financial release
2018 results
The Christian Dior group recorded revenue of €46.8 billion in 2018, an increase of 7% * over the previous year. Organic revenue growth was 11%, and 12% excluding the impact of the closure of the Hong Kong airport concessions at the end of 2017. All business groups recorded excellent performances.
Organic revenue growth in the fourth quarter was 10% ** (excluding the impact of the closure of the Hong Kong airport concessions). The quarter continued the trend that has been underway since the beginning of the year.
Profit from recurring operations amounted to €10.0 billion in 2018, up 20%. Operating margin reached a level of 21.4%, an increase of 2.2 percentage points. Group share of net profit amounted to €2.6 billion, up 14%.
Key highlights from 2018 include:
- further increase in revenue and profit from recurring operations, which reached record levels,
- continued growth in Europe, the United States, Asia and Japan,
- excellent performance in Wines and Spirits and exceptional grape harvests,
- success of both iconic and new products at Louis Vuitton, whose profitability remains at an exceptional level,
- very good year for Christian Dior Couture,
- creative renewal at several Maisons,
- strong growth at the flagship brands of Perfumes and Cosmetics,
- excellent year for Bvlgari and good development of Hublot and TAG Heuer,
- growth at Sephora, which strengthened its positions in all its markets and in digital,
- agreement with the Belmond group,
- free cash flow of €5.4 billion, up 19%,
- gearing of 1.1% at the end of December 2018.
* Growth rate reported differs from that reported by LVMH because Christian Dior Couture was not yet included in LVMH's scope of consolidation in the first half of 2017.
** Organic growth of 9% including the impact of the closure of the Hong Kong airport concessions.
The consolidated financial higlights were as follows:
| (EUR millions) | 2018 | 2017 (a) | Change |
| Revenue | 46,826 | 43,666 | +7% |
| Profit from recurring operations | 10,001 | 8,351 | +20% |
| Net profit, Group share | 2,574 | 2,259 | +14% |
| Free cash flow | 5,382 | 4,531 | +19% |
| Net financial debt | 418 (b) | 1,976 | -79% |
| Total equity | 36,372 | 32,701 | +11% |
(a) Restated to account for the impact of the application of IFRS 9 Financial Instruments
(b) Excluding the acquisition of Belmond shares at the end of 2018 for €274m.
Revenue and profit from recurring operations by business group for the Christian Dior group were as follows:
REVENUE
| (EUR millions) | 2018 | 2017 | Change at actual exchange rates | Organic growth (a) |
| Wines and Spirits | 5,143 | 5,084 | +1% | +5% |
| Fashion and Leather Goods | 18,455 | 16,519 * | +12% * | +15% |
| Perfumes and Cosmetics | 6,092 | 5,560 | +10% | +14% |
| Watches and Jewelry | 4,123 | 3,805 | +8% | +12% |
| Selective Retailing | 13,646 | 13,311 | +3% | +6% (b) |
| Other activities and eliminations | (633) | (613) * | - | - |
| Total | 46,826 | 43,666 | +7% | +11% |
(a) With comparable structure and exchange rates. The currency effect was -4%
(b) +12% excluding the closure of Hong Kong airport concessions in 2017
PROFIT FROM RECURRING OPERATIONS
| (EUR millions) | 2018 | 2017 | Variation |
| Wines and Spirits | 1,629 | 1,558 | +5% |
| Fashion and Leather Goods | 5,943 | 5,022 * | +18% * |
| Perfumes and Cosmetics | 676 | 600 | +13% |
| Watches and Jewelry | 703 | 512 | +37% |
| Selective Retailing | 1,382 | 1,075 | +29% |
| Other activities and eliminations | (332) | (416) | - |
| Total | 10,001 | 8,351 | +20% |
* Some of the information reported by Christian Dior for the first half of 2017 differs from that reported by LVMH because Christian Dior Couture was not yet included in LVMH's scope of consolidation in the first half of 2017.
Wines & Spirits: good momentum in China and significant growth in Europe and the United States, despite supply constraints
The Wines & Spirits business group achieved organic revenue growth of 5%. Profit from recurring operations increased by 5%. The business group reaffirmed its leadership position by pursuing its value strategy and balanced geographic development. In the champagne business, prestige vintages performed remarkably well, while a firm price increase policy continued. A key highlight of the year was the exceptional harvest both in terms of quantity and quality. Hennessy cognac recorded good growth in the US market against a backdrop of tight supply; the Chinese market experienced strong momentum. Glenmorangie and Ardbeg whiskies grew rapidly. Our prestige wines obtained the best ratings.
