With organic growth of 3%, the second quarter showed comparable regional trends to the first quarter, except in Japan, which had experienced particularly strong growth during the first quarter. Profit from recurring operations for the first half of 2014 was €2 576 million and current operating margin reached 18%. Negative exchange rate effects weighed strongly on the first half. Group share of net profit amounted to €1 509 million.

LVMH  Resilience 2Photo credits LVMH Moët Hennessy Louis Vuitton

What Luxury Chill?

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €14 billion in the first half of 2014, an increase of 3%. Organic revenue growth was 5% compared to the same period in 2013. The Group continued to grow in the United States and Asia. Europe demonstrated resilience despite a still challenging economic environment.

LVMH  Resilience On Fire  

Highlights of the first half of 2014 include:

  • Good resilience in Europe and continued growth in Asia and the United States,
  • Strong negative exchange rate effect, particularly on Fashion & Leather Goods and Watches & Jewelry activities,
  • Wines & Spirits’ performance impacted by continued destocking by distributors in China,
  • The qualitative development of Louis Vuitton, where profitability remains at an exceptional level,
  • Continued investment in the fashion brands,
  • Strong innovation momentum at Parfums Christian Dior,
  • Sustained investment in communication for Watches & Jewelry,
  • Excellent performance of Sephora and continued expansion plan of DFS,
  • Cash from operations before changes in working capital of €3.2 billion,
  • Net debt to equity ratio of 23% as of the end of June 2014.

Euro millions

First half 

First half 

% change
Revenue 13 632 14 009 + 3 %
Profit from recurring operations 2 713 2 576 – 5 %
Group share of net profit 1 577 1 509 – 4 %
Cash from operations** 3 282 3 214 – 2 %

*Restated to reflect the application of IFRS 10 and 11 on consolidation. 
** Before changes in working capital.

Revenue by business group:

Euro millions First half First half

% change

2013* 2014 Reported


Wines & Spirits 1 795 1 677 – 7 % – 1 %
Fashion & Leather Goods 4 711 5 030 + 7 % + 4 %
Perfumes & Cosmetics 1 804 1 839 + 2 % + 6 %
Watches & Jewelry 1 275

1 266

– 1 % + 3 %
Selective Retailing 4 198 4 382 + 4 % + 9 %
Other activities and eliminations (151) (185)
Total LVMH 13 632 14 009 + 3 % + 5 %

Restated to reflect the application of IFRS 10 and 11 on consolidation. 
** With comparable structure and constant exchange ratesThe structural impact, essentially linked to the integration of Loro Piana, is +2% and the exchange rate impact is -4%.

Profit from recurring operations by business group:

Euro millions

First half 

First half 

% change
Wines & Spirits 539 461 – 15 %
Fashion & Leather Goods 1 493 1 487 0 %
Perfumes & Cosmetics 200 204 + 2 %
Watches & Jewelry 155 107 – 31 %
Selective Retailing 412 398 – 3 %
Other activities and eliminations (86) (81)
Total LVMH 2 713 2 576 – 5 %

Restated to reflect the application of IFRS 10 and 11 on consolidation.

Wines & Spirits: continued destocking by distributors in China

The Wines & Spirits business group recorded a decrease in organic revenue of 1% in the first half of 2014. Profit from recurring operations stood at €461 million. This trend essentially reflects the performance of cognac in China, linked to destocking by distributors, which continued in the second quarter. The champagne business, with its fast growing prestige vintages, experienced a good start to the year. In an environment characterized by persistent uncertainty in Europe, the US market continued to enjoy good dynamics. The business group remained focused on its value strategy: firm pricing policy and strong innovation accompanied by sustained investments in brand communications and in developing its production capacity.

Fashion & Leather Goods: strong creative momentum at Louis Vuiton


The Fashion & Leather Goods business group recorded organic revenue growth of 4% in the first half of 2014. Profit from recurring operations was €1 487 million, stable in comparison to the same period of 2013, due to a strongly adverse exchange rate effect. Loro Piana experienced an excellent start to the year. Louis Vuitton continues its strong creative momentum with new artistic director, Nicolas Ghesquière, receiving an enthusiastic response to his first show. The innovations in leather goods are seeing strong success. Fendi benefited from the focus on its iconic bags, for which sales progressed strongly. Céline’s growth continues to be driven by the success of its leather goods and the rapid development of footwear. Several Céline flagship stores were opened around the world, particularly in London, Tokyo and Paris. Other brands, such as Givenchy, Berluti and Kenzo, continued to strengthen their positions.

Perfumes & Cosmetics: continuous innovation and increasing market share

The Perfumes & Cosmetics business group recorded organic revenue growth of 6%. Profit from recurring operations stood at €204 million. Propelled by the vitality of its flagship lines and the constant attention to quality of its products and their distribution, LVMH’s brands are demonstrating excellent dynamics and increasing market share. Parfums Christian Dior continued to benefit from the growth of its iconic perfumesJ’Adore and Dior Homme. The make-up segment also experienced sustained growth. Guerlain continues its progress with the ongoing success ofLa Petite Robe Noire and the rapid development of Orchidée Impériale and Abeille Royale. Benefit, Make Up For Ever and Fresh confirmed their excellent performance.

Watches & Jewelry: good performance of jewelry and sustained brand communication

In the first half of 2014, the Watches & Jewelry business group recorded organic revenue growth of 3%. The uncertainties linked to the economic environment continue to make multi-brand retailers prudent in their purchasing. The performance in the brands’ own boutiques exhibited significant growth. Bulgari benefited from positive momentum in jewelry. TAG Heuer focused on the development of its iconic lines. The decrease in profit from recurring operations, which stood at €107 million, is principally explained by a negative exchange rate effect, while investments in communications continue.

Selective Retailing: increasing market share for Sephora and continuing expansion and renovation program at DFS

The Selective Retailing business group recorded organic revenue growth of 9%. Profit from recurring operations was €398 million in the first half of 2014. DFS relies on growth of sales to Asian clientele in a context of a fall in spending by Japanese tourists due to the weakness of the Yen. Major expansion and renovation work at several airport concessions weighed on its profitability. Sephora continues its growth in all regions, with particularly remarkable performance in North America, the Middle East and Asia. The brand continues to strengthen its position in key markets. Online sales grew significantly, helped by a strengthened mobile offering. Sephora is proceeding with the expansion of its store network and has just opened its first flagship store in Indonesia.

Outlook 2014

Despite an uncertain European economic environment, LVMH will continue to gain market share thanks to the numerous product launches planned before the end of the year and its geographic expansion in promising markets, while continuing to manage costs.

Our strategy of focusing on quality across all our activities, combined with the dynamism and unparalleled creativity of our teams, will enable us to reinforce, once again in 2014, LVMH’s global leadership position in luxury goods.

An interim dividend of 1.25 Euro will be paid on December 4, 2014.

Limited review procedures have been carried out, the related report will be issued following the Board meeting.


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