MC

FR0000121014

Apparel & Accessories

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LVMH Moët Hennessy Louis Vuitton : Management report of the Board of Directors - Version as of March 27, 2020

March 27, 2020 at 03:58 pm EDT

DECEMBER 31, 2019

FINANCIAL STATEMENTS

PARENT COMPANY FINANCIAL STATEMENTS: LVMH MOËT HENNESSY - LOUIS VUITTON

VERSION AS OF MARCH 27, 2020

FINANCIAL STATEMENTS

Parent company ﬁnancial statements: LVMH Moët Hennessy - Louis Vuitton

INCOME STATEMENT	2
BALANCE SHEET	3
CASH FLOW STATEMENT	4
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS	5
INVESTMENT PORTFOLIO	24
SUBSIDIARIES AND INVESTMENTS	25
COMPANY RESULTS OVER THE LAST FIVE FISCAL YEARS	26
STATUTORY AUDITORS' REPORT ON THE PARENT COMPANY	27
FINANCIAL STATEMENTS
STATUTORY AUDITORS' SPECIAL REPORT ON REGULATED	31
RELATED-PARTY AGREEMENTS

FINANCIAL STATEMENTS

Parent company financial statements: LVMH Moët Hennessy - Louis Vuitton

INCOME STATEMENT

Income/(Expense) (EUR millions)	Notes	2019	2018
Financial income from subsidiaries and investments		4,252.7	3,550.5
Investment portfolio: impairment and provisions		(169.1)	(133.0)
gains and losses on disposal		-	-
Income from managing subsidiaries and investments	4.1	4,083.6	3,417.5
Cost of net financial debt	4.2	(29.5)	(30.4)
Foreign exchange gains and losses	4.3	(36.4)	(33.4)
Other financial income and expenses	4.4	(22.0)	(8.9)
FINANCIAL INCOME/(EXPENSE)	4	3,995.7	3,344.8
Services provided and other income	5	378.8	316.0
Personnel costs	6	(252.7)	(181.1)
Other net management charges	7	(430.7)	(326.4)
OPERATING PROFIT/(LOSS)		(304.6)	(191.5)
RECURRING PROFIT BEFORE TAX		3,691.1	3,153.3
EXCEPTIONAL INCOME/(EXPENSE)	8	(110.0)	-
Income tax income/(expense)	9	130.4	230.8
NET PROFIT		3,711.5	3,384.1

FINANCIAL STATEMENTS

Parent company financial statements: LVMH Moët Hennessy - Louis Vuitton

BALANCE SHEET

ASSETS	Notes			2019	2018
(EUR millions)		Gross	Depreciation,	Net	Net

			amortization and
			impairment
Intangible assets		11.8	(8.4)	3.4	1.5
Vineyard land		45.2	-	45.2	45.2
Other property, plant and equipment		41.3	(2.1)	39.2	46.4
Intangible assets and property, plant and equipment	10	98.3	(10.5)	87.8	93.1
Equity investments	11	28,170.2	(1,885.5)	26,284.7	25,453.8
LVMH treasury shares	12	94.1	-	94.1	94.6
Other non-current financial assets	13	134.6	-	134.6	132.0
Non-current financial assets		28,398.9	(1,885.5)	26,513.4	25,680.4
NON-CURRENT ASSETS		28,497.2	(1,896.0)	26,601.2	25,773.5
Receivables	14	294.9	-	294.9	594.3
LVMH treasury shares	12	308.9	-	308.9	326.6
Cash and cash equivalents		34.6	-	34.6	30.6
CURRENT ASSETS		638.4	-	638.4	951.5
Prepayments and accrued income	15	15.9	-	15.9	25.2
TOTAL ASSETS		29,151.5	(1,896.0)	27,255.5	26,750.2

LIABILITIES AND EQUITY			Notes	2019	2018
(EUR millions)				Before	Before

				appropriation	appropriation
Share capital (fully paid up)			16.1	151.6	151.5
Share premium account			16.2	2,318.8	2,298.5
Reserves and revaluation adjustments			17	388.0	388.0
Retained earnings				11,131.3	10,764.7
Interim dividend				(1,108.0)	(1,005.7)
Net profit for the fiscal year				3,711.5	3,384.1
Regulated provisions				0.1	0.1
EQUITY			16.2	16,593.3	15,981.2
PROVISIONS FOR CONTINGENCIES AND LOSSES			18	727.4	692.3
Bonds			19	6,647.0	6,604.0
Other financial debt			19	2,805.9	3,102.4
Other debt			20	469.2	356.7
OTHER LIABILITIES				9,922.1	10,063.1
Accruals and deferred income			21	12.7	13.6
TOTAL LIABILITIES AND EQUITY				27,255.5	26,750.2

FINANCIAL STATEMENTS

Parent company financial statements: LVMH Moët Hennessy - Louis Vuitton

CASH FLOW STATEMENT

(EUR millions)	2019	2018
OPERATING ACTIVITIES
Net profit	3,711.5	3,384.1
Depreciation, amortization and impairment of fixed assets	170.0	134.5
Change in other provisions	35.0	45.3
Gains or losses on sales of assets	81.5	37.6
CASH FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL	3,998.0	3,601.5
Change in intra-Group current accounts	41.3	1,207.4
Change in other receivables and payables	126.2	416.4
NET CASH FROM OPERATING ACTIVITIES	4,165.5	5,225.3
INVESTING ACTIVITIES
(Acquisition)/Disposal of intangible assets and property, plant and equipment	(10.5)	(18.1)
Acquisition of equity investments	-	-
Disposal of equity investments and similar transactions	-	-
Subscription to capital increases carried out by subsidiaries	(1,000.0)	(500.0)
NET CASH FROM/(USED IN) INVESTING ACTIVITIES	(1,010.5)	(518.1)
FINANCING ACTIVITIES
Capital increase	20.6	49.0
Acquisitions and disposals of LVMH treasury shares	(48.6)	(293.7)
Interim and final dividends paid during the fiscal year	(3,119.9)	(2,714.3)
Proceeds from borrowings	1,000.0	-
Repayments of borrowings	(1,003.7)	(1,750.0)
(Acquisition)/Disposal of available for sale financial assets	-	-
NET CASH FROM/(USED IN) FINANCING ACTIVITIES	(3,151.6)	(4,709.0)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	3.4	(1.8)
CASH AND CASH EQUIVALENTS AT BEGINNING OF FISCAL YEAR	30.6	32.4
CASH AND CASH EQUIVALENTS AT END OF FISCAL YEAR	34.0	30.6

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

1.	BUSINESS ACTIVITY AND KEY EVENTS DURING THE FISCAL YEAR	270
2.	ACCOUNTING POLICIES AND METHODS	270
3.	SIGNIFICANT SUBSEQUENT EVENTS	273
4.	FINANCIAL INCOME/(EXPENSE)	273
5.	SERVICES PROVIDED AND OTHER INCOME	274
6.	PERSONNEL COSTS	275
7.	OTHER NET MANAGEMENT CHARGES	275
8.	EXCEPTIONAL INCOME/(EXPENSE)	275
9.	INCOME TAXES	276
10.	INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT	276
11.	EQUITY INVESTMENTS	276
12.	TREASURY SHARES AND RELATED DERIVATIVES	277
13.	OTHER NON-CURRENT FINANCIAL ASSETS	280
14.	RECEIVABLES	280
15.	PREPAYMENTS AND ACCRUED INCOME	281
16.	SHARE CAPITAL AND SHARE PREMIUM ACCOUNT	281
17.	RESERVES AND REVALUATION ADJUSTMENTS	282
18.	CHANGES IN IMPAIRMENT AND PROVISIONS	282
19.	GROSS BORROWINGS	283
20.	OTHER DEBT	284
21.	ACCRUALS AND DEFERRED INCOME	285
22.	MARKET RISK EXPOSURE	285
23.	OTHER INFORMATION	287

FINANCIAL STATEMENTS

Notes to the parent company financial statements

1. BUSINESS ACTIVITY AND KEY EVENTS DURING THE FISCAL YEAR

1.1 Business activity

In addition to managing its portfolio of investments in its capacity as the Group's holding company, LVMH Moët Hennessy - Louis Vuitton SE ("LVMH", "the Company") manages and coordinates the operational activities of all of its subsidiaries, and offers them various management support services, for which they are invoiced, particularly in legal, financial, tax and insurance matters.

1.2 Key events during the ﬁscal year

On November 24, 2019, LVMH Moët Hennessy - Louis Vuitton SE and Tiffany & Co. - an international high jewelry house listed on the New York Stock Exchange - entered into a definitive agreement for the LVMH group to acquire Tiffany for a price of 135 dollars per share, paid in cash. The transaction valued Tiffany at around 16.2 billion US dollars. For more than 180 years, Tiffany has epitomized elegance, innovative design, expert craftsmanship and creative excellence. Founded in 1837, Tiffany is now the number-one luxury brand created in the United States, serving an exacting clientele at more than 300 stores around the world. The transaction is expected to close in mid-2020, subject to approval at Tiffany's Shareholders' Meeting convened on February 4, 2020, and subject to customary approval by regulatory authorities.

