China and USA boost wine and spirit sales at LVMHBy Arabella Mileham
French luxury good company LVMH Moët Hennessy Louis Vuitton saw growth in its wine and spirits division in the first half of the year on the back of demand in China and sustained growth in the USA.
The wine and spirits division rose 44% in organic growth to Euro 2,705 million, up from Euro 1,985million in the same period in 2020, an increase of 12% on 2019. Profit from its reoccuring business across wines and spirits was up 68% compared to the first half of 2020, or up 20% compared to the pre-pandemic year of 2019.
There was good volume growth across its Champagne brands, with volumes rose 10% compared to the first half of 2019, driven by the momentum in Europe and the United States. However supply constraints for Hennessy cognac limited volumes growth to only 6% on the 2019 figures.
The company saw a strong rebound in China, which was the first market to have been impacted by the pandemic in early 2020, while demand in the United States remained stable.
LVMH took a 50% equity stake in the Champagne Maison Armand de Brignac.
The luxury goods company, whose brands include Moët, Dom Pérignon champagne and Hennessy cognac, as well as fashion brands Louis Vuitton, Christian Dior, Fendi and Tiffany’s, said that momentum had returned, with accelerated growth in the second quarter of 2021. However the figures show that wines and spirits were the exception to this, showing moderatly more growth in the first quarter, of Euro 1,510 million compared to 1,195 million in the second quarter.
Total revenue rose 56% over the first half of 2021, compared to the first half of 2020 to €28.66bn and 14% compared to the first half of 2019 (organic revenue growth was reportedly up 53% on 2020 and 11% compared to 2019), Organic revenue increase by 14% compared to 8% in the first quarter.
As a result, net profit was €5.29bn, ten times higher than in the first half of 2020 and 62% higher than the first half of 2019.
CEO and chairman Bernard Arnault said it had been an excellent half-year.
“LVMH… is reaping the benefits of having continued to innovate and invest in its businesses throughout the pandemic despite being in the midst of a global crisis,” he said.
“Within the current context, as we emerge from the health crisis and see a recovery in the global economy, I believe that LVMH is in an excellent position to continue to grow and further strengthen our lead in the global luxury market in 2021.”
The company reported strong sales growth in Asia and the US, notably in its fashion and luggage portfolio and a gradual recovery in Europe – despite there being an large-scale return to international travel.