Louis Vuitton 2008 Annual Report Download - page 72

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Comments on the consolidated balance sheet
LVMH’s consolidated balance sheet, which is shown on
page 68, totaled 31.6 billion euros as of December 31, 2008,
representing a year-on-year increase of 4.0%.
Non-current assets amounted to 21.1 billion euros, compa-
red to 20.3 billion at year-end 2007, thus corresponding to
67% of total assets, a proportion equivalent to that recorded
a year earlier.
Tangible and intangible fixed assets (including goodwill)
increased slightly to 19.0 billion euros from 18.2 billion euros
at year-end 2007. Brands and other intangible assets amoun-
ted to 8.5 billion euros, from 8.0 billion euros as of December
31, 2007. This change is primarily attributable to the acqui-
sition of the Swiss watchmaker Hublot, the initial consolida-
tion as of January 1, 2008 of the media group Les Echos,
acquired at the very end of 2007, and the effects of exchange
rate fluctuations on brands and other intangible assets reco-
gnized in US dollars, such as the DFS trade name, or in Swiss
francs, such as the TAG Heuer brand.
Goodwill decreased to 4.4 billion euros, from 4.8 billion euros
a year earlier. The positive impact of the goodwill recognized
on the initial consolidation of Les Echos, Hublot, and the
Dutch yacht builder Royal V
an Lent did not fully offset the
decline in goodwill recognized in relation to commitments to
buy back minority interests.
Property, plant and equipment amounted to 6.1 billion euros,
up from 5.4 billion euros at year-end 2007. This growth is
chiefly attributable to the levels of operating investments
made by Louis Vuitton, Sephora and DFS in their retail
networks and those of Hennessy and Moët & Chandon in
their production equipment as well as the impact of exchange
rate fluctuations, which together exceeded depreciation charges
during the year.
Investments in associates, non-current available-for-sale finan-
cial assets, other non-current assets and deferred tax amoun-
ted to 2.0 billion euros and are thus stable compared to 2007.
This stability results principally from the acquisition of a
45% stake in the Russian perfume retail chain Ile de Beauté
and the increase in deferred tax assets, offset by the consoli-
dation of the investment in Les Echos and the disposal of a
minority stake in the company Micromania.
Inventories and work in progress amounted to 5.8 billion
euros, compared to 4.8 billion euros at year-end 2007, reflec-
ting business growth, the continued replenishment of distilled
alcohol inventories for cognac, acquisitions made in 2008,
and the impact of exchange rate fluctuations.
Trade accounts receivable reached 1.7 billion euros, up from
1.6 billion euros at year-end 2007, mirroring revenue growth.
Cash and cash equivalents, excluding current available-for-
sale financial assets, decreased from 1.6 billion euros as of
December 31, 2007 to 1.0 billion euros.
The Group share of equity before appropriation of profit
increased to 12.9 billion euros from 11.6 billion euros at year-
end 2007. This improvement is due to the significant net
profit for the year and the positive change in the cumulative
translation adjustment resulting from the rise in the US dollar
against the euro, despite the payment of dividends in the
amount of 0.8 billion euros.
Minority interests advanced slightly, from 0.9 billion euros as
of December 31, 2007 to 1.0 billion euros, due to the share of
minority interests in net profit for 2008 after the distribution
of dividends, combined with the impact of the rise in the US
dollar on minority interests in DFS.
Total equity thus amounted to 13.9 billion euros and repre-
sented 44% of the balance sheet total, compared to 41% a
year earlier.
Non-current liabilities amounted to 11.1 billion euros as of Decem-
ber 31, 2008, including 3.7 billion euros in long-term borrowings.
This compares to 10.4 billion euros at year-end 2007, including
2.5 billion euros in long-term borrowings. This increase was prima-
rily due to the increase in long-term borrowings, partially offset
by the decrease in share purchase commitments, which comprise
the bulk of other non-current liabilities. The proportion of non-
current liabilities in the balance sheet total increased to 35%, up
from 34% a year earlier.
Equity and non-current liabilities thus amounted to 25.0 billion
euros, and exceeded total non-current assets.
Current liabilities amounted to 6.6 billion euros as of Decem-
ber 31, 2008, compared to 7.4 billion euros a year earlier, due
to the repayment of a significant portion of short-term borro-
wings, this despite the acquisitions made and the rise in trade
accounts payable resulting from the increase in purchases of
distilled alcohol for cognac. Their relative weight in the balance
sheet total decreased to 21%.
Long-term and short-term borrowings, including the market
value of interest rate derivatives, and net of cash, cash equi-
valents and current available-for-sale financial assets, amoun-
ted to 3.9 billion euros as of December 31, 2008, compared to
3.1 billion euros a year earlier, representing a gearing of 28%,
compared to 25% at year-end 2007.
Long-term borrowings represented more than 80% of total
net debt.
As of December 31, 2008, confirmed credit facilities amoun-
ted to more than 3.8 billion euros, of which only 0.4 billion
euros were drawn, which means that the undrawn amount
available was 3.4 billion euros. The Group’s undrawn confir-
med credit lines substantially exceeded the outstanding portion
of its commercial paper program, which amounted to 0.7
billion euros as of December 31, 2008.
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