2. ACCOUNTING POLICIES AND METHODS

2.1 General framework and changes in accounting policies

The balance sheet and income statement of LVMH have been prepared in accordance with French legal requirements, particularly Regulations 2014-03 and 2015-05 of the Autorité des Normes Comptables (the French accounting standard-setter); it should be noted that the presentation of the income statement was modified in 2011.

The presentation used for the income statement is designed to clearly distinguish between the Company's two types of activities: its asset management activities, related to its equity investments, and its activities related to managing and coordinating all the entities that make up the LVMH group, as described in Note 1.1.

The presentation of the income statement includes three main components of profit or loss: "Financial income/(expense)", "Operating profit/(loss)" and "Exceptional income/(expense)". The total of "Financial income/(expense)" and "Operating profit/(loss)" corresponds to "Recurring profit before tax".

"Financial income/(expense)" includes net income from the management of subsidiaries and other investments; the cost of net financial debt relating, in essence, to the holding of these investments; and other items resulting from the management of subsidiaries or of financial debt, particularly gains or losses on foreign exchange or hedging instruments. Net income from the management of subsidiaries and other investments includes all portfolio management items: dividends, changes in impairment,

changes in provisions for contingencies and losses related to the portfolio, and gains or losses arising on the disposal of investments.

"Operating profit/(loss)" includes costs related to the management of the Company and to the Group's operational management and coordination costs, personnel costs or other administrative costs, less the amount rebilled to subsidiaries, either by billing for management support services or rebilling expenses incurred on their behalf.

"Financial income/(expense)" and "Operating profit/(loss)" include items relating to the financial management of the Company or administrative operations, irrespective of their amounts or their occurrence. "Exceptional income/(expense)" thus comprises only those transactions that, due to their nature, may not be included in "Financial income/(expense)" or "Operating profit/(loss)".

2.2 Intangible assets and property, plant and equipment

Intangible assets, property, plant and equipment are stated at acquisition cost (purchase price and incidental costs, excluding acquisition expenses) or at contribution value, with the exception of property, plant and equipment acquired prior to December 31, 1976 which was revalued in 1978 (revaluation pursuant to the French law of 1976).

Intangible assets are composed of leasehold rights amortized over the duration of the underlying leases and of IT development costs amortized over a period of 3 to 5 years.

Property, plant and equipment are depreciated, where applicable, on a straight-line basis over their estimated useful lives; the following useful lives are applied:

- vehicles:	4 years;
- fixtures, furniture and
leasehold improvements:	5 to 25 years;
- buildings:	40 to 100 years.
Vineyard land is not subject to depreciation.

2.3 Non-current ﬁnancial assets

Non-current financial assets, excluding receivables, loans and deposits, are stated at acquisition cost (excluding incidental costs) or at contribution value.

If the recoverable amount as of the fiscal year-end is lower than the carrying amount, a provision is recorded in the amount of the difference. The recoverable amount is measured with reference to the value in use or the net selling price. Value in use is based on the entities' forecast future cash flows; the net selling price is calculated with reference to ratios or share prices of similar entities, on the basis of valuations performed by independent experts for the purposes of a disposal transaction, or by comparison with recent similar transactions.

Changes in the amount of provisions for impairment of the equity investment portfolio are classified under income from managing subsidiaries and investments.

Portfolio investments held as of December 31, 1976 were revalued in 1978 (revaluation pursuant to the French law of 1976).

2.4 Receivables

Receivables are recorded at their face value. Impairment for doubtful accounts is recorded if their recoverable amount, based on the probability of their collection, is lower than their carrying amount.

2.5 Short-term investments

Short-term investments, including money market investments on which interest is rolled up, are stated at acquisition cost (excluding transaction costs); if their market value is lower than their acquisition cost, an impairment expense is recorded in "Financial income/(expense)" for the amount of the difference.

The market value of short-term investments is calculated, for listed securities, based on average listed share prices during the last month of the fiscal year and translated, where applicable, at year-end exchange rates. The market value of non-listed securities is calculated based on their estimated realizable value.

This calculation is performed on a line-by-line basis, without offsetting any unrecognized capital gains and losses.

In the event of partial investment sales, any gains or losses are calculated based on the FIFO method.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

2.6 Treasury shares and stock option and bonus share plans

2.6.1 LVMH treasury shares

Treasury shares acquired under share repurchase programs or under the terms of the liquidity contract are recorded as short-term investments. Shares held on a long-term basis, or intended to be cancelled or exchanged at a later date are recognized within "Non-current financial assets".

Treasury shares held for share purchase option plans and bonus shares are allocated to these plans.

Treasury shares are recorded, on their date of delivery, at their acquisition cost excluding transaction costs.

The cost of disposals is determined by allocation category using the FIFO method, with the exception of shares held in share purchase option plans for which the calculation is performed for each plan individually using the weighted average cost method.

2.6.2 Impairment of LVMH treasury shares

If the market value of LVMH shares recorded in short-term investments (calculated as described in Note 2.5 above) falls below their acquisition cost, impairment in the amount of the difference is recognized and charged to "Financial income/(expense)", under "Other financial income and expenses".

For LVMH shares allocated to share purchase option plans:

if the plan isnon-exercisable (market value of the LVMH share lower than the exercise price of the option), the calculation of the impairment, charged to "Operating profit" under the heading "Personnel costs", is made in relation to the average price of all non-exercisable plans involved;
if the plan is exercisable (market value of the LVMH share greater than the exercise price of the option), a provision for losses is recognized and calculated as described in Note 2.6.3 below.

No impairment is recognized for LVMH shares allocated to bonus share plans or shares recorded within "Non-current financial assets".

2.6.3 Expense relating to LVMH share-based stock option and bonus share plans

The expense relating to LVMH share-based stock option and bonus share plans is allocated on a straight-line basis over the vesting periods of the plans. It is recognized in the income statement under the heading "Personnel costs", offset by a provision for losses recorded in the balance sheet.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

The expense relating to LVMH share-based stock option and bonus share plans is calculated as follows:

for share purchase option plans, as the difference between the portfolio value of shares allocated to these plans and the corresponding exercise price, if lower;
for bonus share plans, as the portfolio value of shares allocated to these plans.

Share subscription option plans do not give rise to the recognition of an expense.

2.7 Income from equity investments

Amounts distributed by subsidiaries and other investments, in addition to the share in income from GIEs (economic interest groups) subject to statutory clauses providing for the allocation of income to partners, are recognized as of the date that they accrue to the shareholders or partners.

2.8 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the dates of transactions.

Foreign currency receivables and payables are revalued at exchange rates as of December 31. Any resulting unrealized gains and losses are recorded in the cumulative translation adjustment if the receivables and payables are not hedged. Provisions are recorded for unrealized foreign exchange losses as of December 31, except for losses offset by unrealized gains in the same currency.

If the receivables and payables are hedged, the unrealized gains and losses arising on the revaluation are offset against unrealized gains and losses on the associated hedging transactions.

Year-end foreign exchange gains and losses on foreign currency cash and cash equivalents are recorded in the income statement.

2.9 Derivatives

Foreign exchange derivatives are accounted for based on the following principles:

In the case of derivatives designated as hedging instruments:
- they are remeasured atyear-end exchange rates under "Other receivables" and "Other liabilities"; the unrealized gains and losses resulting from this remeasurement offset unrealized gains and losses on the assets and liabilities hedged by these instruments,
- unrealized gains and losses are deferred if these instruments are allocated to future transactions,

- gains and losses realized on maturity are recorded as an offset against gains and losses on the assets and liabilities hedged by these instruments.
In the case of derivatives not designated as hedging instruments (isolated open positions):
- any unrealized gains resulting from their remeasurement atyear-end exchange rates are recognized within "Other receivables" and offset against "Accruals and deferred income";
- any unrealized losses give rise to a provision for losses, recognized within "Foreign exchange gains and losses";
- realized gains and losses are recorded under "Foreign exchange gains and losses".

The swap points are recognized on a pro rata basis over the term of the contracts under "Cost of net financial debt".

Interest rate derivatives designated as hedging instruments are recognized on a pro rata basis over the term of the contracts, without any impact on the face value of the debt whose rate is hedged.

Interest rate derivatives not designated as hedging instruments are remeasured at market value as of the balance sheet date. Any unrealized gains resulting from this remeasurement are deferred; any unrealized losses give rise to a provision for losses.

2.10 Bond issue premiums

Bond issue premiums are amortized over the life of bonds. Issue costs are expensed upon issuance.

2.11 Provisions

A provision is recognized whenever an obligation exists towards a third party resulting in a probable disbursement for the Company, the amount of which may be reliably estimated.

