LVMH exceeds market expectations in first half

Emerging markets contribute 36%

French luxury products group LVMH has exceeded market expectations with first-half 2011 sales up 13% at €10.2bn. Emerging markets contributed 36% to total sales. Net profits went up 25% to €1.3bn.

The group's market capitalisation was around €25.4bn some three years ago and has now risen to €66bn after an increase of 38% in the last year alone.

LVMH's cosmetics and perfumes operations achieved organic growth in the first half of 11%. The reported increase was 5% to €1.5bn. However, profits from recurring operations posted zero growth and remained stuck at €181m.

Christian Dior was able to continue its momentum, helped especially by sales of J'adore and Miss Dior as well as sales of its new lipstick line Dior Addict. The skin care segment's sales were marked by the success of Capture. Guerlain posted a good performance after the launch of Shalimar Parfum Initial and rapid growth was reported from Orchidee Imperiale. Givenchy's Play perfume also put on rapid growth and profits from both men's and women's versions.

The group's selective distribution sector was sustained by the strong growth of Asian tourism. Sephora expanded its stores’ modernisation programme and increased its share in the Ile de Beaute brand to 65%.

The company has said that while the global market is experiencing strong growth, the monetary environment remains uncertain. A number of product launches are planned before the year-end but cost management will remain a clear point of focus.

LVMH also announced an increase in its stake in the Hermes group to 21.4%. Finance director of LVMH, Jean-Jacques Guiony, said that during first half 2011 the company had increased its holding.

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