The course of LVMH, which had reached a record at the beginning of this year, is worth much less today. But we are confident: a high quality security is certainly bought after a correction.
The luxury industry giant Moët Hennessy – Louis Vuitton (LVMH) may have seen its growth slow down somewhat during the health crisis, but it has remained and remains the number 1 in its sector. The results for the first quarter were, not to change, pleasantly surprised, while China, again (rebound from the coronavirus epidemic), worried. LVMH announced an increase in its turnover of 29%, from 13.96 to 18 billion euros; without acquisitions or disposals, it is 23%. Naturally, compared to that of the same period in 2021 (44%; organic: 36%), this growth is less impressive. But the basis of comparison (year 2020 marked by the coronavirus) was much more favorable to it in 2021. If, of course,…
The luxury industry giant Moët Hennessy – Louis Vuitton (LVMH) may have seen its growth slow down somewhat during the health crisis, but it has remained and remains the number 1 in its sector. The results for the first quarter were, not to change, pleasantly surprised, while China, again (rebound from the coronavirus epidemic), worried. LVMH announced an increase in its turnover of 29%, from 13.96 to 18 billion euros; without acquisitions or disposals, it is 23%. Naturally, compared to that of the same period in 2021 (44%; organic: 36%), this growth is less impressive. But the basis of comparison (year 2020 marked by the coronavirus) was much more favorable to it in 2021. While, of course, the first quarter of 2021 cannot be described as “normal” either, growth compared to this period is very honorable. The consensus expected “only” 16.4 billion euros in turnover, and organic growth of 17%. Any fan of LVMH knows that its Fashion & Leather Goods division (which counts, to name but a few of its world famous brands, Louis Vuitton, Fendi, Donna Karan, Givenchy and Kenzo) usually wears the band. It was no different during the first quarter. The growth of its turnover stood at 35% (from 6.74 to 9.12 billion euros), organic growth at an impressive 30%. It brought the group more than half (50.7%) of its turnover. And that’s pretty good, because the division is also the most profitable. In 2021, it claimed 48% of the turnover and three quarters (12.84 billion euros) of the operating profit (Ebit) of the group (17.15 billion). The Wines & Spirits division (a few flagship brands: Moët & Chandon, Dom Perignon, Veuve Cliquot, Château d’Yquem, Hennessy) is the only one to have disappointed in the first quarter: the growth of its turnover was limited to 8% (from 1.51 to 1.64 billion euros) and organic growth, at 2%, in particular due to supply problems (the Hennessy cognac, for example, is concerned). In difficulty in 2020, the Selective Distribution division, embodied by the Sephora stores and the DFS group, the largest chain of luxury stores (more than 1,100) targeting travelers, had seen its turnover go up last year. The trend was confirmed at the beginning of the year: its turnover increased by 30% (from 2.34 to 3.04 billion euros) and organic growth stood at 23%. The Perfumes & Cosmetics division saw its turnover increase by 23% (organic increase: 17%). As for the Watches & Jewelry division, in terms of turnover (24% increase, from 1.88 to 2.34 billion euros, and organic growth of 19%, in the first quarter), it rose to number 3. of the sector, which it owes to the arrival in the group, in January 2021, of the famous American jeweler Tiffany & Co (acquired for some 15 billion euros). Remember that last year, recurring Ebit ( Rebit) of LVMH had more than doubled (+107%), from 8.30 to 17.15 billion euros. The market welcomed the luxury giant’s quarterly publications. However, due to the war in Ukraine and the slowdown in China, the stock is more weakly valued than in recent years, at 13.5 times the enterprise value (EV) / operating cash flow (EBITDA) ratio. and at 23.5 times the expected profit in 2022. It was worth more than 750 euros, a record, at the start of the year; for the time being, 15 to 20% less. We are confident: she will recover. Advice: buyRisk: lowRating: 1ACourse: 637.60 eurosTicker: MC FPISIN code: FR0000121014Market: Euronext ParisCapit. market: 321 billion EURC/B 2021: 26.5C/B expected 2022: 23.5Perf. course over 12 months: +5%Perf. share price since 01/01: -12% Dividend yield: 1.6%
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