2.12 Income tax - Tax consolidation agreement

LVMH is the parent company of a tax group comprising most of its French subsidiaries (Article 223-Aet seq.of the French General Tax Code). In the majority of cases, the tax consolidation agreement does not alter the tax expense or the right to the benefit from the tax losses carried forward of the subsidiaries concerned: their tax position with respect to LVMH, insofar as they remain part of the tax group, remains identical to that which would have been reported had the subsidiaries been taxed individually. Any additional tax savings or tax expense - i.e. the sum of any difference between the tax recognized by each consolidated company and the tax resulting from the calculation of taxable income for the tax group - is recognized by LVMH.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

3. SIGNIFICANT SUBSEQUENT EVENTS

No subsequent events occurred as of January 28, 2020, the date at which the financial statements were approved for publication.

4. FINANCIAL INCOME/(EXPENSE)

4.1	Income from managing subsidiaries and investments
The income from managing subsidiaries and investments breaks down as follows:

(EUR millions)	2019	2018
Dividends received from French companies	3,947.8	3,355.3
Dividends received from foreign companies	305.5	196.1
Share of income from GIEs (economic interest groups)	(0.6)	(0.9)
Financial income from subsidiaries and investments	4,252.7	3,550.5
Changes in impairment	(169.1)	(133.0)
Changes in provisions for contingencies and losses	-	-
Impairment and provisions related to subsidiaries and investments	(169.1)	(133.0)
Gains and losses on disposal	-	-
Income from managing subsidiaries and investments	4,083.6	3,417.5

See also Note 18 concerning the change in impairment and provisions.

4.2 Cost of net ﬁnancial debt

The cost of net financial debt, including the impact of interest rate hedging instruments, breaks down as follows:

(EUR millions)	2019	2018
Interest and premiums on borrowings	(53.7)	(43.6)
Financial income and revenue	32.9	19.2
Cost of non-Group net financial debt	(20.8)	(24.4)
Intra-Group interest expense	(8.7)	(6.0)
Intra-Group interest income	-	-
Cost of intra-Group net financial debt	(8.7)	(6.0)
Cost of net financial debt	(29.5)	(30.4)

FINANCIAL STATEMENTS

Notes to the parent company financial statements

4.3	Foreign exchange gains and losses
Foreign exchange gains and losses comprise the following items:

(EUR millions)	2019	2018
Foreign exchange gains	43.4	49.0
Foreign exchange losses	(79.0)	(76.2)
Changes in provisions for unrealized foreign exchange losses	(0.8)	(6.2)
Foreign exchange gains and losses	(36.4)	(33.4)

See also Note 18 on changes in provisions.

Foreign exchange gains and losses mainly correspond to those arising on the outstanding borrowings denominated in foreign currency and foreign exchange derivatives entered into for the purposes described in Note 22 (foreign currency net investment hedges of subsidiaries).

4.4 Other ﬁnancial income and expenses
Other financial income and expenses break down as follows:

(EUR millions)	2019	2018
Income and expenses from LVMH shares	9.8	0.4
Other ﬁnancial income	-	-
Other ﬁnancial expenses	(31.9)	(9.2)
Changes in provisions	0.1	(0.1)
Other ﬁnancial income and expenses	(22.0)	(8.9)

See also Note 18 on changes in provisions.

5. SERVICES PROVIDED AND OTHER INCOME

Services provided and other income break down as follows:

(EUR millions)	2019	2018
Services provided	188.5	178.0
Rebilled expenses	182.6	130.5
Real estate revenue	7.7	7.5
Total	378.8	316.0

Services provided and other income concerns related companies:

"services provided" consist of support services (see also Note 1.1);
"rebilled expenses" refer to compensation paid and expenses incurred by LVMH on behalf of related companies;
"real estate revenue" is attributable to the lease of Champagne vineyards owned by LVMH.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

6. PERSONNEL COSTS

In 2019, personnel costs included gross compensation and employers' social security contributions, post-employment benefits, other long-term benefits and the cost of stock option and similar plans (see also Note 12.2.2).

6.1 Gross compensation

Due to the nature of the Company's business, as described in Note 1.1, "Business activity", a significant portion of this compensation is rebilled to Group companies as management support services.

The total gross compensation paid to company officers and members of the Company's Executive Committee for fiscal year 2019 amounted to 55 million euros, including 1.0 million euros in directors' fees.

6.2 Post-employment beneﬁt commitments - Supplementary pensions and retirement bonuses

These commitments mainly relate to members of the Executive Committee, who are covered by a supplementary pension plan after a certain number of years of service, the amount of which is determined on the basis of the average of their three highest amounts of annual compensation.

As of December 31, 2019, the commitment that has not been recognized, net of financial assets covering this commitment, determined according to the same principles as those used for the LVMH group's consolidated financial statements, amounts to 114 million euros.

This commitment includes the impact of the lock-in of benefits in respect of supplementary pension plans covering the Group's Executive Committee members and senior executives, following the entry into force of the French PACTE law and the Order of July 3, 2019.

The discount rate used to estimate this commitment was 0.6%.

The payments made to cover this commitment - 24 million euros in 2019 (17 million euros in 2018) - are recognized under the heading "Personnel costs".

6.3 Average headcount

In 2019, the Company had an average headcount of 20 (2018: 19).

7. OTHER NET MANAGEMENT CHARGES

Management charges include fees, communication expenses, insurance premiums and rent.

Due to the nature of the Company's business, as described in Note 1.1, "Business activity", a significant portion of other management charges are rebilled to Group companies, either by billing for management support services or rebilling expenses incurred on their behalf.

Moreover, when Diageo acquired a stake in the Moët Hennessy group in 1994, Diageo and LVMH entered into an agreement

for the apportionment of common holding company expenses between Moët Hennessy SAS and the other holding companies of the LVMH group. Pursuant to this agreement, the proportion of common holding company expenses re-invoiced by Moët Hennessy to LVMH amounted to 180 million euros.

Taxes, duties and similar levies recognized in "Other management charges" amounted to 3.5 million euros for fiscal year 2019 (3.8 million euros in 2018).

8. EXCEPTIONAL INCOME/(EXPENSE)

"Exceptional income/(expense)" comprised LVMH SE's donation of 100 million euros to restore Notre-Dame de Paris Cathedral and its 10 million euro contribution to help fight forest fires in the Amazon.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

9. INCOME TAXES

9.1 Breakdown of corporate income tax

Corporate income tax breaks down as follows:

(EUR millions)	Proﬁt	Tax (expense)/	Net
	before tax	income	proﬁt
Recurring profit	3,691.1	86.3	3,777.4
Exceptional income/(expense)	(110.0)	1.8	(108.2)

	3,581.1	88.1	3,669.2
Tax in respect of prior fiscal years(a)	-	(10.9)	(10.9)
Provisions for general contingencies	-	3.0	3.0
Impact of tax consolidation	-	50.2	50.2

	3,581.1	130.4	3,711.5

(a) Net of reversals of related provisions.

For information on provisions for general contingencies, see also Note 18.

9.2 Tax losses related to the tax consolidation agreement

As of December 31, 2019, the amount of tax losses that may be reclaimed from LVMH by its subsidiaries totaled 4,424 million euros.

9.3 Deferred tax

Deferred tax arising from temporary differences amounted to a net debit balance of 21.3 million euros as of December 31, 2019, including 16.1 million euros relating to temporary differences that are expected to reverse in 2020.

10. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

(EUR millions)	2019
Carrying amount of ﬁxed assets as of December 31, 2018	93.1
Additions	10.5
Disposals and retirements	(14.8)
Net change in depreciation/amortization	(1.0)
Carrying amount of ﬁxed assets as of December 31, 2019	87.8

11. EQUITY INVESTMENTS

(EUR millions)	2019	2018
Gross amount of equity investments	28,170.2	27,170.2
Impairment	(1,885.5)	(1,716.4)
Carrying amount of equity investments	26,284.7	25,453.8

The investment portfolio is presented in the "Subsidiaries and investments" and "Investment portfolio" tables.

The methods used to calculate the impairment of equity investments are described in Note 2.3. In most cases, impairment is calculated with reference to the value in use of the investment in question, which is determined on the basis of forecast cash flows generated by the entity in question.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

The change in impairment of the investment portfolio is analyzed in Note 18.

See also Note 1.2.

