LVMH sees strong growth after 30 percent surge

15th February 2007, Comments 0 comments

PARIS, Feb 14, 2007 (AFP) - French luxury group LVMH Moet Hennessy Louis Vuitton said Wednesday it expected another year of significant earnings growth as it reported a 30 percent surge in 2006 net profit to 1.879 billion euros (2.5 billion dollars).

PARIS, Feb 14, 2007 (AFP) - French luxury group LVMH Moet Hennessy Louis Vuitton said Wednesday it expected another year of significant earnings growth as it reported a 30 percent surge in 2006 net profit to 1.879 billion euros (2.5 billion dollars).

The result eclipsed forecasts from Thomson Financial of 1.865 billion euros.

The operational level profit rose 16 percent to 3.172 billion euros on sales that were up 10 percent to 15.306 billion euros.

"LVMH has shown record revenue in 2006 and has once again improved its profitability," said chief executive Bernard Arnault.

"In a difficult currency environment at the beginning of this year, we will rely on the strength of our growth model, the exceptional innovation of our brands and the talent of our teams to make 2007 another year of strong growth," he said.

The luxury group's operating margin reached 21 percent last year, up from 19.7 percent 2005.

Arnault told a press conference that foreign currency movements could pose a "slight problem" this year, in particular the weakness of the yen and the dollar against the euro.

Both Japan and the United States are core markets for the company.

But if currency rates were to remain at near current levels, earnings growth in 2007 "will be almost comparable" to last year, Arnault said, adding that he did not expect a crash for either the dollar or the yen.

Among the main markets for LVMH, he said, business was "still strong in the United States, and dynamic in Asia, in particular in China and India," while sales in Japan were recovering.

The key fashion and leather goods division posted operating profits of 1.633 billion euros, up 11 percent on the previous year.

Wine and spirits profits gained 11 percent as well to 962 million euros thanks to "sustained" delivery increases for champagne last year.

At the smaller divisions, perfume and cosmetics earnings climbed 28 percent to 222 million euros, the company said.

Profit from watches and jewellery jumped to 80 million euros from 21 million the year before.

Copyright AFP

Subject: French news

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