The LVMH group displays “cautious confidence” for 2021



“Resilience” is all the rage. Often used to describe how companies were able to cope with the pandemic, the word was used by the management of luxury giant LVMH on Tuesday, January 26, on the occasion of the presentation of its financial results. In 2020, the group saw its turnover decline to just under 45 billion euros, a decrease of 17% compared to 2019.

A drop of only 4% in Asia excluding Japan

Our “houses” have shown agility », Declares Bernard Arnault, the group’s president. No more than anyone else, he could not have imagined the year so confusing the world has passed. At the end of the presentation of the results of the year 2019 a year ago, while the echoes of an epidemic rustled more and more insistently, in China, the billionaire had confided that the group would easily overcome the crisis to come if it was resolved ” in two months “. ” Longer, we should see », Then added the leader.

In 2020, the group therefore “saw”, among other things, its net profit decline by 34% to 4.7 billion euros. Its operating margin is 18.6%, against 21.4% the previous year. Signs of a rebound at the end of the year, however, allow the group to post a ” cautious trust »For the year 2021.

This hope comes from signs of recovery coming, at the end of 2020, from its two largest markets, Asia excluding Japan (34% of its sales, compared to 30% in 2019), and the United States ( 24% of sales). In terms of income, those from Asia excluding Japan fell only 4% in 2020, while those from Europe fell by 28%.

Good resistance of fashion and leather goods

True to form, the group has not broken down its revenues by brands but by division. The wine and spirits sector saw a drop in revenues of 14% this year. The closure of restaurants and nightclubs had a strong impact on the sale of wines and champagnes. But Hennessy cognac has, among other things, benefited from strong support for demand, particularly in the United States.

Several former Hermès employees tried for counterfeit bags

It is thanks to its largest division, fashion and leather goods, that LVMH has held up well this year. Revenues there only fell 3% between 2019 and 2020, although some stores closed for several months. But from April in China and from July in the United States, the recovery was felt.

It was supported by digital sales, explains Chris Hollis, director of financial communications. The two main houses, Louis Vuitton and Christian Dior, have been particularly creative in renewing their customer relationships.

Testifying to the vitality of these two locomotives in the division, the famous leatherworker has opened a new workshop in Vendôme (Loir-et-Cher) and Christian Dior, a store on rue Saint-Honoré.

Selective distribution suffered more

The watches and jewelry division saw its revenues fall by nearly 23%, and that of perfumes and cosmetics, in the same proportions. The latter suffered more than the others from store closings, although there too signs of improvement were recorded in the second half of 2020.

The selective distribution division, which includes DFS, the banner present in tax-free areas at airports, suffered more severely from the crisis, recording a 30% drop in revenues, due to a sharp drop in international traffic. The chain of Sephora or the venerable Bon Marché resisted more, testing like all traders the virtues of “click and collect” to maintain activity.

Dividend of six euros per share

LVMH will propose, at its general meeting scheduled for April 15, a dividend of six euros per share », Announced Jean-Jacques Guiony, the group’s financial director. That paid in 2020 was only € 4.8, due to the health crisis.

The coming year should allow the rapid integration of the jeweler Tiffany, a new nugget of the group, finally bought for thirteen billion dollars from its American owner at the end of last year.

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