12. TREASURY SHARES AND RELATED DERIVATIVES

12.1 LVMH treasury shares

As of December 31, 2019, the value of the treasury shares held was allocated as follows:

(EUR millions)			2019	2018
	Gross	Impairment	Net	Net
Share subscription option plans	19.6	-	19.6	20.1
Pending retirement	74.5	-	74.5	74.5
Long-term investments	94.1	-	94.1	94.6
Bonus share plans	294.1	-	294.1	302.1
Liquidity contract	14.8	-	14.8	24.5
Short-term investments	308.9	-	308.9	326.6

Portfolio movements during the fiscal year were as follows:

Long-term investments	Share subscription		Pending retirement			Total
(EUR millions)		option plans

	Number	Gross value		Number	Gross value		Number	Gross value
As of January 1, 2019	413,606	20.1		270,000	74.5		683,606	94.6
Purchases	-	-		-	-		-	-
Transfers	(7,504)	(0.4)		-	-		(7,504)	(0.4)
Shares retired	(2,156)	(0.1)		-	-		(2,156)	(0.1)

As of December 31, 2019	403,946	19.6		270,000	74.5		673,946	94.1

FINANCIAL STATEMENTS

Notes to the parent company financial statements

Short-term investments		Other plans		Liquidity contract			Total
(EUR millions)
Number	Gross value		Number	Gross value		Number	Gross value

As of January 1, 2019	1,354,798	302.1		97,000	24.6		1,451,798	326.7
Purchases	182,500	68.2		432,211	145.1		614,711	213.3
Sales	-	-		(491,211)	(154.9)		(491,211)	(154.9)
Transfers	7,504	0.4		-	-		7,504	0.4
Bonus share awards	(477,837)	(76.6)		-	-		(477,837)	(76.6)

As of December 31, 2019	1,066,965	294.1		38,000	14.8		1,104,965	308.9

The net gain recognized on disposals under the liquidity contract during the fiscal year amounted to 9.8 million euros. As of December 31, 2019, based on stock market quotes at that date, the value of shares held under this contract was 15.7 million euros.

12.2 Bonus share and similar plans

12.2.1 Plan characteristics

Share subscription and purchase option plans

At the Shareholders' Meeting of April 18, 2019, the shareholders renewed the authorization given to the Board of Directors, for a period of twenty-six months expiring in June 2021, to grant share subscription or purchase options to Group company employees or senior executives, on one or more occasions, in an amount not to exceed 1% of the Company's share capital.

As of December 31, 2019, this authorization had not been used by the Board of Directors.

No share subscription option or purchase plans have been set up since 2010.

No share subscription option plans were in effect as of December 31, 2019.

Bonus share plans

At the Shareholders' Meeting of April 12, 2018, the shareholders renewed the authorization given to the Board of Directors, for a period of twenty-six months expiring in June 2020, to grant existing or newly issued shares as bonus shares to Group company employees or senior executives, on one or more occasions, in an amount not to exceed 1% of the Company's share capital on the date of this authorization.

For the plans set up in 2015, bonus shares and (if performance conditions are met) bonus performance shares vest to recipients who are French residents for tax purposes after a three-year period, which is followed by a two-year holding period during which recipients may not sell their shares. For recipients who are not French residents for tax purposes, they vest and become freely transferable after a period of four years.

For the plans set up starting in 2016 - except where otherwise stated below - bonus shares and (if performance conditions are met) bonus performance shares vest to all recipients after a three-year period and are freely transferable once they have vested.

Performance conditions

With certain exceptions, the vesting of bonus shares is subject to a condition under which recipients must still be with the Group on the date the shares are allocated.

The vesting of bonus shares under certain plans is subject to conditions related to LVMH's financial performance, which must be met in order for recipients to be entitled to them.

The plans set up on April 16, 2015, October 22, 2015, April 13, 2017, October 25, 2018, and October 24, 2019 provide solely for the allocation of bonus shares subject to a condition related to the performance of the LVMH group.

The plan set up on October 20, 2016 primarily allocates bonus shares subject to a condition related to the performance of the LVMH group, but also allocates a certain number of shares not subject to any performance conditions.

The plan set up on July 26, 2017 includes conditions specifically related to the performance of a subsidiary.

The plan set up on October 25, 2017 primarily allocates bonus shares subject to a condition related to the performance of the LVMH group, but also allocates a certain number of shares subject to a condition specifically related to the performance of a subsidiary, as well as a certain number of shares not subject to any performance conditions.

The plan set up on January 25, 2018 allocates a certain number of bonus shares that are not subject to any performance conditions, but also allocates a certain number of shares subject to a condition specifically related to the performance of a subsidiary.

The plan set up on April 12, 2018 primarily allocates bonus shares subject to a condition related to the performance of the LVMH group, but also allocates a certain number of shares subject to a condition specifically related to the performance of a subsidiary.

For the plan set up on April 16, 2015, bonus shares subject to a condition related to the Group's performance onlyvest if LVMH's consolidated financial statements for the fiscal year in which the plan is set up (fiscal year "Y") show a positive change compared to fiscal year Y-1 in relation to one or more of the following indicators: the Group's profit from recurring operations, net cash from operating activities and operating investments, or current operating margin (hereinafter referred to as the "Indicators"). This condition was met, as a result of which the shares allocated under the April 16, 2015 plan vested on April 16, 2018 for recipients who were French residents for tax purposes and on April 16, 2019 for recipients who were not French residents for tax purposes.

For the plans set up on October 22, 2015 and October 20, 2016, bonus shares subject to a condition related to the Group's performance onlyvest if LVMH's consolidated financial statements for fiscal years Y+1 and Y+2 show a positive change in one or more of the Indicators relative to the fiscal year in which the plan was set up (fiscal year "Y"). For the plan set up on October 22, 2015, the condition was met in 2016 and 2017. For the plan set up on October 20, 2016, the condition was met in 2017 and 2018. Shares allocated under the October 22, 2015 plan vested on October 22, 2018 for recipients who were French residents for tax purposes and on October 22, 2019 for recipients who were not French residents for tax purposes. Shares allocated under the October 20, 2016 plan vested on October 20, 2019 for all recipients.

For the plan set up on April 13, 2017, performance shares only vest if LVMH's consolidated financial statements for the fiscal year in which the plan was set up (fiscal year "Y") show a positive change in one or more of the Indicators compared to fiscal yearY-1. This condition was met. Shares allocated under this plan vested on April 13, 2018 and are subject to a two-year holding period.

For the plan set up on July 26, 2017, half of the bonus shares vest on June 30, 2020 and the other half on June 30, 2021 (or, under certain conditions, all bonus shares vest on June 30, 2021), each time provided that the performance condition regarding revenue and profit from recurring operations for the subsidiary concerned has been met.

For bonus shares allocated under the plan set up on October 25, 2017 and subject to a condition relating to the performance of the LVMH group, shares only vest if LVMH's consolidated financial statements for fiscal years Y+1 and Y+2 show a positive change in one or more of the Indicators relative to the fiscal year in which the plan was set up (fiscal year "Y"). This condition was met in 2018 and 2019.

Shares allocated under the plan set up on October 25, 2017 - for which vesting is subject to a subsidiary's fulfillment of performance conditions - will vest on June 30, 2024 provided

FINANCIAL STATEMENTS

Notes to the parent company financial statements

that (i) quantitative targets regarding its revenue and profit from recurring operations for fiscal year 2023 and (ii) qualitative targets have been met, with vesting advanced to June 30, 2023 if said targets are met in respect of fiscal year 2022.

For the plan set up on January 25, 2018, bonus shares subject to conditions specifically related to the performance of a subsidiary will vest on June 30, 2024 provided that quantitative targets regarding its consolidated revenue and consolidated profit from recurring operations for fiscal year 2023 have been met, with vesting advanced to June 30, 2023 if said targets are met in respect of fiscal year 2022.

For bonus shares allocated under the plan set up on April 12, 2018 and subject to a condition relating to the performance of the LVMH group, shares only vest if LVMH's consolidated financial statements for fiscal years Y+1 and Y+2 show a positive change in one or more of the Indicators relative to the fiscal year in which the plan was set up (fiscal year "Y"). This condition was met in 2019.

The performance condition is measured on a like-for-like basis, with the result being that the impact of acquisitions made during the two calendar years following the reference fiscal year is excluded and, similarly, the impact of disposals having taken place during this same period is neutralized. Only significant transactions (for more than 150 million euros) are restated in the accounts.

Bonus shares allocated under this plan - for which vesting is subject to a subsidiary's fulfillment of performance conditions - will vest on June 30, 2023 provided that quantitative targets regarding its consolidated revenue and consolidated profit from recurring operations are met in respect of fiscal year 2022. If the performance conditions are not met in respect of fiscal year 2022, vesting will be deferred until June 30, 2024, and will concern fewer shares, subject to meeting (i) quantitative targets regarding its consolidated revenue and consolidated profit from recurring operations in respect of fiscal year 2023 and (ii) qualitative targets.

For bonus shares allocated under the plans set up on October 25, 2018 and October 24, 2019 subject to a condition relating to the Group's performance, shares only vest if LVMH's consolidated financial statements for fiscal years Y+1 and Y+2 show a positive change in one or more of the Indicators relative to the fiscal year in which the plan was set up (fiscal year "Y"). For the plan set up on October 25, 2018, this condition was met in 2019.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

12.2.2 Movements relating to stock option and similar plans

Movements during the fiscal year relating to the various LVMH share-based plans were as follows:

(number)	Share subscription	Bonus share
	option plans	awards
Rights not exercised as of January 1, 2019	411,088	1,351,978
Provisional allocations for the period	-	200,077
Options and allocations expired in 2019	(7,142)	(21,500)
Options exercised and allocations vested in 2019	(403,946)	(477,837)
Rights not exercised as of December 31, 2019	-	1,052,718

Previously owned shares were remitted in settlement of the bonus shares vested.

