FRANCE: Asia volumes prop up Moet Hennessy's H1

By | 26 July 2013

The company still sees challenges in Europe

The company still sees challenges in Europe

LVMH's wine and spirits division, Moet Hennessy, has reported a 9% rise in operating profits in its first-half, with “sustained demand” in Asia propping up its overall volumes. 

The Paris-based luxury goods group said yesterday (25 July) that the unit's operating profits in the six months to the end of June were EUR542m (US$719.8m), up from EUR496m the prior year. Reported sales in this year's H1 rose by 3% to EUR1.8bn. 

The rise in sales marked a slowdown on the 6% reported in the group's first quarter. 

LVMH said today its Champagne business in Europe has "shown good resilience in a difficult economic environment". It added: "The sustained demand enjoyed by LVMH brands in Asian markets has kept the volumes identical to those levels achieved in the first half of 2012."

Hennessy Cognac recorded volume growth of 3%, driven by younger varities, the company added. 

It remains focussed on a “firm pricing policy” and “strong innovation accompanied by sustained investments”, it concluded.

LVMH as a group saw a 6% rise in sales to EUR13.7bn, while operating profits were up 2% to EUR2.7bn.

Shares in LVMH were today trading up 4.45% at EUR136.2.

To read the company's official statement, click here.

Expert analysis

Global market review of Champagne – forecasts to 2016

Some of the issues and challenges addressed in the previous edition of just-drinks' Champagne report continue to influence a category struggling to grow. Recovery from economic downturn and tumbling sales was evidenced in 2010 and part way through 2011, only to be replaced with a further slow down at the end of that year and continuing into 2012. This has been more prevalent in the western European countries. Elsewhere there has been better sales performance, noteably in the US and Japan, significantly in Australia and not forgetting the burgeoning economies of Asia and Greater China. However, even these new markets can only go part way to offset the situation in the more mature markets, to such an extent that total Champagne shipments are expected to rise only slightly during 2012. According to the report, pronounced growth is unlikely until 2015.|

Sectors: Company results, Spirits, Wine

Companies: LVMH

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