LVMH (LVMHF) Q3 2017

Chris Hollis

Growth everywhere

“Organic revenue is up in the double digits across all of our business groups in the third quarter and nine-month period with the exception of Wines & Spirits.”

Jean-Jacques Guiony – CFO

But is not expected to continue in cognac

“…the type of growth we have had over the last two years, I would say is not something that we can replicate forever; the more normalized growth in volumes for cognac is more something like 3% to 4%, exceptionally 5% but nothing really more than that….we have had two tough years in terms of supply. We had hail in 2016 and we have drought in 2017. So, altogether, what we put in our sellers at cognac was lower than what we anticipated. So, all in all, this created a little bit of constraint for the business for the quarters to come I would say. It’s hard to quantify and to know exactly what will happen, but it’s pretty sure that the type of growth we have had for a number of quarters will not be replicated in the future.”

Price influence on growth negligible

“as in the preceding quarters, if not all but a big, big chunk of the growth was made of mix and volume numbers, the price increases were negligible. So the bulk of it was mix and volumes.”

But this may change next year

“…we will probably be able to pass limited price increases to customers. But as you know, we do it end of Q1, early Q2. So, it’s way too early to discuss. But obviously, we’ll think about it and that will be an element of our policy for next year.”