Louis Vuitton 2003 Annual Report Download - page 5

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sector ; the success of Sephora, which achie-
ved its goal of profitability in the United Sta-
tes ; the productivity gains at DFS, which lead
to profitability ; the evolution of very promi-
sing brands such as Celine, Marc Jacobs, Pucci
and BeneFit, which all achieved double-digit
organic sales growth….. Aside from the Wat-
ches and Jewelry business group which is in a
strategic planned phase of investment and
brand repositioning, all our business groups
contributed to LVMH’s strong growth in ope-
rating margin from 16% to 18%.
REI NFORCED MARKET LEADERSHIP
Our growth has been accelerated by a num-
ber of factors, among which are new product
launches, store openings and increased
investment in communications, as well as by
the advances made by our brands in those
markets with significant potential for luxury
products. Together, these developments have
enabled LVMH to increase its competitive
advantage and reinforce its leadership posi-
tion within the sector.
At a time when the global climate is begin-
ning to pick up momentum – the US eco-
nomy is growing, positive indicators are
visible in Europe and global tourism is impro-
ving – LVMH enters 2004 in an excellent posi-
tion to fully benefit from the economic
recovery.
A CONTINUOUS QUEST FOR EXCELLENCE
SUSTAINED ORGANIC GROWTH, GAINS IN MARKET SHARE, STRONG GROWTH
IN OPERATING MARGIN, A 30% INCREASE IN NET INCOME AND A STRENG-
THENED FINANCIAL STRUCTURE: LVMH PERFORMED REMARKABLY WELL
AGAINST THE BACKDROP OF AN EXTREMELY UNCERTAIN GLOBAL CLIMATE
DURING 2003. WITH GREAT CONFIDENCE IN ITS STRATEGY AND ABILITY
TO ADAPT TO THE DYNAMIC COMMERCIAL ENVIRONMENT, THE GROUP WILL
CONTINUE ITS QUEST FOR EXCELLENCE IN 2004.
Compared to the 2003 performance of the
luxury sector in general, the results achieved
by LVMH reflect not only the effectiveness of
its strategy and the strength of its brands, but
also the flexibility and responsiveness of its
teams, which continue to operate in a chal-
lenging environment. This performance is a
consequence of the priority placed on inter-
nal growth and profitability, the development
of our brands around the dual goals of inno-
vation and quality, and the conquest of new
markets. It is also the result of the flexibility
of our organisation and the talent of those in
the Group, who have demonstrated remarka-
ble rigour in executing the Group’s strategy
on the ground, together with their commer-
cial drive and determination in the pursuit of
excellence.
STRONG GROWTH IN OPERATING MARGI N
Among our achievements, of particular note
are the strong improvement in operating mar-
gin at Wines and Spirits, which continues to
increase the value of its brands and the power
of its distribution networks ; the exceptional
performance of Louis Vuitton, which has, once
again, beaten its sales records around the
world, including achieving US sales growth of
38% in dollar terms ; the momentum of Perfu-
mes and Cosmetics, performing better than its
3
PASSIONATE ABOUT
CREATIVITY