96 billion a decrease of 6 4 on a comparable

After a phase of assignments and austerity, LVMH does more to resume acquisitions. The conditions appear to be met again for the number a world of luxury, which yesterday unveiled a net result (Group share) of EUR 723 million in 2003, an increase of 30, for a turnover of 11.96 billion, a decrease of 6 ( 4 on a comparable). Net debt to equity has been reduced by 66 end 2002 to 57 end of 2003 and the free cash flow amounted to 1.35 billion end of December.

The CEO of LVMH, Bernard Arnault, said: "if opportunities arise, we invest in companies with significant potential. According to him, "there is a little hesitant groups and business which will come on the market or are already, but at too high prices". On assignments, on the other hand, "some operations are still possible but it will be marginal."

Last year, LVMH has resold Ebel, Hine cognac and champagne Canard Duchêne and several licenses and small brands in cosmetics and perfumes. These divestments were accompanied by a valuation of 139 million, mainly related to Ebel, other business who surrendered "at about book value".

DFS and Sephora to straighten

The priority remains "to continue to improve profitability without acquisition", said Bernard Arnault has confirmed that he expected "again a great year and a very sensitive progression of results" in 2004. Greetings supported by organic growth of 7 of the turnover on the first two months of the year, while signs of recovery are multiplying to luxury, including Europe. Since January, the flagship of the group, Louis Vuitton brand, continued its progress to two digits. Only reservations relate to the evolution of exchange rates.

In 2003, the operating margin for the Group increased to 18 against 16 in 2002. It had fallen to 13 percent in 2001. The result of exploitation of 2.18 billion euros last year, has indeed increased 9 from 2002, despite the negative impact of EUR 300 million due to currency effects. At constant exchange rates, operating profit would have increased by 24. This overall improvement in profitability cache however developments contrasted according to branches.

The best surprise for analysts of JPMorgan, comes from selective distribution, with the output of Red DFS and Sephora in the United States. The result of exploitation of this pole, of 20 million euros in 2002, reached 106 million in 2003, or 3 of sales. This element rekindles speculation about a possible surrender of the two companies. Wines and spirits also saw their operating margin rise by 5 points to 38.

The group, Louis Vuitton flagship brand, has maintained its margin at record level of 45 in 2003. It plans to open 19 stores this year. The increase of 2 in the fashion and leather goods (32 margin) was however hampered by investments in Fendi and Donna Karan, according to Bernard Arnault. "It will take two to three years in those two marks to be significantly profitable", he said, while some progress has been made in Marc Jacobs, and Celine and the site of sale Internet e-Luxury. In perfumes and cosmetics (8 margin), Guerlain has also returned to profit.

Deficit in jewellery

However, exploitation in the watches and jewellery deficit widened in one year, from 13 to 48 million euros. The balance is targeted for 2004, including through the sale of Ebel. The other activities of LVMH (including the media and the participation in De Beers) have accused a EUR 161 million operating loss. The restructuring will inevitably continue, and the decline in administrative expenses (reduced by 15 in 2003). Investment promotion and advertising will be on the other hand "driven" in 2004 for the flagship of the Group brands, to accompany the launch of products and the conquest of new geographic markets.