Fashion & Leather Goods: exceptional performance of Louis Vuitton across all its businesses and strengthening of other brands
The Fashion & Leather Goods business group achieved organic revenue growth of 15% in 2018. Profit from recurring operations was up 18% *. Louis Vuitton delivered an exceptional performance, to which all businesses and regions contributed. Its creative strength lies notably in its iconic leather goods lines which are continuously rejuvenated, and in its ready-to-wear and shoe lines, designed by the respective Louis Vuitton Creative and Artistic Directors, Nicolas Ghesquière for the women's collections and Virgil Abloh, who joined in 2018, for the men's collections. The qualitative development of its stores continued in a very selective way. It is noteworthy that Louis Vuitton is the only brand in the world to never hold sales nor sell through outlets. Christian Dior had an excellent first full year within LVMH thanks to the creativity of Maria Grazia Chiuri for the Women's collections and to the arrival of Kim Jones, the new Artistic Director of Dior Homme. Fendi and Loro Piana continued to assert their know-how throughout their collections. Celine entered a new and ambitious stage of its development with the arrival of Hedi Slimane as Artistic, Creative and Image Director of the brand. His first runway show in October was a global success. Givenchy, Loewe and Kenzo progressed well. The other brands, Berluti with the arrival of Kris Van Assche, and Rimowa continued their dynamic momentum.
Perfumes & Cosmetics: successful innovation and rapid progress in Asia
The Perfumes & Cosmetics business group achieved organic revenue growth of 14%, driven by the performance of its flagship brands. Profit from recurring operations was up 13%. Parfums Christian Dior experienced remarkable growth and increased its market share in all regions of the world. The launch of its new perfume Joy and the exceptional worldwide success of Sauvage and the other iconic perfumes J'adore and Miss Dior are behind the strong growth of the Maison. Makeup and skincare also grew rapidly. Guerlain progressed well, driven in particular by the success of Abeille Royale in skincare and Rouge G in makeup. Benefit strengthened its leading position in the eyebrow segment and Parfums Givenchy accelerated its performance, thanks in particular to makeup and its new perfume L'interdit. Fresh and Fenty Beauty by Rihanna continued their exceptional growth.
Watches & Jewelry: excellent year for Bvlgari and good progress of watch brands
The Watches & Jewelry business group recorded organic revenue growth of 12%. Profit from recurring operations was up 37%. Bvlgari performed very well and gained market share. Its iconic jewelry and watchmaking lines Serpenti, Diva's Dream, B.Zero1, Lvcea and Octo grew strongly. Among the new product launches of the year, the Octo Finissimo watch and the Fiorever jewelry collection, designed around a central diamond, were exceptionally well received. Chaumet's growth was driven by the success of the Liens and Joséphine collections, particularly in Asia. The exhibition on its history at the Mitsubishi Ichigokan Museum in Tokyo was an immense success. In the watchmaking sector, TAG Heuer continued to develop its iconic lines and introduced a new variant of the smart watch. Hublot, which continued its progress, enjoyed strong growth in 2018 and considerable visibility as the FIFA World Cup Official Timekeeper.
* Growth rate reported for this business group differs from that reported by LVMH because Christian Dior Couture was not yet included in LVMH's scope of consolidation in the first half of 2017.
Selective Retailing: sustained growth at Sephora and rebound of DFS's profitability
The Selective Retailing business group achieved organic revenue growth of 6%, up 12% excluding the Hong Kong airport concession closures. Profit from recurring operations was up 29%. Sephora had another year of growth and market share gains. Online sales grew rapidly, especially in North America and Asia. The extension and renovation of its distribution network continued in 2018 with around one hundred new stores opening around the world, including the new Nanjing Road store in Shanghai and the first Sephora-branded stores in Russia. Le Bon Marché accelerated the development of its loyalty program and launched a new children's department in the last quarter. The online platform, 24 Sèvres, launched a year ago, developed actively. DFS progressed strongly thanks to a particularly good performance in Hong Kong and Macao. The recently opened Gallerias in Cambodia and Italy also grew rapidly. The closure of the loss-making Hong Kong Airport concessions at the end of 2017 contributed to the rebound in profitability.
Cautiously confident for 2019
In an uncertain geopolitical and monetary context, the Christian Dior group is well-equipped to continue its growth momentum across all business groups in 2019. The Group will pursue its strategy focused on developing its brands by continuing to build on strong innovation and investments as well as a constant quest for quality in their products and their distribution.