The total expense recognized under "Personnel costs" in 2019 for stock option and similar plans was 101.8 million euros (2018: expense of 70.9 million euros).

The value used as the basis for calculating the 20% social security contribution, payable when the plans vest, was the LVMH closing share price on December 31, 2019, which was 414.20 euros, for plans with provisionally allocated shares, and 375.65 euros for the October 2016 plan, for which shares vested in 2019.

13. OTHER NON-CURRENT FINANCIAL ASSETS

As of December 31, 2019, other non-current financial assets included 133.5 million euros of non-current available for sale financial assets used to hedge cash-settled convertible bonds subscribed in 2016.

14. RECEIVABLES

Receivables break down as follows:

(EUR millions)			2019	2018
	Gross	Impairment	Net	Net
Receivables from related companies	142.5	-	142.5	424.5
of which: ﬁnancial current account	-	-	-	338.4
tax consolidation current accounts	60.3	-	60.3	26.0
Receivables from the State	93.3	-	93.3	147.8
Other receivables	59.1	-	59.1	22.0
of which: currency revaluation of hedging derivatives	51.9	-	51.9	16.7
Total	294.9	-	294.9	594.3

All these receivables mature within one year.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

15. PREPAYMENTS AND ACCRUED INCOME

Prepayments and accrued income mainly consist of issue premiums on non-current available for sale financial assets.

16. SHARE CAPITAL AND SHARE PREMIUM ACCOUNT

16.1 Share capital

The Company's share capital comprises 505,431,285 fully paid-up shares, each with a par value of 0.30 euros.

All the shares comprising the Company's share capital have the same voting and dividend rights, except for registered shares held for at least three years which have double voting rights.

Treasury shares do not have voting or dividend rights.

As of December 31, 2019, the Company's share capital broke down as follows:

	Number	%
Shares with double voting rights	232,293,143	45.96
Shares with single voting rights	271,359,231	53.69

During the fiscal year, 403,946 shares were issued as a result of		503,652,374	99.65
LVMH treasury shares	1,778,911	0.35
the exercise of share subscription options, and 2,156 shares were
retired.
Total number of shares	505,431,285	100.00

16.2 Change in equity

The change in equity during the fiscal year broke down as follows:

(EUR millions)	Number	Share	Share	Other	Retained	Interim	Net profit	Total
	of shares	capital	premium	reserves and	earnings	dividend	for the	equity
			account	regulated			fiscal year
				provisions
As of December 31, 2018
before appropriation
of net profit	505,029,495	151.5	2,298.5	388.1	10,764.7	(1,005.7)	3,384.1	15,981.2
Appropriation of net profit for 2018	-	-	-	-	3,384.1	-	(3,384.1)	-
2018 dividends	-	-	-	-	(3,030.1)	1,005.7	-	(2,024.4)
Impact of treasury shares	-	-	-	-	12.6	-	-	12.6
As of December 31, 2018
after appropriation
of net profit	505,029,495	151.5	2,298.5	388.1	11,131.3	-	-	13,969.4
Exercise of subscription options	403,946	0.1	20.4	-	-	-	-	20.5
Retirement of shares	(2,156)	-	(0.1)	-	-	-	-	(0.1)
2019 interim dividend	-	-	-	-	-	(1,111.9)	-	(1,111.9)
Impact of treasury shares	-	-	-	-	-	3.9	-	3.9
Net profit for fiscal year 2019	-	-	-	-	-	-	3,711.5	3,711.5

As of December 31, 2019
before appropriation
of net profit	505,431,285	151.6	2,318.8	388.1	11,131.3	(1,108.0)	3,711.5	16,593.3

The appropriation of net profit for fiscal year 2018 resulted from the resolutions of the Combined Shareholders' Meeting of April 18, 2019.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

17. RESERVES AND REVALUATION ADJUSTMENTS

Reserves break down as follows:

(EUR millions)	2019	2018
Legal reserve	15.2	15.2
Regulated reserves	331.3	331.3
Revaluation reserves	41.5	41.5
Total	388.0	388.0

17.1 Regulated reserves

Regulated reserves comprise the special reserve for long-term capital gains and restricted reserves, in the amount of 2.2 million euros, which were created as a result of the reduction of capital

performed at the same time as the conversion of the Company's share capital into euros. The special reserve for long-term capital gains may only be distributed after tax has been levied.

17.2 Revaluation adjustments

Revaluation adjustments are the result of revaluations carried out in 1978 pursuant to the French law of 1976.

The adjustments concern the following non-amortizable fixed assets:

(EUR millions)	2019	2018
Vineyard land	17.9	17.9
Equity investments (Parfums Christian Dior)	23.6	23.6
Total	41.5	41.5

18. CHANGES IN IMPAIRMENT AND PROVISIONS

Changes in asset impairment and provisions break down as follows:

(EUR millions)	December 31,	Increases	Amounts used	Amounts released	December 31,
	2018				2019
Equity investments	1,716.4	170.2	-	(1.1)	1,885.5
LVMH treasury shares	0.1	-	(0.1)	-	-
Other assets	-	-	-	-	-
Asset impairment	1,716.5	170.2	(0.1)	(1.1)	1,885.5
Stock option and similar plans	59.5	48.9	(35.2)	-	73.2
General contingencies	570.5	1.6	-	(4.6)	567.5
Unrealized forex losses	7.6	8.4	(7.6)	-	8.4
Other expenses	54.7	25.8	(2.2)	-	78.3
Provisions for contingencies and losses	692.3	84.7	(45.0)	(4.6)	727.4

Total	2,408.8	254.9	(45.1)	(5.7)	2,612.9
of which: financial income/(expense)		178.6	(7.7)	(1.1)
operating profit/(loss)		74.7	(37.4)	-
of which: Personnel costs		74.7	(37.4)	-
other		1.6	-	(4.6)
		254.9	(45.1)	(5.7)

Provisions for general contingencies correspond to an estimate of the impact on assets and liabilities of risks, disputes, or actual or probable litigation arising from the Company's activities or those of its subsidiaries; such activities are carried out worldwide, within what is often an imprecise regulatory framework that is different for each country, changes over time, and applies to areas ranging from product composition to the tax computation.

In particular, the Company may be subject to tax inspections and, in certain cases, to rectification claims from tax administrations.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

These rectification claims, together with any uncertain tax positions that have been identified but not yet officially notified, give rise to appropriate provisions, the amount of which is regularly reviewed in accordance with the criteria of Regulation 2014-03 of the Autorité des Normes Comptables (France's accounting standards authority). Changes in provisions mainly reflect the resolution of certain discussions with tax authorities, customs or other administrations, both in France and abroad.

See also Note 11, "Equity investments".

FINANCIAL STATEMENTS

Notes to the parent company financial statements

SUBSIDIARIES AND INVESTMENTS

Company		Registered	Currency	Share		Equity Percentage	Carrying amount		Loans and	Deposits		Revenue		Net profit/	Dividends
(in millions of units		office			capital(a)		other than	of share	of shares held(c)		advances	and		before		(loss) from	received
of currency )								share	capital					provided(c)	sureties		taxes(a) (d)	the prior	in 2019(c)
							Gross		Net
								capital(a) (b)	held					granted(c)			fiscal year(a)

1. Subsidiaries (>50%)
Sofidiv SAS		Paris		EUR	8,427.4	4,350.6		100.00%	10,116.4	10,116.4	-	-	1,092.2	1,049.0	569.5
Grandville SA	Luxembourg		EUR	100.0	542.8		100.00%	6,000.0	6,000.0	-	-	-	(0.2)		-
Bulgari SpA		Rome		EUR	24.5	570.3		100.00%	4,268.7	4,268.7	-	-	327.1	131.2	250.0
LVMH Miscellanées SA		Paris		EUR	1,552.5	(294.1)		99.99%	3,290.5	1,418.2	-	-	0.2	(174.9)		-
Vicuna Holding SpA		Milan		EUR	110.1	1,659.1		100.00%	1,533.4	1,533.4	-	-	76.3	78.0	52.0
Moët Hennessy SAS		Paris		EUR	428.7	2,983.1		58.67%	1,018.9	1,018.9	-	1.8	1,473.3	977.7	212.3
LV Group SA		Paris		EUR	35.6	1,133.4		99.95%	822.4	822.4	-	-	3,095.8	2,943.9		2,698.4
Rimowa Group GmbH		Cologne		EUR	642.8	(0.1)		100.00%	642.8	642.8	-	-	-	(0.1)		-
Le Bon Marché SA		Paris		EUR	29.4	125.1		99.99%	259.2	259.2	-	-	514.4	14.1		15.0
Parfums Christian Dior SA	Paris		EUR	2.6	931.8		99.99%	76.5	76.5	-	6.5	1,850.3	443.3		360.0
Moët Hennessy Inter. SAS	Paris		EUR	151.6	521.6		58.67%	74.4	74.4	-	-	239.3	235.8		92.6
LVMH Services Ltd		London		GBP	34.4	(8.0)		100.00%	43.8	30.6	-	-	2.7	(0.4)		-
LVMH KK		Tokyo		JPY	1,150.0	1,204.0		100.00%	7.6	7.6	-	403.4	1,169.3	344.0		0.5

2. Investments (>10% and <50%)
GIE LVMH Services		Paris		EUR	44.3	(2.5)		20.00%	8.9	8.9	-	-	2.5	(2.5)		-

3. Investments (<10%)
Loewe SA		Madrid		EUR	5.3	43.1		5.44%	6.7	6.7	-	-	344.2	60.2		3.0

4. Other subsidiaries and investments


Total												28,170.2	26,284.7				411.7			4,253.3

In local currency for foreign subsidiaries.
Prior to the appropriation of earnings for the ﬁscal year.
In millions of euros.
Including ﬁnancial income from subsidiaries and investments.

