2010: A great vintage for LVMH

Our businesses grew at a remarkable pace in 2010, which resulted in our group breaking all its historical records. This growth came alongside sharply higher results and a further improvement in our financial position. It allowed the hiring of around 18 000 employees and some major investments for the future. The excellent performance of the LVMH share price reflects the quality of what we have achieved and investors' confidence in our strategy and our future. A future underpinned by our unique, ever more vibrant heritage. A future that we are building on solid foundations, as we pursue our long term vision.

For several months, LVMH has enjoyed uninterrupted growth, to which all our business groups have contributed. It would be an over-simplification to suggest that this is due to the economic upturn alone. The Group's performance is also, above all, the result of the relevance and consistency of our long term strategy. A strategy that we pursued, unchanged, throughout the recent economic crisis. The support of the enduring values of our star brands, creativity as an absolute imperative, the quest for perfection in our products, and our efforts to ensure an environment of excellence coupled with impeccable service at our stores form the wellspring of our success. To these we must also add the agility and the motivation of our organization which benefits from the hands-on enterprise culture of the men and women of our Group. It enables us to take the right decisions quickly, invest where needed and seize opportunities to increase our market share. And this applies just as much when global economies are shrinking as when they start growing again.

Highly responsive, with a very selective approach to our markets

We are responsive to current growth in the world market, but we also take a very selective, long term approach. The two components of this strategy are reflected in a wide range of developments in 2010. Dom Pérignon – in a first for the industry – launched several exceptional vintages, all of which achieved critical acclaim, and used the excitement surrounding these remarkable launches as an opportunity to organize exclusive events celebrating Dom Pérignon's prestigious heritage, which stretches all the way back to the seventeenth century. Louis Vuitton deployed its creativity and demonstrated its excellence across all product lines. The opening of the new Louis Vuitton Maison in London was one of the highlights of the year, an outstanding achievement which has enhanced both the appeal of the brand and the reputation of the British capital. In the perfumes and beauty domain, Christian Dior brilliantly illustrated the unique magic created by Mr Dior, recalling its roots in Haute Couture, and boosting the success of its legendary creations: Miss Dior, J'adore, Rouge Dior… TAG Heuer marked its 150th anniversary with a vast array of innovations throughout the world. Sephora strengthened the appeal of its concept and innovation strategy in its key markets and has broken into a promising new market, Latin America.

Passion to take our creations to the highest echelon of know-how

The performance of many other brands are also worthy of mention: Hennessy, Moet & Chandon, Fendi, Guerlain, Givenchy, Make Up For Ever, Marc Jacobs, Benefit, Hublot... We are home to a wide range of brands, we respect and strengthen the originality of each of them, each of our brands builds its future on its own culture and its historic know-how; this is a source of unique know-how for our Group. We give them all the nurturing and support they need for their long term development, while respecting their roots, their heritage and their individual personality. Whether they have established leadership positions in their markets, or have embarked on a promising development campaign, all of our brands have enhanced their standing and their appeal. They have continued their rational expansion and acquired the strength they need for the future. This same determination to invest for the long term led LVMH to become a shareholder in Hermès International – another brand which symbolizes French know-how, whose standards we share and whose vision we support. Its culture, so particular, is to be preserved preciously and our Group, as a shareholder of this company, will guarantee it. Naturally, we have set ourselves high goals for 2011 with the aim of further strengthening our global leadership position. But we need to look well beyond this horizon. I am pleased to see that our concept of creation, our passion to take our products to the highest echelon of quality and our desire to offer an exceptional retail experience at our brands, perfectly fits our customers' expectations. The desire for excellence, the recognition of know-how and fine craftsmanship and the culture of authentic quality are enjoying significant growth throughout the world. Everything suggests this trend will remain prominent in the years ahead, opening up for us magnificent perspectives for the future…

An exciting business plan

…And an exciting challenge for our teams: we must support this positive momentum while adhering to the standards of quality and creativity on which our long term success depends. We must meet the growing demand for our products: Louis Vuitton is opening a new workshop in France, our watch brands are increasing capacity at their manufactures. We will reach out to all of our customers throughout the world: we will continue to break into new markets (Hennessy in Asia, Sephora in Latin America…), extending and perfecting our global network of flagships and stores. We must also invest in brand reputation, supporting innovation and our creative teams, highlighting the close connection between their current work and that of the history of each brand.

A model for responsible growth

I firmly believe that if we are to inspire our customers, we must have dreams of our own. This is why we need to continue to invest in the know-how and talents of our women and men, so that we can all feel part of a responsible enterprise project. This project is both financial and cultural, as can be seen from the support we have given over the last two decades to the fields of history, art and contemporary design. To my mind, LVMH's commitment as a corporate citizen is completely enshrined in our raison d'être. I would like to assure our shareholders – who are also our partners in this great project – that our company will continue its efforts to increase its value and ensure that our responsible growth model, which relies on a long term vision shared by everyone in the Group, is here to stay.

February 4, 2011

Bernard Arnault
Chairman & Chief executive officer