annual shareholders’ meeting€¦ · • weconducted our audit in accordance with generally...
TRANSCRIPT
![Page 1: Annual Shareholders’ Meeting€¦ · • Weconducted our audit in accordance with generally accepted auditing standards • Consolidated and parent company financial statements:](https://reader034.vdocuments.us/reader034/viewer/2022042414/5f2e1a6f59f1645c144b1d24/html5/thumbnails/1.jpg)
Annual Shareholders’Meeting
May 15, 2003
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Bernard ARNAULT
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• Gained market share
• Improved profitability
• Increased cash flow
• Reduction of debt
2002 : A winning strategy
2002 objectives exceeded in operating income and debt reduction
2002 objectives exceeded in operating income and debt reduction
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Patrick HOUËL
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Net Sales 12 229 12 693 +4%
Gross margin 7 575 8 130in % sales 62% 64%
Marketing & selling expenses (4 568) (4 705) +3%General & Admin expenses (1 447) (1 417) -2%
Operating income 1 560 2 008 +29%
Financial expenses (459) (294)Other income & expenses (455) (405)Income taxes (192) (350)
Net income beforegoodwill amortization 334 818 +145%
Unusual items (156) -
Key figures
2001 2002In millions of Euros % growth
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+12%
+16%
+6%Europe
United States
Japan
Sales growth in local currency
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Operating income by business group
Wines & Spirits 676 750 33%
Fashion & Leather Goods 1 274 1 297 31%
Perfumes & Cosmetics 149 161 7%
Watches & Jewelry 27 (13) -2%
Selective retailing (213) 20 1%
Other (353) (207) -
LVMH 1 560 2 008 16%
In millions of EurosMargin %
20022001 2002
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2001 2002* excluding real estate
Targeted investments*
Wines & Spirits
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Selective Retailing
594
479
In millions of Euros
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Record cash flow from operations
481
1214
919
1518
1051
1998 1999 2000 2001 2002
• Record level in 2002• +65 % vs 2001• +25 % vs 2000
In millions of euros+65%
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Cash flow
Cash flow from operations 919 1 518 +65%
Working capital variation (345) 436
574 1 954
Capital expenditures (984) (559) -43%
Operating cash flow (410) 1 395(after Cap. exp.)
In millions of Euros 2001 2002 %
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31/12/02 31/12/0231/12/0131/12/01
21.423.8
13.5
3.4
4.5
14.3
3.7
5.8
63%
16%
21%
60%
16%
24%
23.821.4
8.841%
6.028%
6.631%
8.737%
7.130%
8.033%
Lightened balance sheetIn billions of Euros
Stockholders’equity
& minorities
Long-termliabilities
Currentliabilities
Investment andother assets
Inventories
Other currentassets
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• Debt and gearing reduction objectives exceededat end-2002• Net debt of EUR 5.8 billions at Dec. 31,2002• Gearing of 66% at Dec. 31, 2002
• New debt reduction in 2003
Improved financial condition
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Significant decline in debtReduction of interest ratesSignificant decline in debtReduction of interest rates
Strong reduction in financial expenses
459
294
2001 2002
In millions of Euros
- 36%
Net Financial Expenses
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EUR / USD 0.90 0.92 1.02
% cover 77% 43%
EUR / JPY 103 113 119.1
% cover 70% 38%
2002 2003 2004
At May 6, 2003
Protection against currency fluctuations
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May 15, 2003
Annual Shareholders’Meeting
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Report of Statutory Auditors
Ordinary : 3 reports
Extraordinary : 5 reports
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Reports on financial statements - consolidatedand parent company (First and second resolutions)
• We conducted our audit in accordance with generallyaccepted auditing standards
• Consolidated and parent company financial statements:• « (…) are true and sincere and fairly present the financial
position, and the results for the period…. »
• Directors’ report• « … we noted nothing that could lead us to believe that such
information is not fairly stated in the Directors’ report... »
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Approval of the regulated agreements (Third resolution)
• Agreements authorised during the period:• Service agreements
• Assistance agreements
• Agreements previously authorised :• Office rental agreements
• Allocation of Holding company expenses
• Complimentary retirement agreements for ExecutiveCommitee members
• Guarentee commitments
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Capital reduction through cancellationof treasury shares (Thirteenth resolution)
• Capital reduction through the cancellation of treasuryshares acquired on the market
• No observation on the reasons and the conditions of the capital reduction envisaged
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Capital increase(Fourteenth, Fifteenth and Sixteenth resolutions)
• Proposal for the issuance of shares or any security(issue price unfixed)