FINANCIAL STATEMENTS

Notes to the parent company financial statements

COMPANY RESULTS OVER THE LAST FIVE FISCAL YEARS

(EUR millions, except earnings per share, expressed in euros)	2015	2016	2017	2018	2019
1. Share capital
Share capital	152.1	152.1	152.1	151.5	151.6
Number of ordinary shares outstanding	507,139,110	507,126,088	507,042,596	505,029,495	505,431,285
Maximum number of future shares to be created:
- through conversion of bonds	-	-	-	-	-
- through exercise of equity warrants	-	-	-	-	-
- through exercise of share subscription options	2,821,150	1,903,010	1,180,692	411,088	-
2. Operations and profit for the fiscal year
Income from investments and other revenue	6,842.7	3,441.3	2,912.8	3,866.5	4,631.5
Profit before taxes, depreciation, amortization
and movements in provisions	5,971.8	2,917.7	2,523.0	3,322.8	3,789.1
Income tax income/(expense)(a)	-	-	-	-	-
Profit after taxes, depreciation, amortization
and movements in provisions(b)	6,019.8	2,645.3	2,853.2	3,384.1	3,711.5
Profit distributed as dividends(c)	1,800.3	2,028.5	2,535.2	3,030.2	3,436.9
3. Earnings per share
Earnings per share after taxes but before depreciation,
amortization and movements in provisions	11.79	5.45	5.72	7.04	7.75
Earnings per share after taxes, depreciation,
amortization and movements in provisions(b)	11.87	5.22	5.63	6.70	7.34
Gross dividend distributed per share(c) (d)	3.55	4.00	5.00	6.00	6.80
4. Employees
Average number of employees	19	18	18	19	20
Total payroll	77.7	103.4	103.5	161.0	219.7
Amounts paid in respect of employee benefits	19.3	15.7	16.8	20.1	33.0

Excluding the impact of the tax consolidation agreement, the share of tax proﬁts of"ﬂow-through" entities, tax in respect of prior ﬁscal years and provisions.
Including the impact of the tax consolidation agreement, the share of tax proﬁts of"ﬂow-through" entities, tax in respect of prior ﬁscal years and provisions.
Amount of the distribution resulting from the resolution of the Shareholders' Meeting, before the impact of LVMH treasury shares held as of the distribution date. For ﬁscal year 2019, amount proposed at the Shareholders' Meeting of April 16, 2020.
Excluding the impact of tax regulations applicable to the recipient.

FINANCIAL STATEMENTS

Statutory Auditors' reports

STATUTORY AUDITORS' REPORT ON THE PARENT COMPANY FINANCIAL STATEMENTS

Fiscal year ended December 31, 2019

To the Shareholders' Meeting of LVMH Moët Hennessy - Louis Vuitton,

1. Opinion

In compliance with the engagement entrusted to us by your Shareholders' Meeting, we have audited the accompanying parent company financial statements of LVMH Moët Hennessy - Louis Vuitton for the fiscal year ended December 31, 2019.

In our opinion, the parent company financial statements give a true and fair view of the Company's assets, liabilities and financial position as of December 31, 2019 and of the results of its operations for the fiscal year then ended in accordance with French accounting principles.

The audit opinion expressed above is consistent with our report to the Performance Audit Committee.

2. Basis for opinion

Audit framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the "Statutory Auditors' responsibilities for the audit of the parent company financial statements" section of our report.

Independence

We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2019

to the date of our report. We did not provide any prohibited non-audit services referred to in Article 5 (1) of Regulation (EU) No. 537/2014 or in the French Code of Ethics (Code de déontologie)for Statutory Auditors.

3. Justiﬁcation of assessments - Key audit matters

In accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code (Code de commerce)relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement which, in our professional judgment, were of most significance in our audit of the parent company financial statements for the fiscal year, as well as how we addressed those risks.

These matters were addressed in the context of our audit of the parent company financial statements as a whole, and in forming our opinion expressed above. We do not provide a separate opinion on specific items of the parent company financial statements.

Valuation of equity investments

Risk identified

As of December 31, 2019, the net amount of equity investments recognized as assets amounted to 26 billion euros, after impairment of 1.9 billion euros, representing 96% of total assets. They are stated at acquisition cost (excluding incidental costs) or at contribution value, after revaluation pursuant to French law where appropriate.

If the recoverable amount as of the fiscal year-end is lower than the carrying amount, a provision is recorded in the amount of the difference. As specified in Note 2.3 to the parent company financial statements, the recoverable amount is measured with reference to the value in use or the net selling price. Value in use is based on the entities' forecast future cash flows. The net selling price is calculated with reference to ratios or share prices of similar entities, on the basis of valuations performed by independent experts for the purposes of a disposal transaction, or by comparison with recent similar transactions.

We considered the valuation of equity investments to be a key audit matter, due to their significance in the Company's financial statements, and because the determination of their recoverable amount, especially regarding value in use, requires the use of assumptions, estimates and other forms of judgment with a high degree of uncertainty.

FINANCIAL STATEMENTS

Statutory Auditors' reports

Our response

We assessed the methods used to perform these impairment tests, as described in Note 2.3 to the parent company financial statements, and focused our work primarily on the most significant equity investments, and those for which the recoverable amount is close to the net carrying amount.

We assessed the data and assumptions that served as the basis for the main estimates used, in particular forecast cash flows, long-term growth rates and the discount rates applied. We analyzed the consistency of forecasts with past performance and market outlook, and conducted impairment test sensitivity analyses. In addition, where the recoverable amount is estimated by comparison with recent similar transactions, we corroborated the analyses provided with available market data. These analyses were carried out in conjunction with our valuation experts.

Lastly, we assessed the appropriateness of the information disclosed in the notes to the parent company financial statements.

Provisions for contingencies and losses

Risk identified

As of December 31, 2019, provisions for contingencies and losses amounted to 727 million euros and essentially comprised provisions for general contingencies amounting to 568 million euros.

The Company's activities and those of its subsidiaries are carried out in an international regulatory environment that is often imprecise, varies from country to country, changes over time and applies to areas ranging from product composition to the tax computation.

In particular, as stated in Note 18 to the parent company financial statements, the Company may be subject to tax inspections and, in certain cases, to rectification claims from tax administrations. These rectification claims, together with any uncertain tax positions that have been identified but not yet officially notified, give rise to appropriate provisions, the amount of which is regularly reviewed in accordance with the criteria of Regulation 2014-03 of the Autorité des Normes Comptables (France's accounting standards authority). Changes in provisions mainly reflect the resolution of certain discussions with tax authorities, customs or other administrations, both in France and abroad.

We considered this to be a key audit matter due to the significance of the amounts concerned and the level of judgment required to evaluate these provisions within a constantly evolving international regulatory environment.

Our response

In the context of our audit of the parent company financial statements, our work consisted in particular in:

assessing the procedures implemented by the Company in order to identify and catalog all risks;
obtaining an understanding of the risk analysis performed by the Company and the corresponding documentation and, where applicable, reviewing written confirmations received from external advisors;
assessing, with the support of our experts, in particular our tax specialists, the main risks identified and assessing the reasonableness of the assumptions made by management to estimate the amount of the provisions;
assessing the appropriateness of information relating to these risks disclosed in the notes to the parent company financial statements.

4. Speciﬁc veriﬁcations

We also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations.

Information provided in the Management Report and in the other documents given to shareholders related to the ﬁnancial position and the parent company ﬁnancial statements

We have no matters to report as to the fair presentation and the consistency with the parent company financial statements of the information provided in the Management Report of the Board of Directorsand in the other documents on the financial position and the

parent company financial statements given to shareholders.

We attest to the fair presentation and the consistency with the parent company financial statements of the information on payment terms set out in Article D.441-4 of the French Commercial Code.

FINANCIAL STATEMENTS

Statutory Auditors' reports

Report on corporate governance

We attest that the Board of Directors' report on corporate governancesets out the information required by Articles L.225-37-3 and L.225-37-4 of the French Commercial Code.

