greater china other asian countries middle east latin
TRANSCRIPT
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AnnualShareholdersMeeting
May 15, 2008
Bernard Arnault
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Excellent performance in 2007
Further strengthen our foundations in 2007despite a difficult currency environment
Strong organic revenue growth of 13 %
Solid progress in historical markets
Strong momentum in emerging countries
Profit from recurring operations up 12%
Double-digit growth for all business groups
At constant exchange rates,profit from recurring operations up 20 %
Further increase of current operating margin to 22 %
Cash flow from operations grew 15 %
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Well-balanced contributionfrom all business groups
Strong vitality of major brands
New star brands increased momentum and continuedto improve their profitability
Rapid development in emerging countries benefitedall business groups
Powerful Wines and Spirits brands reinforcedtheir value creation strategy
New record year for Louis Vuitton, which continues to generateexceptional level of profitability
Market share gains for TAG Heuer, Parfums Christian Diorand Sephora
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AnnualShareholdersMeeting
Jean-Jacques Guiony
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(252)(53)Net financial income (expense)
+7%(5 752)(5 364)Selling expenses
+8%(1 388)(1 289)Administrative expenses
+8%2 0251 879Group share of net profit
+12%3 4293 052Operating profit
(126)(120)Other income and expenses
+12%3 5553 172Profit from recurring operations
+9%10 6959 825Gross margin
+8%16 48115 306Revenue
Change %20072006In millions of euros
Summarized income statement
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Profit from recurring operationsincreased 12 %
+ 12%3 5553 172LVMH
-(168)(125)Others and eliminations
+ 10%439400Selective retailing
+ 76%14180Watches & Jewelry
+ 15%256222Perfumes & Cosmetics+ 12%1 8291 633Fashion & Leather Goods
+ 10%1 058962Wines & Spirits
Change %20072006In millions of euros
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In millions of euros
3 172+ 638 - 255 3 555
2006 2007
Operationalimprovements Currencyimpact*
* incl.: Fashion and Leather Goods: -148M Wines & Spirits: -50M
Profit from recurring operations
increased 20 % at constant currency
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LiabilitiesDec. 31, 2007
30.7 30.7
Assets
In billions of euros
Non currentassets
InventoriesOther currentassets
66%41%
34%
25%16%18%
Total equity
Non-currentliabilities
Currentliabilities
Strong progress in equity
Rise in inventory level Increased business
Constitution of cognac inventories
Net financial debt reduction
Solid financial structure
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In millions of eurosNet debtTotal equity
41% 29% 25%Gearing
Dec. 31, 2007
3 094
12 528
Dec. 31, 2005
4 318
10 484
Dec. 31, 2006
3 400
11 594
Net debt and equity
12
60
80
100
120
140
160
180
200
220
240
S1 2003 S2 2003 S1 2004 S2 2004 S1 2005 S2 2005 S1 2006 S2 2006 S1 2007 S2 2007
LVMH CAC 40
Share price performance since 2003
2005 2006 2007
Share price base 100 at January 1, 2003
LVMH : +111%
Source: JCF Group
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2007 Dividend increased 14%
Net dividend per shareIn euros
2004
0.850.95
1.15
1.40 1.60
2003 2005 2006
+22%+21%
+12%
2007
+14%
AnnualShareholdersMeeting
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Bernard Arnault
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Results of the LVMH shareholder survey
LVMH strategy and perspectives
Development in emerging countries
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An ambitious and consistent strategy
Prioritize investment in star brands
Grow other brands and raise their status
Reinforce our presence in historical markets
Adapt to the development of emerging clientele
Continue to focus on internal growth
STRATEGY AND PERSPECTIVES
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Social and environmental policy
A dynamic social policy
Develop excellent teams
Perpetuate our rare and demanding savoir-faire
Promote corporate social accountability
Strong commitment to protecting the environment
Preserve our natural resources and design environment-friendly products
Some initiatives within the Group: ISO 14001 certification and carbon footprint assessment for several brands Louis Vuitton HEQ (High Environmental Quality) logistic warehouse Development of eco-design (stores/packaging)
Integrated grape growing (viticulture raisonne)and protection of biodiversity strengthened
STRATEGY AND PERSPECTIVES
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Organic revenue growth
in the first quarter of 2008: +12%
Double-digit organic revenue growth continued in Q1 2008
Another exceptional performance by Louis Vuitton
Strong growth momentum at Sephora, Parfums Christian Diorand TAG Heuer
Double-digit revenue growth in US (in $) and Asia
STRATEGY AND PERSPECTIVES
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An unfavorable currency environmentand an uncertain economic climate
Sustained innovation
Effective communication Development of new clientele
Continued focus on productivity improvement
Expansion of store network
2008 : continue to gain market share
Objective of tangible growth in 2008 results
STRATEGY AND PERSPECTIVES
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AnnualShareholdersMeeting
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2003 2007
Greater China
Other Asian countries
Middle East
Latin America
Central and EasternEurope
An important growth driver for the GroupDEVELOPMENT IN EMERGING COUNTRIES
Evolution of LVMH Groups revenuein emerging countries
X 2
As a % of total Group revenue 17 % 25 %
2 bil.
4 bil.
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A strong presence of LVMH in emerging countries
41%
44%
4%
5%
6%
Greater China
Other Asian countries
Middle East
Latin America
Central and EasternEurope
LVMH store networkin emerging countries445 stores at end 2007
Exceptional ability of LVMHto attract customers of all origins
DEVELOPMENT IN EMERGING COUNTRIES
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Excellent growth outlook for LVMH
Buoyant macroeconomic environments
Increasing appeal of luxury productsto clientele from emerging countries
Pioneering expansion strategy of LVMH,
adapted to local culture and context Powerful and strong visibility of our brands
Talented teams
LVMH well positioned to fully benefitfrom development in emerging countries
DEVELOPMENT IN EMERGING COUNTRIES
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AnnualShareholdersMeeting
Joint Auditors reportsto the AnnualShareholders Meeting
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Reports on the Financial Statements
Opinion on consolidated and parent companyfinancial statements () true and fair view of the financial position of the parent
company and the Group () and the results of their operationsfor the period ()
(1st and 2nd resolutions)
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Special Report on Related Party Transactions
Agreements authorized during the year Amendment to the service agreement entered into
with the company Groupe Arnault SAS
Agreements authorized in previous years havinga continuing effect during the year
(3rd resolution)
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Other Special Reports
Authorization to reduce the share capital No matters to report on the reasons and conditions thereof
Authorization to grant existing or future shares for noconsideration to employees and company officers No matters to report on the proposed methods
(11th and 12th resolutions)
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Other Special Reports
Authorization to issue shares and marketable securitieswith cancellation of preferential subscription rights
No matters to report on the proposed methods subject to laterexamination of issue terms
Advice on cancellation of preferential subscription rights will begiven at the time of the issue price setting
Additional report on the conditions when the transaction takesplace
(13th and 14th resolutions)
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Other Special Reports
Authorization to increase the share capital withcancellation of preferential subscription rights reservedfor employees members of a company savings scheme
No matters to report on the proposed methods subject to laterexamination of issue terms
Advice on cancellation of preferential subscription rights will begiven at the time of the issue price setting
Additional report on the conditions when the transaction takesplace
(15th resolution)