• Proposal for the elimination of the shareholders ’pre-emptive subscription right (issue price unfixed)
• Proposal for a capital increase dedicated to employees (issue price unfixed)
• No observation on the terms and conditions
• Complimentary reports at the time of the issuance
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Options for New or Existing Shares(Seventeenth resolution)
• Proposal to grant options to purchase new or existingshares to employees or officers of the Group
• No observation on the terms and conditions
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Bernard ARNAULT
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Results of the LVMH shareholder consultation
• LVMH strategy
• LVMH perspectives
• LVMH and its stakeholders
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LVMH strategy
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LVMH strategyPriority on internal growth
• Concentration on development of our Star brands • New products launches
• Expansion of network
• Development of new markets
• Continue to provide for brands with strongpotential
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LVMH strategy Improve profitability
• Continue growth in profitability of major brands
• Improve profitability of activities in developmentphase• DFS
• Sephora
• Watches & Jewelry
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LVMH strategy Priority to increasing cash flow
• Target investments
• Disposal of non-strategic assets
• Reduction of debt
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LVMH perspectives
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• Good start to the year• Sustained organic sales growth in Q1 2003 : +6 %• Exceptional performance of Louis Vuitton
• Strong reactivity of LVMH to recent events
• Maintain a selective investment strategy
• Continue to dispose of non-strategic assets
• Rigorous financial discipline
• Hedging program
• Priority to increasing cash flow
• Further reduction in debt and financial expenses
2003: LVMH well positioned to confront an uncertain environment...
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2003 : … and to improve market share
• New products launches• New Louis Vuitton products created
by Marc Jacobs
• New watch by Zenith
• New perfumes by Guerlain, Givenchy, Kenzo
• New beauty care products by Dior …
• Selective expansion of network(new shops and renovations)
• Development of markets with strong potential(China, Russia, Corea, India)
Tangible improvement inoperating income in 2003Tangible improvement inoperating income in 2003
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LVMH and
its stakeholders
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LVMH share performance
Since January 1, 2002 -14% -34% +29%
Over 5 years (since 1/1/98) +43% +3% +38%
PERFORMANCE AT 31/12/2002 LVMH CAC 40 Outperformance
of LVMH
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2002 Dividend : An increase of 7%
1998 1999 2000 2001 2002
0.927
1.1251.125
Dividend* in Euros(incl « avoir fiscal » tax credit)
1.02
* Figures have been adjusted to reflect the five for -one-stock split of July 2000 and the bonus share distribution (one new share for ten held on this date) of June 1999.
1.20
Dividend yield: 3 % in 2002Dividend yield: 3 % in 2002
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Corporate governance
• Adoption of a new ethical chart
• 2 new independent directors
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Strengthening shareholders’ information
• Renewed information sources• A new and more user-friendly version of our web site
• Numéro vert (0800 010 000)
• A new shareholders’ guide
• Shareholders’ Club
• Publication of a long term debt rating by Standard & Poors
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LVMH commitment for environment
• Implementation of LVMH’s environmental charter in each company of the Group
• Many actions taken in common with its stakeholders : other industrial organisations, associations and local communities
• Continuation of initiatives to protect the environment
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LVMH : A societal policy
• A dynamic social policy• Creating industrial employment in France
• Development of craftsman know-how
• Customised training programs
• A diversity of professional career opportunities
• A balanced representation of women and men
• A strong policy of internal communication
• Sponsorship of children, medical research and humanitarian causes
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Conclusion : LVMH well placed to increaseits lead in the luxury goods market
• Worldwide leader in the luxury goods sector
• Unique portfolio of brands
• High quality, highly creative products
• Proven strategy
• Diverse businesses
• Good geographic balance of sales
• Strong, talented and reactive teams
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May 15, 2003
Annual Shareholders’Meeting
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Questions / Answers
May 15, 2003
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Annual Shareholders’Meeting
May 15, 2003
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Resolutions
May 15, 2003
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Annual Shareholders’Meeting
May 15, 2003