Concerning the information provided in accordance with the requirements of Article L.225-37-3 of the French Commercial Code relating to compensation and benefits paid or awarded to company officers and any other commitments made in their favor, we have verified its consistency with the financial statements or the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from controlled companies included in the scope of consolidation. Based on this work, we attest to the accuracy and fair presentation of this information.

With respect to the information relating to items that your Company considered likely to have an impact in the event of a public purchase or exchange offer, provided pursuant to Article L.225-37-5 of the French Commercial Code, we verified their compliance with the source documents communicated to us. Based on our work, we have no matters to report regarding this information.

Other information

In accordance with French law, we have verified that the required information concerning the purchase of investments and controlling interests and the identity of the shareholders and holders of the voting rights has been properly disclosed in the Management Report.

5. Report on other legal and regulatory requirements

Appointment of the Statutory Auditors

Our audit firms were appointed as Statutory Auditors of LVMH Moët Hennessy - Louis Vuitton by your Shareholders' Meeting held on April 14, 2016.

As of December 31, 2019, our audit firms were in the fourth consecutive year of their engagement, it being specified that Ernst & Young et Autres and Ernst & Young Audit, members of the international EY network, were respectively Statutory Auditors from 2010 to 2015 and from 1988 to 2009.

6. Responsibilities of management and those charged with governance for the parent company ﬁnancial statements

Management is responsible for the preparation and fair presentation of the parent company financial statements in accordance with French accounting principles and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company financial statements, management is responsible for assessing the Company's ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations.

The Performance Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risk management systems and, where applicable, internal audit, regarding the accounting and financial reporting procedures.

The parent company financial statements have been approved by the Board of Directors.

7. Statutory Auditors' responsibilities for the audit of the parent company ﬁnancial statements

Objectives and audit approach

Our role is to issue a report on the parent company financial statements. Our objective is to obtain reasonable assurance as to whether the parent company financial statements taken as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As specified in Article L.823-10-1 of the French Commercial Code (Code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of management of the affairs of the Company.

FINANCIAL STATEMENTS

Statutory Auditors' reports

As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditor exercises professional judgment throughout the audit and furthermore:

identifies and assesses the risks of material misstatement of the parent company financial statements, whether due to fraud or error; designs and performs audit procedures responsive to those risks; and obtains audit evidence considered to be sufficient and appropriate to provide a basis for its opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or overriding internal control;
obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control;
assesses the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management in the parent company financial statements;
assesses the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of its audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the Statutory Auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the parent company financial statements or, if such disclosures are not provided or inadequate, to issue a qualified or adverse audit opinion;
assesses the overall presentation of the parent company financial statements and whether these statements represent the underlying transactions and events in a manner that achieves fair presentation.

Report to the Performance Audit Committee

We submit a report to the Performance Audit Committee which includes in particular a description of the scope of the audit and the audit program implemented, as well as the results of our audit. We also report any significant deficiencies in internal control regarding the accounting and financial reporting procedures that we have identified.

Our report to the Performance Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most significance in the audit of the parent company financial statements of the current period and which are therefore the key audit matters that we are required to describe in this report.

We also provide the Performance Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014,

confirming our independence within the meaning of the rules applicable in France such as they are set out in particular by Articles L.822-10 to L.822-14 of the French Commercial Code (Code de commerce)and in the French Code of Ethics (Code de déontologie)for

Statutory Auditors. We discuss any risks that may reasonably be thought to bear on our independence, and the related safeguards, with the Performance Audit Committee.

Courbevoie and Paris-La Défense, February 3, 2020

The Statutory Auditors

French original signed by

MAZARS	ERNST & YOUNG Audit
Loïc Wallaert	Isabelle Sapet	Gilles Cohen Patrick Vincent-Genod

This is a free translation into English of the Statutory Auditors' report on the parent company financial statements of the Company, issued in French. It is provided solely for the convenience of English-speaking users. This Statutory Auditors' report includes information required under European regulations and French law, such as information about the appointment of the Statutory Auditors and the verification of information concerning the Group presented in the Management Report. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

FINANCIAL STATEMENTS

Statutory Auditors' reports

STATUTORY AUDITORS' SPECIAL REPORT ON REGULATED RELATED-PARTY AGREEMENTS

To the Shareholders' Meeting of LVMH Moët Hennessy - Louis Vuitton,

In our capacity as Statutory Auditors of your Company, we hereby present to you our report on related-party agreements.

We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreements indicated to us, or that we may have identified in the performance of our engagement, as well as the reasons justifying why they benefit the Company. We are not required to give our opinion as to whether they are beneficial or appropriate or to ascertain the

existence of other agreements. It is your responsibility, in accordance with Article R.225-31 of the French Commercial Code (Code de commerce), to assess the relevance of these agreements prior to their approval.

In accordance with Article R.225-31 of the French Commercial Code, we are also required to inform you of the continuation of the implementation, during the fiscal year under review, of any agreements previously approved at a Shareholders' Meeting.

We performed those procedures which we deemed necessary in compliance with professional guidance issued by the French National Institute of Statutory Auditors (Compagnie Nationale des Commissaires aux comptes)relating to this engagement. These procedures

consisted in verifying the consistency of the information provided to us with the relevant source documents.

AGREEMENTS SUBMITTED FOR APPROVAL AT THE SHAREHOLDERS' MEETING

In accordance with Article L.225-40 of the French Commercial Code, we have been notified of the following related-party agreement entered into during the past fiscal year, which received prior authorization from your Board of Directors.

With Groupe Arnault SEDCS

Persons concerned:Bernard Arnault, Antoine Arnault and Nicolas Bazire, Directors.

Nature and purpose:Assistance agreement entered into with Groupe Arnault SEDCS

Conditions and reasons justifying why the Company benefits from this agreement

At its meeting of January 29, 2019, your Board of Directors authorized the signing of a new amendment, executed on June 13, 2019, to the assistance agreement of July 31, 1998 relating to various services - mainly in the fields of legal assistance and financial engineering, business and real estate law - entered into between your Company and Groupe Arnault SEDCS, which has a number of employees who are experts in their fields.

The assistance agreement entered into with Groupe Arnault SEDCS covers a wide range of high value-added services, mainly relating to financial, legal, tax and administrative matters, provided by specialists with considerable experience in these areas. It provides for the sharing of skills as well as certain costs, thus reducing expenses in the interests of both parties.

The amendment to this agreement has to do with the fees stipulated therein, which were set at 1,500,000 euros per year beginning on January 1, 2019.

During the fiscal year ended December 31, 2019, your Company paid 1,500,000 euros (exclusive of VAT) to Groupe Arnault SEDCS.

FINANCIAL STATEMENTS

Statutory Auditors' reports

AGREEMENTS PREVIOUSLY APPROVED AT A SHAREHOLDERS' MEETING

In accordance with Article R.225-30 of the French Commercial Code, we have been notified that the implementation of the following agreements, which were approved at a Shareholders' Meeting in a prior fiscal year, remained in effect during the fiscal year under review.

With Moët Hennessy SAS, a subsidiary of your Company

1. LVMH group holding company cost-sharing agreement

Nature, purpose and conditions

Diageo holds a 34% stake in Moët Hennessy SAS. When that holding was acquired in 1994, an agreement was entered into between Diageo and your Company for the apportionment of shared holding company costs between Moët Hennessy SAS and the other holding companies of the LVMH group.

This apportionment of shared costs is laid out in the shareholders' agreement entered into in 1994 with the Diageo group.

Under this agreement, Moët Hennessy SAS assumed 14.2% of shared costs in 2019 and accordingly re-invoiced the excess costs incurred to your Company. After re-invoicing, the amount of shared costs assumed by Moët Hennessy SAS under this agreement was 25.4 million euros for the fiscal year ended December 31, 2019.

With Bernard Arnault, Antonio Belloni and Nicolas Bazire, Directors

2. Funding of the supplementary pension plan

Nature, purpose and conditions

The funding of a supplementary pension plan, via an insurance company, which was set up in 1999 and modified in 2004 and 2012 for the benefit of your Company's Executive Committee members, employees and senior executives of French companies, some of whom are also Directors, remained in effect during fiscal year 2019.

The resulting expense for your Company in fiscal year 2019 is included in the amount disclosed in Note 33.4 to the consolidated financial statements.

With Christian Dior SE

Persons concerned:Bernard Arnault, Nicolas Bazire and Delphine Arnault, Directors.

3. Service agreement entered into with Christian Dior SE

Nature, purpose and conditions

The service agreement of June 7, 2002, amended on May 16, 2014 and relating to legal services, particularly for corporate law issues and the management of securities services, entered into between your Company and Christian Dior SE, remained in effect during fiscal year 2019.

Pursuant to this agreement, your Company received annual fees of 60,000 euros (exclusive of VAT) from Christian Dior SE for the fiscal year ended December 31, 2019.

