China ‘rebound’ helps boost LVMH sales

LVMH’s (Moët Hennessy Louis Vuitton) wine and spirits division achieved revenue growth of 16% in 2015, driven by “strong momentum” in Europe, the US and Japan and continued “normalization” in China.

Releasing its 2015 full year statement yesterday, LVMH reported overall revenue of €35.7 billion in 2015, an increase of 16% over the previous year, with organic revenue growth up 6%.

Within its wine and spirits division, the group credited “progressive normalization of the situation in China” with helping it achieve sales of €1.603bn for 2015, up 6% on an organic basis, translating to reported revenue growth of 16%. Profit from recurring operations increased by 19%. Taking its other divisions into account, the group reported organic revenue growth of 6%, while profits from recurring operations grew by 19%.

Champagne was highlighted as having experienced strong growth in 2015, particularly throughout Europe, the United States and Japan. Hennessy meanwhile demonstrated “strong momentum” in the US across all ranges.

In China, the second half of the year was marked by a “rebound in revenue” in a year that has been characterised by continued destocking by distributors. Other spirits, Glenmorangie and Belvedere, achieved “sustained growth”.

While its wine and spirits business is showing positive growth, the group said its duty free business, DFS, is continuing to struggle against an “uncertain environment in Asia as a result of currency and geopolitical changes”. It said that while LVMH had benefitted in Japan from a boom in Chinese tourism, “significant cost containment efforts” were ongoing at DFS.

“The 2015 results confirm the capacity for LVMH to progress and gain market share despite economic and geopolitical uncertainty”, said Bernard Arnault, chairman and CEO of LVMH. “Revenue and operating profit reached new record levels. Commitment to excellence, a passion for quality and our capacity to innovate underpin our growth momentum and are all values epitomised by the Foundation Louis Vuitton and its emblematic building that welcomed over one million visitors in 2015.

“All our Maisons demonstrated outstanding flexibility in 2015. By adapting their strategies to global changes and by continuing to evolve, they have shown the creativity and entrepreneurship that drive them forward. In an uncertain economic environment, we can rely on the desirability of our brands and the agility of our teams to further strengthen in 2016 our leadership in the world of high quality products.”