Remaining true to our values

LVMH’s excellent performance in 2011 once again highlights the power of our brands and the appeal of our products. Our Group’s results prove, if proof were in fact needed, that the quest for exceptionally high-quality products, the desire for authenticity and durability, the pleasure of being treated as an exceptional customer in an exceptional environment – all of these aspirations that LVMH aims to fulfill – assume a more prominent role than ever in periods of uncertainty. This year we once again recruited many employees in all professions and we are delighted to have created numerous new positions for craftsmen and craftswomen at our workshops in France and elsewhere in Europe. As we keep a close watch on the current economic volatility in Europe, LVMH will remain true to its values, managing the Group’s businesses with a steady hand and continuing to invest wisely. Large-scale projects are taking shape and are being launched across the Group, so as to ensure that profitable growth remains here to stay.

Our businesses once again showed excellent momentum in 2011. These excellent figures are a direct consequence of our culture of innovation and creativity, as well as our obsessive focus on the quality of our products.

One event of the past year which comes to mind in particular is the tragedy that struck Japan in March 2011. From a personal perspective and on behalf of all LVMH employees, I would like to reiterate the admiration we feel for the Japanese people. Admiration for their bravery and strength of character in this extremely trying time, for the speed with which the regions affected by the catastrophe launched their reconstruction projects, and for the way our Japanese colleagues orchestrated a return to normality. Thanks to them, our operations were re-established in record time. And our customers returned in even greater numbers to our stores… a tremendous expression of faith in the future and loyalty to the Group’s brands.

LVMH and Bulgari: a shared culture, a shared entrepreneurial spirit

The alliance we made with the Bulgari family was one of the key moments of 2011. This legendary Italian label is one of the most outstanding pioneers of authentic, accomplished European craftsmanship. As well as being a leading jeweler and watchmaker, Bulgari also has perfume and leather goods lines. We share the same values, the same respect for heritage and brand identity as well as the same entrepreneurial culture. Now that we have joined forces with Bulgari, our Watches and Jewelry business group has strengthened its capabilities and savoir-faire and is reaping the benefits of new synergies. It has also significantly increased its market share and ability to finance growth projects.

2012: managing with a steady hand, investing resolutely and judiciously

The beginning of 2012 has continued amid the same uncertain environment in Europe as the last few months of 2011. However, the world as a whole is experiencing growth. Building on the strengths of the Group’s brands, the oldest of which trace their heritage back to the sixteenth century, means following major shifts in worldwide demand. At the same time, we will remain vigilant, close to our markets and responsive, a stance made possible thanks to our decentralized organization. We will also persevere with our program of selective investments in our businesses. LVMH has always grown stronger in periods of uncertainty, while remaining true to the Group’s values: creativity, high quality craftsmanship and entrepreneurial spirit.

Attracting top-tier talent

Thanks to the Group’s diversity and culture, we are able to attract the most creative and talented people, whether they are rising stars of tomorrow or have already garnered international renown. We offer these exceptional individuals exciting, challenging projects and we know just what it takes to light the spark that makes the difference by matching each of them with the most suitable brand. But the Group also attracts the best managers; we offer them a unique environment and unequalled career development prospects. Attracting, incubating and nurturing the most promising talent are strategic priorities for all our businesses.

Dedicating the resources required to maintain exceptional quality

We ensure the quality of our products by carefully controlling the way they are made and by conserving our savoir-faire. The year saw the opening of three new workshops by Louis Vuitton, including one in Marsaz (Drôme region of France), which will employ 250 craftspeople. This production unit was not designed simply to perpetuate Louis Vuitton’s pursuit of perfection, but also as a showcase for sustainable development. Louis Vuitton is also preparing to open a jewelry workshop in Place Vendôme, Paris. In Bordeaux, Château Cheval Blanc opened its new wine storehouse, superbly combining architectural aesthetics and wine-producing excellence. In Switzerland, Bulgari, TAG Heuer, Hublot and Zenith continue to enhance their technological expertise along with their watchmaking capacity. These are just a few examples of the resources deployed to ensure the future growth of our businesses and maintain the quality which has made our brands so successful since their inception.

The entrepreneurial culture throughout the Group allows us to constantly explore an ever-changing world, identify new and promising concepts, as well as the best opportunities in the market, make quick decisions, find the right teams and allocate the necessary financial resources to invest in new regions and build solid market positions. Examples include Sephora’s rapid penetration into the Chinese market, Make Up For Ever’s success in making professional make-up products accessible to the general public, and the ready-to-wear project launched for Berluti, which can now realize its full potential in the world of menswear.

Facing the future, with confidence

I would like to conclude by reaffirming my conviction that a bright future is in store for the LVMH group. The dreams and emotions fueled by our brands transcend geographical and historical boundaries. The immense success of the Journées Particulières in October 2011, an unprecedented opportunity for the public to visit our workshops and historic sites, demonstrates the abiding fascination exerted by the excellence of our teams’ craftsmanship and the time-honored heritage of our brands. It is also important, as ever, to note the tireless commitment of all our teams, their exemplary adherence to our values and ambitions, their willingness to go the extra mile. These are the essential foundations for our continuing success.

Bernard Arnault
Chairman & Chief Executive Officer