LVMH delivers excellent results for the first half of 2005 – Profit from recurring operations up 11% – Net profit up 19%

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, achieved an 11% increase in profit from recurring operations during the first half of 2005, exceeding the one billion Euro mark for the first time to reach 1,090 million Euros. This performance is all the more noteworthy in view of the continued high negative impact caused by exchange rates. At constant exchange rates, the Group’s profit from recurring operations increased by over 25%. The Group share of net profit increased by 19% compared to the first half of 2004. This increase, largely attributable to the Group’s improved operating profitability, would have risen to 38% without the provision relating to the closure of the Samaritaine store for safety reasons. Bernard Arnault, Chairman and CEO of LVMH, commented: “Our performance during the first half of the year once again demonstrates the exceptional appeal of our brands as well as the effectiveness of our strategy. Thanks to a successful combination of these factors, we have been able to deliver both a double-digit increase in the Group’s profit from recurring operations and gains in market share. Revenue growth during the summer has continued the strong trend we saw at the beginning of the year. A number of product launches in conjunction with the growth of our core brands in high-potential markets should allow LVMH to continue its progress in the second half of the year. All these elements enable us to confirm our objective of a significant increase in profit from recurring operations in 2005.”

In million euros First half 2004 IFRS First half 2005 IFRS % change
Revenue 5 609 6 173 + 10 %*
Profit from recurring operations 982 1 090 +  11 %
Net profit (Group share) 469 559 + 19 %

*Organic sales growth of 12% (with comparable structure and exchange rates)

Highlights of the first half of 2005 were: • Double-digit organic revenue growth for the LVMH Group, • Market share gains for all our leading brands, • Double-digit organic revenue growth at Louis Vuitton, with a stable operating margin at an exceptional level, • Continued recovery in Watches & Jewelry, • Improvement in Selective Retailing results, • Third consecutive year showing a strong increase in cash flow from operations, which has risen 29% to 934 million Euros, • Marked negative currency impact for Wines & Spirits and Fashion & Leather Goods, offset by exceptional growth in these activities.

Profit from recurring operations, by business group:

In millions of Euros (IFRS) First half 2004 First half 2005
Wines & Spirits 343 321
Fashion & Leather Goods 626 654
Perfumes & Cosmetics 33 44
Watches & Jewelry (1) 14
Selective Retailing 70 119
Other activities and eliminations (89) (62)

Wines & Spirits: strong sales growth Wines & Spirits saw strong momentum in revenue, achieving organic revenue growth of 12% in the first half of 2005. Profit from recurring operations fell slightly in the first half compared to the first half of 2004 due to the negative currency impact. Dom Pérignon, Krug and Veuve Cliquot have progressed in all the key geographic regions, and Moët & Chandon enjoyed significant growth in Japan and Europe. Champagne activities also stood out for their remarkable commercial performance both in terms of volume and improvement in product mix. The Wine businesses continued to enjoy strong growth. Hennessy cognac confirmed its momentum with an 8% volume increase, notably in the high end ranges. This growth has been particularly strong in the United States and in China. Fashion & Leather Goods: impressive performance from Louis Vuitton Fashion & Leather Goods improved profit from recurring operations by 4% despite the strong currency impact. On a constant exchange rate basis, this result yields a double-digit increase. Louis Vuitton’s performance has been very sustained, notably in Asia and Europe. The policy of new product launches continued with the success of new lines, Monogram Cerises and Denim, which are in high demand throughout the world. The second half of 2005 will see the reopening of the brand’s flagship store on the Champs Elysées in Paris at the beginning of October. The beginning of the year has proved promising for Fendi, particularly with the success of its new collections of leather goods and the roll out of the new store concept. Marc Jacobs and Pucci are also progressing well. Perfumes & Cosmetics: success of new products With a clear progress in profit from recurring operations, Perfumes & Cosmetics has posted a very good first half of 2005. Parfums Christian Dior is growing more rapidly than the market, notably in Asia and Europe. Thanks to its continued policy of innovation, the brand has enjoyed increasing success in its three product lines: perfume, make-up and skincare. Guerlain is progressing, both in terms of revenue and profitability. The brand strengthened its position in luxury perfumery with the reopening of its historic boutique on the Champs-Elysées in the first half of the year. Finally, BeneFit continued to develop strongly in the US and achieved market share gains in Great Britain. Watches & Jewelry: growing profitability Watches & Jewelry, in line with its 2004 performance, continued its recovery. Having broken even last year, profit from recurring operations increased strongly. The creativity, commercial momentum and rigorous targeting of brand investments are all responsible for this performance. TAG Heuer continues to deliver excellent performance and win market share, notably in the US and Asia. Zenith reinforces its position in high end watch making. Chaumet continues to develop by strengthening its network of boutiques and capitalizing on the success of its Frisson collection. During the second half of 2005, Christian Dior will launch its new technically innovative collection, Christal. Selective Retailing: further improvement of results DFS fully benefited from developments in Asia, its primary market. The rapid increase in tourism is a key growth driver. The program of Galleria renovations and openings also contributed. Sephora continued to improve its operational margin while pursuing market gains. Sephora progressed in France and in the US. In the US, continued to record excellent performance. France launched its online retail internet site on June 30, 2005. Outlook for 2005 Revenue in July and August 2005 confirmed the continuation of the Group’s growth trend experienced since the beginning of the year. Revenue from Louis Vuitton in particular continued to see double-digit growth over the period. Despite unfavorable exchange rates, LVMH will continue to grow thanks to the Group’s global market leadership, its strategy of innovation, its numerous new product launches and its increasing market share. All the above factors allow the Group to confirm its objective of a significant increase in profit from recurring operations in 2005. Our policy of focusing on quality across our entire product ranges, combined with the dynamism and unparalleled creativity of our teams will enable us, once again in 2005, to reinforce LVMH’s global leadership position in luxury products. An interim dividend payment of 0.25 Euros will be paid on December 2, 2005.