Luxury giant LVMH Moët Hennessy Louis Vuitton posted revenue of €44.7 billion in 2020, down by -17% year-on-year. Organic revenue declined by -16% compared to 2019.
Profit from recurring operations, which amounted to €8.3 billion in 2020, declined by -28% over the year with a return to growth in the second half, which was up +7%. Group share of net profit amounted to €4.7 billion, down -34%.
The company said that its business showed “good resilience in an economic environment severely disrupted by the serious health crisis that led to the suspension of international travel and the closure of the group’s stores and manufacturing sites in most countries over a period of several months”.
Group-wide LVMH posted an organic revenue decline of only -3% in the fourth quarter, with “a significant improvement” in trends in all its activities compared to the first nine months of 2020. Fashion & Leather Goods reported double-digit growth in both the third and fourth quarters. While Europe is still affected by the crisis, the US saw a good recovery and Asia grew strongly in Q4.
In Selective Retailing, which includes travel retailers DFS Group and Starboard Cruise Services, revenue declined by -31% in 2020 (organic revenue -30%). Last year’s €1,395 million in profit from recurring operations turned to a loss of €203 million in the division.
LVMH said: “DFS saw a significant decline in its activity in most destinations due to the total suspension of international travel. While Hong Kong continues to feel the impact of the pandemic strongly, Macau saw improved trends in the latter part of the year. New services are being developed for its local customers and online sales have strengthened.”
The Wines & Spirits business group saw its organic revenue decline by -14% in 2020. Profit from recurring operations was down -20%.
LVMH noted: “After a significant drop in volumes in the second quarter, the Champagne business experienced improved trends in the second half, particularly in the United States. Beginning in June, Hennessy Cognac recorded a strong recovery, driven notably by demand in the United States. 2020 saw the integration of the 2019 acquisitions Château d’Esclans and Château du Galoupet for the first time over a full year, establishing a strong position for Moët Hennessy in the growing market for high-end rosé wines. A new high-end rum, Eminente launched in the third quarter.”
In 2020, the Fashion & Leather Goods business group recorded a decrease in organic revenue of only -3% in an environment marked by the closure of stores over a period of several months. The second half saw a rebound in activity, with double-digit organic revenue growth in both quarters.
China recorded a strong recovery in revenue beginning in April and the US in July. The brands’ strict cost management made it possible to limit the decline in profit from recurring operations to -2%, said the group. Momentum was driven by Louis Vuitton and Christian Dior, with other brands showing “solid resilience”.
The Perfumes & Cosmetics business group recorded a -22% decline in organic revenue in 2020 while profit from recurring operations was down -88%.
LVMH said: “In a sector suffering from the decline in international traveller spend and makeup, LVMH’s major brands chose to be selective in their distribution and, unlike certain competitors, limited promotions and refused to sell indirectly to the Chinese parallel market, which presents major risks to the medium term desirability for brands that follow that route. “The Perfumes and Cosmetics brands are showing good resilience resulting from the growth of skincare and online sales, particularly in Asia.”
The Watches & Jewelry business group saw its organic revenue decline by -23% in 2020, with a strong improvement in trends in the fourth quarter, which fell only -2%. Profit from recurring operations was down -59%.
LVMH hailed the addition of Tiffany to the portfolio from this year, having earlier said that the move would “deeply transform LVMH’s Watches & Jewelry division and complement LVMH’s 75 Maisons”. Bvlgari was “very responsive and quickly capitalised on the strong recovery in China,” said the group
LVMH Chairman and Chief Executive Officer Bernard Arnault commented: “LVMH showed remarkable resilience against the unprecedented health crisis the world experienced in 2020. Our priority has been to protect the health and safety of our employees and our clients and we have provided direct support in the fight against the pandemic.
“Our Maisons have shown great agility and creative energy in continuing to bring to life our customers’ dreams through a unique digital experience thereby further strengthening their desirability. Our focus on dynamic innovation was accompanied by strong commitments to the environment, sustainability and inclusion.
“We are starting 2021 with the pleasure of welcoming the iconic jewellery Maison Tiffany and its teams to our group. In a context that remains uncertain, even with the hope of vaccination giving us a glimpse of an end to the pandemic, we are confident that LVMH is in an excellent position to build upon the recovery for which the world wishes in 2021 and to further strengthen our lead in the global luxury market.”