PARIS, Mar 5, 2004/ FW/ --- LVMH Moët Hennessy Louis Vuitton, purveyor of luxury goods reported gross sales of 12 billion euros in 2003, with an operating income of 2,182 million euros, a 9% increase compared to last year.

Net income before goodwill amortization broke through the one billion Euro threshold for the first time, up 25% over 2002. This improvement, beyond that of operating income, is largely due to lower financial expenses resulting from further debt reduction. Net income was up 30%.

Leading the pack in the LVMH stable is the fashion & leather goods, which accounted for 1,311 million euros in sales. The operating margin rose to 32%, exceeding 2002 levels.

Star label is Louis Vuitton, achieving 38% growth in US dollar sales for the year. Thanks to the appeal and quality of its products, as well as a dynamic innovation program, Louis Vuitton maintained its operating margin at a record level, unique in the luxury goods sector.

The opening of the world’s largest Louis Vuitton store in New York in February confirms the immense success of the brand with its American clientele and marked the beginning of Louis Vuitton’s 150th anniversary celebration. The new soft luggage collection Damier Géant was launched in this US global store as a world exclusive and is already a great success. A comprehensive line of jewelry will be launched in the second half of 2004.

The business group continues to invest in future growth drivers: Céline is confirming its new dynamic trend; Fendi is pursuing its strategic repositioning with a renewed marketing campaign and a reinforced retail network, requiring significant investments. Marc Jacobs, Pucci and Berluti continue to improve their performance and results. Donna Karan has a new management team.

Operating income for the Wines & Spirits business group rose 6% in 2003, despite the negative impact of currency fluctuations. The performance of champagne brands Moët & Chandon, Dom Perignon and Veuve Clicquot were particularly good in the UK and Japan. In the US, Veuve Clicquot and Krug made excellent progress. The strong growth of Hennessy continued in the US, where the brand strengthened its market leadership; excellent performances were also achieved in China and Taiwan.

The Perfume & Cosmetics business group’s operating income increased 11%. Parfums Christian Dior continued to record high profitability within a very competitive environment. Innovation in make up and skincare, thanks to the success of Addict and Capture, and continued development of J’adore perfume sustained the activity of the brand. Guerlain launched a new perfume for women, L’Instant, which was one of the great successes of the year.

The success of other launches in 2003, including Givenchy’s Very Irresistible and Parfums Kenzo’s Kenzo Air, also contributed to the strong performance of Perfumes & Cosmetics.

The US cosmetics company BeneFit demonstrated its very profitable development with double-digit sales growth.

DFS reported positive results in 2003 despite a very difficult economic environment. The ongoing rigorous cost reduction plan and renegotiation of concessions helped offset lower sales during the year.

Sephora improved its operating profitability both in Europe and in the US. In France in particular, the new loyalty card was very well-received by customers. The network of stores was expanded into Russia and strengthened in Poland, two markets with high potential.

In the US, Sephora continued to achieve an increase of around 20% in comparable store sales, became profitable for the first time and was cash flow positive in 2003.

The only stinker is the Watches & Jewelry division that posted 48 million losses for the year. Though it was the red, the Watches & Jewelry business group has, since the summer, renewed its growth in a very competitive watch market.