Driven by the agility of its teams, their entrepreneurial spirit, the balance between its different businesses and geographic diversity, Christian Dior group enters 2019 with cautious confidence and once again, sets an objective of reinforcing its global leadership position in luxury goods.
Dividend up by 20%
At the Annual General Meeting on April 18, 2019, Christian Dior will propose a dividend of €6 per share, an increase of 20%. An interim dividend of €2 per share was paid on December 6 of last year. The balance of €4 per share will be paid on April 29, 2019.
The Board of Directors met on January 29th to approve the financial statements for 2018. Audit procedures have been carried out and the audit report is being issued.
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This financial release constitutes regulated information, and is made available on the Company's website (www.dior-finance.com).
This document is a free translation into English of the original French financial release dated January 29, 2019.
It is not a binding document.
In the event of a conflict in interpretation, reference should be made to the French version, which is the authentic text.
APPENDIX
Christian Dior group - Revenue by business group and by quarter
| 2018 | |||||||
| Revenue (EUR millions) | Wines and Spirits | Fashion and Leather Goods | Perfumes and Cosmetics | Watches and Jewelry | Selective Retailing | Other activities and eliminations | Total |
| First Quarter | 1,195 | 4,270 | 1,500 | 959 | 3,104 | (174) | 10,854 |
| Second Quarter | 1,076 | 4,324 | 1,377 | 1,019 | 3,221 | (121) | 10,896 |
| First Half | 2,271 | 8,594 | 2,877 | 1,978 | 6,325 | (295) | 21,750 |
| Third Quarter | 1,294 | 4,458 | 1,533 | 1,043 | 3,219 | (168) | 11 379 |
| Nine months | 3,565 | 13,052 | 4,410 | 3,021 | 9,544 | (463) | 33,129 |
| Fourth Quarter | 1,578 | 5,403 | 1,682 | 1,102 | 4,102 | (170) | 13,697 |
| Total | 5,143 | 18,455 | 6,092 | 4,123 | 13,646 | (633) | 46,826 |
| | |||||||
| Organic revenue growth (as %) | Wines and Spirits | Fashion and Leather Goods (*) | Perfumes and Cosmetics | Watches and Jewelry | Selective Retailing | Other activities and eliminations | Total |
| First Quarter | +10% | +16% | +17% | +20% | +9% | - | +14% |
| Second Quarter | +3% | +14% | +14% | +12% | +9% | - | +11% |
| First Half | +7% | +15% | +16% | +16% | +9% | - | +12% |
| Third Quarter | +7% | +14% | +11% | +10% | +5% | - | +10% |
| Nine months | +7% | +15% | +14% | +14% | +8% | - | +12% |
| Fourth Quarter | +2% | +17% | +13% | +7% | +3% | - | +9% |
| Total | +5% | +15% | +14% | +12% | +6% | - | +11% |
| 2017 | |||||||
| Revenue (EUR millions) | Wines and Spirits | Fashion and Leather Goods (*) | Perfumes and Cosmetics | Watches and Jewelry | Selective Retailing | Other activities and eliminations | Total |
| First Quarter | 1,196 | 3,911 | 1,395 | 879 | 3,154 | (155) | 10,380 |
| Second Quarter | 1,098 | 4,035 | 1,275 | 959 | 3,126 | (129) | 10,364 |
| First Half | 2,294 | 7,946 | 2,670 | 1,838 | 6,280 | (284) | 20 ,744 |
| Third Quarter | 1,220 | 3,939 | 1,395 | 951 | 3,055 | (179) | 10,381 |
| Nine months | 3,514 | 11,885 | 4,065 | 2,789 | 9,335 | (463) | 31,125 |
| Fourth Quarter | 1,570 | 4,634 | 1,495 | 1,016 | 3,976 | (150) | 12,541 |
| Total | 5,084 | 16,519 | 5,560 | 3,805 | 13,311 | (613) | 43,666 |
* Some of the information reported by Christian Dior differs from that reported by LVMH because Christian Dior Couture was not yet included in LVMH's scope of consolidation in the first half of 2017.
Certain information included in this release is forward-looking and is subject to important risks and uncertainties and factors beyond our control or ability to predict, that could cause actual results to differ materially from those anticipated, projected or implied. It only reflects our views as of the date of this presentation. No undue reliance should therefore be based on any such information, it being also agreed that we undertake no commitment to amend or update it after the date hereof.
