Louis Vuitton 2009 Annual Report Download - page 76

Comments on the consolidated balance sheet
LVMH’s consolidated balance sheet, which is shown on page 72, tota-
led 32.1 billion euros as of December 31, 2009, representing a year-
on-year increase of 2.0%..
Non-current assets amounted to 21.1 billion euros, equivalent to the
level recorded as of December 31, 2008, thus corresponding to 66%
of total assets, slightly lower than the proportion a year earlier.
Tangible and intangible fixed assets (including goodwill) increased
slightly to 19.1 billion euros from 19.0 billion euros at year-end 2008.
Brands and other intangible assets amounted to 8.7 billion euros,
up from 8.5 billion euros as of December 31, 2008. This increase is
primarily attributable to the acquisition of a 50% stake in the presti-
gious winery Château Cheval Blanc, the valuation of the Royal Van
Lent brand, and the impact of exchange rate fluctuations on brands
and other intangible assets recognized in US dollars, such as the
DFS trade name and the Donna Karan brand.
Goodwill decreased to 4.3 billion euros, from 4.4 billion euros a year
earlier. The goodwill recognized on the initial consolidation during
the year of Château Cheval Blanc and the Montaudon champagne
house did not fully offset the decline in goodwill recognized in relation
to purchase commitments for minority interests.
Property, plant and equipment increased slightly to 6.1 billion euros.
This growth is chiefly attributable to the levels of the Group’s operating
investments made by Louis Vuitton, Sephora and DFS in their retail
networks as well as those made by Parfums Christian Dior in new
display counters and production facilities, together with those made
by Hennessy and Veuve Clicquot in their production facilities,
and to changes in the scope of consolidation, which exceeded the
depreciation charge for the year and the effects of foreign currency
fluctuations.
Investments in associates, non-current available for sale financial
assets, other non-current assets and deferred tax amounted to 2.0
billion euros and were thus stable compared to 2008.
Inventories and work in progress amounted to 5.6 billion euros,
compared to 5.8 billion euros at year-end 2008, reflecting inventory
reduction efforts undertaken in 2009 and the impact of exchange
rate fluctuations, despite the acquisitions made or initially consolidated
in 2009.
Trade accounts receivable amounted to 1.5 billion euros, down from
1.7 billion euros at year-end 2008.
Cash and cash equivalents, excluding current available for sale finan-
cial assets, increased significantly from 1.0 billion euros as of Decem-
ber 31, 2008 to 2.4 billion euros.
The Group share of equity before appropriation of profit increased
to 13.8 billion euros from 12.8 billion euros at year-end 2008. This
improvement is due to the significant amount of the Group’s share
of net profit for the year, despite the negative change in the cumulative
translation adjustment resulting from the fall in the US dollar against
the euro, and the payment of dividends in the amount of 0.8 billion
euros in 2009.
Minority interests remained stable at 1.0 billion euros as a result of
the share of minority interests in the net profit for the year after the
distribution of dividends, and the impact of the depreciation of the
US dollar on minority interests in DFS.
Total equity thus amounted to 14.8 billion euros and represented
46% of the balance sheet total, compared to 44% a year earlier.
Non-current liabilities amounted to 11.3 billion euros as of December
31, 2009, including 4.1 billion euros in long term borrowings. This
compares to 11.1 billion euros at year-end 2008, including 3.7 billion
euros in long term borrowings. This increase was primarily 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 remained unchanged at 35%.
Equity and non-current liabilities thus amounted to 26.1 billion euros,
and exceeded total non-current assets.
Current liabilities amounted to 6.1 billion euros as of December 31,
2009, compared to 6.6 billion euros at year-end 2008, owing to
reductions in trade accounts payable resulting from the entry into
effect of the French Law on the Modernization of the Economy and
the repayment of a portion of short term borrowings. Their relative
weight in the balance sheet total decreased to 19%.
Long term and short term borrowings, including the market value of
interest rate derivatives, and net of cash, cash equivalents and current
available for sale financial assets, amounted to 3.0 billion euros as
of December 31, 2009, compared to 3.9 billion euros a year earlier,
representing a gearing of 20%, compared to 28% at year-end 2008.
Cash and cash equivalents exceeded short term borrowings.
As of December 31, 2009, confirmed credit facilities amounted to
4.0 billion euros, of which only 0.2 billion euros were drawn, which
means that the undrawn amount available was 3.8 billion euros. The
Group’s undrawn confirmed credit lines substantially exceeded the
outstanding portion of its commercial paper program, which amoun-
ted to 0.2 billion euros as of December 31, 2009.
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