDATED STATEMENT OF COMPREHENSIVE GAINS AND LOSSES (EUR millions) 2012 3,909 (99) (18) (117) 2011 3,465 190 47 237 2010 3,319 701 89 790 NET PROFIT BEFORE MINORITY INTERESTS Translation adjustments Tax impact Change in value of available for sale financial assets ...

  • Page 152
    ... a sustained policy of price increases in line with the ongoing value-creation strategy. Surging demand in Asia made a particularly significant contribution to this strong upturn in revenue. China is still the second largest market for the Wines and Spirits business group. Fashion and Leather Goods...

  • Page 153
    ... 1 point for this business group to 30%. Fashion and Leather Goods posted profit from recurring operations of 3,264 million euros, up 6% compared to 2011. Profit from recurring operations for Louis Vuitton increased, and Céline, Loewe, Givenchy, and Marc Jacobs confirmed their profitable growth...

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    ...sale of non-current available for sale financial assets Impact of purchase and sale of consolidated investments 2 ,474 (131) 36 (45) 2,177 (518) 17 (785)(1) 3,073 (1,724) 70 (61) NET CASH FROM (used in) FINANCIAL INVESTMENTS III. TRANSACTIONS RELATING TO EQUITY Capital increases of LVMH Capital...

  • Page 155
    ... million euros. This increase in inventories, driven by growth in volume of the Group's business activities and number of stores, was mainly related to Selective Retailing (DFS in particular, which won new airport concessions), Fashion and Leather Goods, and Wines and Spirits, especially as a result...

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    LVMH 2012 - Finance CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR millions) Number of shares Share capital Share premium Treasury shares account and LVMHshare settled derivatives Cumulative translation adjustment AS OF DECEMBER 31, 2011 Gains and losses recognized in equity Net profit ...

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    LVMH 2012 - Finance Revaluation reserves Available for sale financial assets Hedges of future foreign currency cash ï¬,ows Vineyard land Net profit and other reserves Total equity Group share Minority interests Total 1,990 (47) (15) 133 714 44 15,863 22,451 41 1,061 (3) 485 482 3 8 (317)...

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    PHOTOGRAPHS - Chaumet, Pol Baril. This book was printed on paper from sustainably managed forests, certified FSC (Forest Stewardship Council). LVMH - 22, avenue Montaigne - 75008 Paris - France Tel.: 33 (0)1 44 13 22 22 - Fax: 33 (0)1 44 13 22 23 - www.lvmh.com 20 Design and production:

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