An outstanding first half performance for LVMH

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, achieved organic* sales growth of 14% in the first half of 2004. This growth accelerated in the second quarter to 19%. The Group reported consolidated sales of EUR 5 676 million in the first half of 2004, up 8 % over the same period last year, and up 16 % for the second quarter. Operating income** for the half grew by approximately 12% compared to the same period last year. It is worth noting: – Acceleration of sales growth in the second quarter, – Strong volume increase in champagne and cognac sales during the first half and an improvement in product mix, – Continued double-digit growth at Louis Vuitton, – Organic growth of 32% in Watches and Jewelry, – Continuation of the sustained high comparable store sales at Sephora in the US, – Strong sales growth at DFS in the first half, – Market share gains across all brands.

By business group, sales performance was as follows:

In million euros 1st half 2004 1st half 2003 Change
Reported Organic*
Wines & Spirits 912 797 + 14 % + 19 %
Fashion & Leather Goods 2 022 1 896 + 7 % + 11 %
Perfumes & Cosmetics 973 974 - + 7 %
Watches & Jewelry 235 210 + 12 % + 32 %
Selective Retailing 1 543 1 353 + 14 % + 21 %
Other activities and eliminations - 9 6 - -

* with a comparable structure and constant exchange rates

Wines & Spirits delivered organic growth of 19% during the first half. The quality of our product range and their premium positioning combined with innovative communications, has underpinned our pricing policy. Of particular note has been the very rapid development of Hennessy in China and Taiwan where the Group achieved exceptional growth. Fashion & Leather Goods achieved organic growth of 11% over the first half. Louis Vuitton continued to achieve double-digit sales growth and was particularly strong in the US and Asian markets. In Europe, the return of tourists has been matched by strong local demand. Sales to our Japanese clients continue to grow. The new lines of leather goods continue to achieve impressive sales momentum. Louis Vuitton continues with its dynamic and innovative spirit through the new collection of rigid bags, called Bellaix, and a complete jewelry line designed by Marc Jacobs. In Perfumes & Cosmetics, Christian Dior achieved good growth, particularly in Japan and in the make-up segment. The summer will be notable for the launch of Pure Poison, the new fragrance for women from Christian Dior, which will commence sales in the US before being introduced to European markets. Sales at Guerlain have been driven by the success of its recently launched L’Instant de Guerlain. The Watches & Jewelry business group continues to reap the benefits of innovation and brand portfolio rationalisation, achieving organic growth of 32% in the first half. TAG Heuer achieved very strong sales growth over the period and also grew market share. Zenith started off the year with a very strong performance in the US and Japan. DFS sales increased strongly in the first half thanks to the success of sales and marketing initiatives in its Galleria stores and the recovery in tourism. Sephora gained market share in France, notably due to its innovative products and services, new advertising campaigns and loyalty programs. In the US, Sephora continued its strong momentum. in particular achieved spectacular sales growth. The remarkable performance of Louis Vuitton, the favorable trends for the activities at Wines & Spirits and Parfums Christian Dior, the improvement in results at Sephora and DFS have enabled the Group to record operating income** growth of approximately 12% for the first half of 2004. This performance, which comes on top of growth of 4% recorded for the same period last year, illustrates the great appeal of our brands, which are making an ever deeper impression in the markets they serve. LVMH counts on its worldwide leadership, its innovation policy, the quality of its products and the talent of its teams to accelerate its development in a growing market. Over the second half, LVMH will focus on developing market share for its leading brands and on launching a number of new products. The first half performance allows LVMH to confirm its objective to record a significant increase in operating income for 2004.   * with a comparable structure and constant exchange rates. **  provisional and unaudited