© LVMH – September 2004
LVMH
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• LVMH today
• The LVMH story
• The Group’s business strategy
• LVMH’s management philosophy
Parfums Christian Dior
© LVMH – September 2004
LVMH todayThe world’s leading luxury products group
• A unique portfolio of 50 prestigious brands
• More than 1,600 stores worldwide
• 12 billion euros in sales in 2003
• 56,000 employees, 64% based outside France
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Kenzo
© LVMH – September 2004
Key figures
Sales
OperatingIncome
Net income from currentoperations
In millions of euros
2002 2001
12,229
1,560
334
12,693
2,008
818
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2003
11,962
2,182
1,023
S1 2004
5,678
996
539
© LVMH – September 2004
Group’s simplified structure
Groupe Arnault
LVMH
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Christian Dior SAChristian Dior
Couture
Selective Retailing
100%
DiageoWines & Spirits34%
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Dom Pérignon
© LVMH – September 2004
LVMH: a young group based on timeless brands
1854 Creation of Louis Vuitton
1971 Creation of Moët Hennessy
1987 Creation of Louis Vuitton Moët Hennessy
1989 Groupe Arnault becomes a major shareholder in LVMH
1997 Entry into the Selective Retailing market
1999 Entry into the Watches & Jewelry market
A YOUNG GROUP
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Louis Vuitton
© LVMH – September 2004
16th 1593 Château d’Yquem
18th1729 Ruinart1743 Moët & Chandon1765 Hennessy1772 Veuve Clicquot1780 Chaumet
19th 1828 Guerlain1843 Krug1846 Loewe1852 Le Bon Marché1854 Louis Vuitton1858 Mercier1860 Heuer1865 ZENITH1870 La Cote Desfossés1870 La Samaritaine1895 Berluti
A world-class portfolio of brands that bridgeshistory and innovation
1991 Fresh1991 StefanoBi1995 BeneFit Cosmetics2000 eLUXURY
21st
2001 De Beers LV2004 Moët Hennessy Wine Estates
20th1925 Fendi1925 OMAS1930 Acqua di Parma 1936 Dom Pérignon1936 Fred1945 Celine1947 Parfums Christian Dior1952 Givenchy1952 Connaissance des Arts1957 Parfums Givenchy1958 Emilio Pucci1960 DFS1963 Miami Cruiseline Services1970 Kenzo1972 MountAdam1973 Domaine Chandon1973 Sephora1974 Investir1976 Cape Mentelle1983 Radio Classique1984 Thomas Pink1984 Marc Jacobs1984 Donna Karan1984 Newton1985 Benedom - CD Montres 1985 Cloudy Bay1985 La Tribune de l’Economie1987 Christian Lacroix1987 Kenzo Parfums1987 Laflachère1989 Make Up For Ever
TIMELESS BRANDS
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© LVMH – September 2004
Parfums Christian Dior*Guerlain*Parfums Givenchy*Kenzo Parfums*BeneFit Cosmetics*Fresh*Make Up For Ever*Laflachère*Acqua di Parma*
Wines & Spirits
Fashion &Leather Goods
Perfumes & Cosmetics
Louis Vuitton*Loewe*Celine*Berluti*Kenzo*Givenchy*Christian Dior*Christian Lacroix*Marc Jacobs*Fendi*StefanoBiEmilio Pucci*Thomas Pink*Donna Karan*eLUXURY*
TAG Heuer*ZENITH*Benedom-Christian Dior Montres*Fred*Chaumet*OMAS*De Beers LV*
Watches &Jewelry
DFS*Miami Cruiseline Services*Sephora Europe*Sephora USA*sephora.com*Le Bon Marché*La Samaritaine*
SelectiveRetailing
Otheractivities
D.I Group* Investir Radio Classique La Tribune SID Presse / Défis / Salon des Entrepreneurs Le Monde de la Musique System TV Connaissance des Arts*
Business sectors: brands and companies
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*Asterisk signifies that this is also a company.Christian Dior is one of LVMH’s indirect shareholders.
Moët & Chandon*Dom PérignonMercierRuinartVeuve ClicquotPonsardin*KrugChâteau d’Yquem*Hennessy*Moët HennessyWine Estates*Cloudy BayCape MentelleNewtonMountAdamBodegas ChandonChandon do BrasilDomaine Chandon CaliforniaDomaine Chandon Australia
© LVMH – September 2004
Business strategy
1. Leadership is based on a balanced distribution of turnover, by:
• sectors of activity • geographical areas: 1/3 in Asia, 1/3 in the U.S.,
1/3 in Europe
2. Ambitious organic growth driven by: • a high level of product innovation
• control over the quality of distribution
• sustained advertising & promotion
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© LVMH – September 2004
Well-balanced portfolio of activities(% of 2003 sales)
Perfumes &Cosmetics
18%
Fashion &Leather Goods
35%
Watches & Jewelry4%
Wines & Spirits18%
Selective Retailing & Other activities25%
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© LVMH – September 2004
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Well-balanced geographical coverage(% of sales, June 30, 2004)
USA27%
Japan15%
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Rest of Europe 19%Franc
e17%
Asia Pacific16%
Other markets: 6%
© LVMH – September 2004
The Group’s management philosophy
Decentralized organization to maintain brand identities and company cultures as well as to preserve autonomy
Strong and continuous desire to renew: a management philosophy which encourages innovation
Constant search and development of internal and external talent
LVMH House
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© LVMH – September 2004
• Commitment to environmental protection
• Dynamic social policy
• Strong corporate citizenship commitment inculture, youth and humanitarian action
A strong commitment to sustainability
Domaine Chandon Australia
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