Passionate about creativity
ANNUAL REPORT 2010
02 CHAIRMAN’S MESSAGE
06 FINANCIAL HIGHLIGHTS 08 INTERVIEW WITH ANTONIO BELLONI : THE AUTHENTICITY OF OUR BRANDS LINKING HERITAGE AND MODERNITY 10 CORPORATE GOVERNANCE 12 THE LVMH SHARE
14 REVIEW OF OPERATIONS 16 24 32 40 46
Wines & Spirits
FASHION & LEATHER GOODS
Perfumes & Cosmetics
Watches & Jewelry
52 SUSTAINABLE DEVELOPMENT 54 Exchanging, sharing, moving forward 55 Human Resources LVMH – a magic alchemy between the future and tradition 63 Corporate sponsorship to support culture, youth and humanitarian action 64 Protecting the environment
71 CONSOLIDATED FINANCIAL STATEMENTS
Passionate about creativity
I am pleased to see that our concept of creation, our passion to take our products to the highest echelon of quality and our desire to offer an exceptional retail experience at our brands, perfectly fits our customers’ expectations.
2010: A GREAT VINTAGE FOR LVMH
The desire for excellence, the recognition of know-how and fine craftsmanship and the culture of authentic quality are enjoying significant growth throughout the world. This trend will remain prominent in the years ahead, opening up for us magnificent perspectives for the future.
OUR BUSINESSES GREW AT A REMARKABLE PACE IN 2010, WHICH RESULTED IN OUR GROUP BREAKING ALL ITS HISTORICAL RECORDS. THIS GROWTH CAME ALONGSIDE SHARPLY HIGHER RESULTS AND A FURTHER IMPROVEMENT IN OUR FINANCIAL POSITION. IT ALLOWED THE HIRING OF AROUND 18 000 EMPLOYEES AND SOME MAJOR INVESTMENTS FOR THE FUTURE. THE EXCELLENT PERFORMANCE OF THE LVMH SHARE PRICE REFLECTS THE QUALITY OF WHAT WE HAVE ACHIEVED AND INVESTORS’ CONFIDENCE IN OUR STRATEGY AND OUR FUTURE. A FUTURE UNDERPINNED BY OUR UNIQUE, EVER MORE VIBRANT HERITAGE. A FUTURE THAT WE ARE BUILDING ON SOLID FOUNDATIONS, AS WE PURSUE OUR LONG TERM VISION.
For several months, LVMH has enjoyed uninterrupted growth, to which all our business groups have contributed. It would be an over-simplification to suggest that this is due to the economic upturn alone. The Group’s performance is also, above all, the result of the relevance and consistency of our long term strategy. A strategy that we pursued, unchanged, throughout the recent economic crisis. The support of the enduring values of our star brands, creativity as an absolute imperative, the quest for perfection in our products, and our efforts to ensure an environment of excellence coupled with impeccable service at our stores form the wellspring of our success. To these we must also add the agility and the motivation of our organization which benefits from the hands-on enterprise culture of the men and women of our Group. It enables us to take the right decisions quickly, invest where needed and seize opportunities to increase our market share. And this applies just as much when global economies are shrinking as when they start growing again.
HIGHLY RESPONSIVE, WITH A VERY SELECTIVE APPROACH TO OUR MARKETS We are responsive to current growth in the world market, but we also take a very selective, long term approach. The two components of this strategy are reflected in a wide range of developments in 2010. Dom Pérignon – in a first for the industry – launched several exceptional vintages, all of which achieved critical acclaim, and used the excitement surrounding these remarkable launches as an opportunity to organize exclusive events celebrating Dom Pérignon’s prestigious heritage, which stretches all the way back to the seventeenth century. Louis Vuitton deployed its creativity and demonstrated its excellence across all product lines. The opening of the new Louis Vuitton Maison in London was one of the highlights of the year, an outstanding achievement which has enhanced both the appeal of the brand and the reputation of the British capital. In the perfumes and beauty domain, Christian Dior...