FRANCE: Operating income up 16% at LVMH
LVMH said that operating income growth accelerated in the second half of 2002, with the second six months showing 37% growth, against 19% in the first six months.
The company added that the faster growth trend observed in the second half of 2002 had continued into the first two months of 2003. "Sales for the first two months of 2003 confirm the positive trend observed over the second half of 2002, but are subject to a greater negative exchange rate impact, counterbalanced at operating income level by the hedging programme," LVMH said.
Net income rose sharply from €334m in 2001 to €818m in 2002, showing stronger growth than operating income. LVMH attributed the improvement principally to the reduction in financial expenses resulting from the lower level of debt.
Operating income from wines and spirits rose by 10.9% from €676m to €750m, with LVMH attributing the rise to strong volume growth in the Champagne sales, notably of Moet & Chandon, Veuve Clicquot and Krug. "The improvement in margin over those achieved in 2000 and 2001 demonstrates the success of the policy of focusing resources on key markets and prestige cuvees," the company said.
Operating income from Cognac rose by 5% to €328m, on volumes 6% higher. LVMH said the entire Hennessy range made progress compared to 2001. "Steady growth" from Hennessy in the US and in Asia, particularly in China, had offset lower sales in Japan, the company said.
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