Final Report LVMH

Topics: Investment, Financial ratio, Dividend yield Pages: 24 (8851 words) Published: March 18, 2015
FINANCIAL ANALYSIS AND
MANAGEMENT OF
INTERNATIONAL GROUPS
Marian BODENSTEDT
Laurens VAN POUCKE
Xander SAVENBERG
Olumide KOMOLAFE

42801
42803
42805
42825

EDHEC BUSINESS SCHOOL
Financial Analysis and Management of International Groups

1|F i n a n c i a l A n a l y s i s a n d M a n a g e m e n t o f I n t e r n a t i o n a l G r o u p s

ABSTRACT
Throughout this report written for the coursework of ‘Financial Analysis and Management of International Groups’ taught by Professor George Iatridis at EDHEC Business School, the LVMH Group will be thoroughly analysed and elaborately discussed. In order to be able to situate the analysis, we decided to compare LVMH with two of its industry competitors: Kering and Richmond.

LVMH is a French multinational luxury goods conglomerate based in Paris, listed on Euronext Paris, and a constituent member of the CAC40. The group is responsible for managing various high-end luxury brands situated in wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewellery and specialist retailing industries. A small collection of their most famous constituents can be found in the following:

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Wines and Spirits
 Dom Perignon
 Henessy
 Moet & Chandon
Fashion and Leather Goods
 Dior
 Louis Vuitton
Perfumes and Cosmetics
 Parfums Christian Dior
 Parfums Givenchy
Watches and Jewellery
 Bulgari
 De Beers Diamond Jewellers
 TAG Heuer

The position and strategy of LVMH as a luxury brand conglomerate, its risk profile and capital structure is discussed in the following. Furthermore, the market and financial position is analysed and the position relative to its competitors elaborated. One main focus of this report is further set on the friendly acquisition of the Bulgari brand in March 2011.

CONTENTS
A.

Senior Management Summary ....................................................................................................................... 3

B.

Capital Structure and Financial Strategy ........................................................................................................ 4

C.

Dividend policy ............................................................................................................................................... 6

D.

Capital Investment Process ............................................................................................................................ 7

E.

Risk Report ..................................................................................................................................................... 9

F.

Debtor, Creditor and Working Capital Management ................................................................................... 11

G.

Business Strategy.......................................................................................................................................... 13

H.

Acquisitions .................................................................................................................................................. 14

I.

Investment Ratios......................................................................................................................................... 17

J.

Efficiency Suggestions .................................................................................................................................. 19

2|F i n a n c i a l A n a l y s i s a n d M a n a g e m e n t o f I n t e r n a t i o n a l G r o u p s

A. SENIOR MANAGEMENT SUMMARY
Write a report for senior managers on how they could improve the company’s financial performance and achieve the primary business goals, such as profit and shareholders’ wealth maximization. [Objective] Discuss the key performance indicators presented by the company in the annual report and its main business objectives. Give advice as to how these indicators could improve and...
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