• Half-year operating profits from wines & spirits decrease by 15% to EUR461m (US$620.8m)
  • Moet Hennessy sales in first six months of 2014 slip by 7% to EUR1.79m
  • Division sales rise in Q2, after Q1 fall

The wine and spirits arm of LVMH has reported decreases in both sales and profits in the first six months of 2014.

Moet Hennessy said earlier today (24 July) that operating profits in H1 fell by 15% year-on-year. Operating profits from Champagne and wines dipped by 9.5% to EUR152m, with profits from spirits tumbling by 16.7% to EUR309m.

Total sales from the division dipped by 7% in reported terms and by 1% in organic terms. While Champagne and wine sales were flat in the period, dipping by 0.5% to EUR723m, spirits sales fell by 10.6%.

Cognac volumes were down by 1% in the half-year, as the unit flagged "continued destocking of higher qualities in China". Champagne posted a volumes lift of 3%.

The half-year results follow an 8% fall in sales on a reported basis for the first three months of this year for Moet Hennessy.

Group sales in the half-year were up by 3% in reported terms and by 5% organically. Group net profits, however, dipped by 4% to EUR1.51bn, with operating profits dropping by 5%.

In Q2, sales of wines & spirits increased by 1%, an improvement on the 3% fall in sales in organic terms in the first quarter of the year.

On outlook, LVMH flagged the "uncertain" economic environment in Europe and the "unfavourable" currency environment. At the same time, the firm committed to "maintaining targeted investments in markets with high potential".

The group's shares closed up slightly today, by 1% at EUR141.25.

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

Expert analysis

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