Courbevoie and Paris-La Défense, February 3, 2020

The Statutory Auditors

French original signed by

MAZARS	ERNST & YOUNG Audit
Loïc Wallaert	Isabelle Sapet	Gilles Cohen Patrick Vincent-Genod

This is a free translation into English of a report issued in French and is provided solely for the convenience of English- speaking users. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

Design and production: Agence Marc Praquin

For any further information:

LVMH, 22 avenue Montaigne - 75008 Paris Tel. +33 1 44 13 22 22 - Fax +33 1 44 13 21 19

www.lvmh.com

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LVMH - Moët Hennessy Louis Vuitton SA published this content on 27 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 March 2020 19:57:03 UTC

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Company Profile

LVMH Moët Hennessy Louis Vuitton SE is the world leader in luxury products. Net sales break down by family of products as follows: - fashion and leather items (48.9%): brands such as Louis Vuitton, Kenzo, Celine, Fendi, Marc Jacobs, Givenchy, etc.; - watches and jewels (12.8%): Bulgari, TAG Heuer, Zenith, Hublot, Chaumet, Fred brands, Tiffany, etc.; - perfumes and cosmetics products (9.6%): perfumes (Christian Dior, Guerlain, Loewe, Kenzo brands, etc.), makeup products (Make Up For Ever, Guerlain, Acqua di Parma, etc.), etc.; - wines and spirits (7.7%): champagnes (Moët & Chandon, Mercier, Veuve Clicquot Ponsardin, Dom Pérignon brands, etc.; No. 1 worldwide), wines (Cape Mentelle, Château D'Yquem, etc.), cognacs (mainly Hennessy; No. 1 worldwide), whisky (mainly Glenmorangie), etc.; The remaining sales (21%) are from selective distribution through the Sephora, DFS, Miami Cruiseline chains and Le Bon Marché and La Samaritaine department stores. At the end of 2023, products are marketed via a network of 6,097 outlets located throughout the world. Net sales are distributed geographically as follows: France (7.9%), Europe (16.4%), Japan (7.3%), Asia (30.8%), the United States (25.3%) and other (12.3%).

Sector

Apparel & Accessories

Calendar

2024-07-22 - Q2 2024 Earnings Release (Projected)

Related indices

CAC 40 , EURO STOXX 50 , STOXX EUROPE 600 (EUR)

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Income Statement Evolution

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Analysis / Opinion

LVMH : Limited downside

April 17, 2024 at 12:41 pm EDT

LVMH Moët Hennessy Louis Vuitton SE : More dazzling results

July 26, 2023 at 05:07 am EDT

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Ratings for LVMH

Trading Rating

Investor Rating

ESG Refinitiv

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Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

778 EUR

Average target price

879.2 EUR

Spread / Average Target

+13.01%

Consensus

EPS Revisions

Estimates Revisions

Quarterly earnings - Rate of surprise

Company calendar

Sector Other Apparel & Accessories

	1st Jan change	Capi.
LVMH	+7.43%	416B
CHRISTIAN DIOR SE	+4.24%	141B
LULULEMON ATHLETICA INC.	-29.59%	45.36B
MONCLER S.P.A.	+16.52%	18.75B
RALPH LAUREN CORPORATION	+15.76%	10.67B
LEVI STRAUSS & CO.	+27.51%	8.39B
PVH CORP.	-9.28%	6.39B
LI NING COMPANY LIMITED	+0.96%	6.44B
BOSIDENG INTERNATIONAL HOLDINGS LIMITED	+29.34%	6.35B
GILDAN ACTIVEWEAR INC.	+9.33%	5.9B

Other Apparel & Accessories

	Nominal	Floating-rate	Issue	Maturity	Par value as of	Accrued	Total
	interest rate	swap	price(a)		December 31,	interest	(EUR millions)
			(as % of the		2019	after swap
			par value)		(EUR millions)	(EUR millions)
EUR 700,000,000; 2019	0.125%	-	99.470%	2023	700.0	0.7	700.7
EUR 300,000,000; 2019	-	-	99.937%	2021	300.0	-	300.0
EUR 600,000,000; 2013	1.750%	66.67%	99.119%	2020	600.0	0.9	600.9
EUR 1,200,000,000; 2017	0.750%	25.00%	99.542%	2024	1,200.0	4.8	1,204.8
EUR 800,000,000; 2017	0.375%	25.00%	99.585%	2022	800.0	1.7	801.7
GBP 400,000,000; 2017	1.000%	25.00%	99.583%	2022	470.1	0.8	470.9
EUR 1,250,000,000; 2017	-	-	99.609%	2020	1,250.0	-	1,250.0
USD 750,000,000; 2016	-	-	102.806%	2021	667.6	-	667.6
EUR 650,000,000; 2014	1.000%	Total	99.182%	2021	650.0	0.4	650.4

Total					6,637.7	9.3	6,647.0

(EUR millions)	Total			Amount	Of which:	Of which:
					Accrued	Related
		Less than	From 1 to	More than
		expenses	companies
		1 year	5 years	5 years
Trade accounts payable	215.6	215.6	-	-	203.7	152.7
Tax and social security liabilities	47.6	47.6	-	-	33.6	-
Other debt	206.0	141.0	65.0	-	102.0	103.0
of which: Tax consolidation current accounts	101.2	101.2	-	-	-	101.2

Other debt	469.2	404.2	65.0	-	339.3	255.7

(EUR millions)	Fixed rate	Floating rate	Total(a)
Non-current financial assets (see Note 13)	133.5	-	133.5
Bond debt (see Note 19)	(6,637.7)	-	(6,637.7)

Total financial positions	(6,504.2)	-	(6,504.2)
Hedging instruments	1,677.3	(1,677.3)	-
Financial positions after hedging	(4,826.9)	(1,677.3)	(6,504.2)

(EUR millions)	Nominal			Expiration period	Market
	amount				value(a)
	Less than	From 1 to	More than
		1 year	5 years	5 years
Floating-rate payer swap	2,020.1	400.0	1,620.1	-	(22.9)
Fixed-rate payer swap	342.8	-	342.8	-	(3.7)
Other	-	-	-	-	-

(EUR millions)	US dollar	Pound sterling	Total(a)
Non-current financial assets (see Note 13)	133.5	-	133.5
Bond debt (see Note 19)	(667.6)	(470.1)	(1,137.7)

Total financial positions	(534.1)	(470.1)	(1,004.2)
Derivatives used to hedge financial positions	534.1	470.1	1,004.2
Net financial position	-	-	-

Borrowings	Total			Amount	of which:	of which:
(EUR millions)					Accrued	Related
		Less than	From 1 to	More than	expenses	companies
		1 year	5 years	5 years
Bonds	6,647.0	1,859.3	4,787.7	-	9.3	-
Bank loans and borrowings	0.6	0.6	-	-	-	-
Intra-Group financial debt	2,805.3	2,805.3	-	-	0.5	2,805.3
Other financial debt	2,805.9	2,805.9	-	-	0.5	2,805.3
Gross borrowings	9,452.9	4,665.2	4,787.7	-	9.8	2,805.3

23.2	Other commitments given in favor of third parties

(EUR millions)	As of December 31,
		2019
Guarantees and comfort letters granted to subsidiaries or other Group companies	10,421.5
23.3	Other commitments given in favor of LVMH

Equity investments	% of direct	Carrying
(EUR millions)	ownership	amount
508,493,000 shares with a par value of EUR 16.57 each in Soﬁdiv SAS	100.00	10,116.4
100,000,000 shares with a par value of EUR 1 each in Grandville SA (Luxembourg)	100.00	6,000.0
245,000 shares with a par value of EUR 100 each in Bulgari SpA (Italy)	100.00	4,268.7
110,120,000 shares with a par value of EUR 1 each in Vicuna Holding SpA (Italy)	100.00	1,533.4
103,502,647 shares with a par value of EUR 15 each in LVMH Miscellanées SA	99.99	1,418.2
35,931,661 shares with a par value of EUR 7 each in Moët Hennessy SAS	58.67	1,018.9
23,743,207 shares with a par value of EUR 1.50 each in LV Group SA	99.95	822.4
25,000 shares with a par value of EUR 1 each in Rimowa Group GmbH (Germany)	100.00	642.8
1,961,052 shares with a par value of EUR 15 each in Le Bon Marché SA	99.99	259.2
68,960 shares with a par value of EUR 38 each in Parfums Christian Dior SA	99.99	76.5
31,482,978 shares with a par value of EUR 2.82 each in Moët Hennessy International SAS	58.67	74.4
34,414,870 shares with a par value of GBP 1 each in LVMH Services Ltd (UK)	100.00	30.6
7,000 shares with a par value of EUR 1,265 each in the GIE LVMH Services	20.00	8.9
23,000 shares with a par value of JPY 50,000 each in LVMH KK (Japan)	100.00	7.6
9,660 shares with a par value of EUR 30 each in Loewe SA (Spain)	5.44	6.7

Total		26,284.7

LVMH

Equities

MC

FR0000121014

Apparel & Accessories

LVMH Moët Hennessy Louis Vuitton : Management report of the Board of Directors - Version as of March 27, 2020

EPS Revisions