Louis Vuitton 2003 Annual Report Download - page 90

88 LVMH ANNUAL
REPORT 2003
★In 2003, LVMH successfully conti-
nued to improve its financial position
and lighten its balance sheet. Strong
cash flow from operations, asset dispo-
sals and, to a lesser extent, the decline
of the US dollar against the euro all
contributed to a tangible reduction in
net financial debt.
★At December 31, 2003, LVMH’s
consolidated balance sheet totaled 20.5
billion euros, down 4% compared to 21.4
billion euros at December 31, 2002.
★Investments and other fixed assets
totaled 12.6 billion euros, against 13.5
billion euros at the end of 2002; this
represented 61% of the balance sheet
total compared to 63% one year earlier.
★Tangible and intangible assets were
down at 11.0 billion euros compared to
11.7 billion euros at year-end 2002. This
was the result of moderated capital
expenditures, concentrated on the store
network and of disposals: Canard
Duchêne, Hine cognac, perfumes and
cosmetics licenses for Michael Kors,
Marc Jacobs and Kenneth Cole, etc., as
well as the impact of the US dollar’s
decline against the euro.
★Investments, treasury shares and
other non current assets were down
slightly to 1.6 billion euros, compared
to 1.8 billion euros one year earlier.
★Inventories remained stable at 3.4
billion euros, unchanged from Decem-
ber 31, 2002. The change reflects the
strength of year-end sales as well as the
favorable effect of foreign exchange
rates despite the continuing reconsti-
tution of Louis Vuitton, Moët & Chan-
don and Hennessy inventories.
★Cash and short-term investments
increased slightly to 1.1 billion euros,
compared to 0.9 billion euros one year
earlier.
★Group stockholders’ equity, before
appropriation of earnings, remained
stable at 7.0 billion euros. Minority
interests were also stable at 1.7 billion
euros. Pursuant to earlier agreements
and reducing off-balance sheet com-
mitments, additional minority interests
in Fendi were acquired in 2003. This
was offset by the minority contribution
to the DFS common stock increase in
March and by minority shareholders'
interest in annual earnings.
★Total stockholders’ equity and mino-
rity interests amounted to 8.8 billion
euros, representing 43% of the balance
sheet total.
★At the end of December, long-term
liabilities and deferred income taxes
totaled 5.7 billion euros, 4.4 billion
euros of which were financial debt.
Their relative weight in the balance
sheet remained unchanged at 28%.
★Long-term resources stood at 14.4
billion euros, and exceeded total fixed
assets.
★Current liabilities amounted to 6.1
billion euros at December 31, 2003,
compared to 6.6 billion euros at the end
of 2002, this being primarily due to the
reduction in short-term borrowings and
the current portion of long-term debt,
which stood at 2.1 billion euros compa-
red to 2.6 billion euros one year earlier.
The percentage of short-term liabilities
in the balance sheet total was down
slightly at 30% compared to 31% at the
end of 2002.
★At December 31, 2003, short and
long-term financial debt, net of short-
term investments and cash totaled 5.4
billion euros. This represented a gearing
of 62% compared to 73% at December
31, 2002.
★The debt reduction program initiated
at the end of 2001 with the disposal of
the Gucci equity stake therefore conti-
nued to make progress in 2003, as net
debt fell by 1.1 billion euros.
★After deducting the market value of
the equity stake in Bouygues and trea-
sury shares not allocated to option
plans, net debt totaled 5.0 billion euros
or 57% of stockholders’ equity and
minority interests.
★Long-term debt accounted for 80% of
the total net financial debt.
★Confirmed lines of credit totaled
approximately 4.4 billion euros. Only
0.7 billion euros were drawn at Decem-
ber 31, 2003. Thus, the amount of
undrawn confirmed lines of credit sub-
stantially exceeded the commercial
paper program, whose outstanding
amount was reduced to 0.4 billion euros
at December 31, 2003, compared to 1.4
billion euros one year earlier.