LVMH Moët Hennessy - Louis Vuitton, Société Européenne (MC) Earnings Call Transcript & Summary

Good morning to all. I'm delighted to welcome you to the Shareholders' Meeting of LVMH. I declare the meeting open, and I thank you all for joining us here today. We have offered the possibility to shareholders later to ask questions, and we'll have a clip to show you about that. The scrutineers today represented Christian Dior by Antoine Arnault and Financiere Agache by Nicolas Bazire. As Secretary, we have Jerome Sibille, our Legal Counsel. You're familiar with the agenda. I won't dwell on it. And this Shareholders' Meeting, as we normally do, will be organized in the form of presentations, the figures, comments, discussion before the vote. Just a brief word before handing over to Mr. Guiony to stress that your company in 2022 achieved a record year. You have the figures shown here. And we have delivered results that make us extremely confident in the future, especially the group's potential. You have the results before you. These results are a consequence of everyone's contribution. I'll return to that after Jean-Jacques Guiony on the figures on what we view as essential. In other words, other things apart from figures. Over to you.

Good morning, everyone. So some quick comments about the figures for the year 2022, also 2023 because we published the numbers for the first quarter. So starting with sales for 2022. The breakdown is more or less the same every year. So we look at organic growth, 17%. The structure impact was 0%, unlike the previous year, where we had consolidated Tiffany. So there was a major structure impact there. And the currency effect, a positive effect, 6%, and that was because of the U.S. dollar against the main currencies, especially the euro. So we were close to [ EUR 80,000 million ] in sales last year. That is, of course, a record. For Q1 of this year, what you have is we are sticking to the same trend, 17% -- organic revenue up 17%, the same trend as last year, but the difference is the currency effect is 0%. Dollar is stable compared to last year at a high level. We're not complaining, but no structural impact either. So we're looking at 17% and EUR 21 billion for Q1 in sales. If you look at the distribution of sales as to the main country is the United States, 27% of total sales. The main region is Asia, 30% of sales. There is a progress in Europe, 16%, and Japan is stable at 7%. In terms of distribution by business group, this is a general breakdown, you can see they have the sales. Fashion & Leather Goods, 20% in Selective Retailing and the balance is distributed between the 3 business groups, not much change from 1 year to the next. Now -- but the more significant aspect is, of course, the growth in individual business groups. I'll just look at the right-hand column, which is organic growth, you can see that all our business groups enjoyed double-digit growth, which is significant. The main one, Fashion & Leather Goods is the group, which enjoyed the highest, the fastest growth, up 20%. And you can see a rebound of Selective Retailing, which -- retailing, which had suffered, of course, the lockdown 2 years run in 2020 and 2021, Sephora in particular went up. So 17% in organic growth. If you look at the other business groups that did more than satisfactorily with growth around 10% or more than 10%. If you look at the profits per se, we'll not return to revenue. So we have gross margin up [ 68.4% ], which is something which we hadn't reached since 2021. Profit from recurring operations, which is a leading indicator. I'll get into the detail of that, was up 23%. So this is in line with revenue, which was up 23%. So it means that margin was stable compared to last year. You may remember that prior to the pandemic, margin stood at about 20% to 22%. So we made a step ahead at more than 26%, and we achieved that in 2021 and again in 2022. Operating -- other operating income and expenses, no comment, but the financial income, well, there's a degradation because of higher interest rates, but also there is the implicit capital gains that were down last year without the -- whereas the previous year, they went up. And so that's a significant gap even though in economic terms, it doesn't make much difference because stock prices went up, these potential capital gains caught up at the beginning of the year. So we have the taxes about EUR 5.3 billion, half of which is paid in France, and it is being said in France that the big luxury companies don't pay any tax as well, there you are. The group share of net profit upwards of EUR 14 billion, up 17% as well. So a few words about profit from recurring operations, which is the main performance indicator, up 23% compared to last year. But each business group did well, Wines & Spirits, Fashion & Leather Goods, Watches & Jewelry and especially Selective Retailing, which consolidated it, the turnaround in this business, not just in terms of revenue, but also in terms of profitability, up 50% in its profit margin. Now we'll turn to the next slide, looking at the operational improvement. Of course, the currency effect less made a difference, but most of the improvement is related to organic growth, which is about EUR 3 billion and then less than EUR 1 billion -- around EUR 1 billion in the currency effect. A few words about our balance sheet total is about EUR 130 billion. Our own equity, which accounts for 42% of the total. The rest doesn't call for many comments. There were no major acquisitions to change the structure of the balance sheet. A few words about debt later on. Cash flow remained strong, EUR 10 billion, not quite the same level as 2021, which had been helped with the catch-up effect after the crisis. So cash flow stabilized the year. There were some assets sold in 2021 and some acquisitions, real estate in 2021. So cash flow, all in all, remained in good territory. And as you can see on this slide, you can see that the debt level is down. It stood at EUR 9.6 billion, now, EUR 9.2 billion. EUR 9.2 billion seems like a lot of money, but compared to equity, as you can see on the blue curve, it's 16% of equity. So the gearing at 16% is historically low. And of course, we're not concerned at all in terms of solvency. Well, dividend, that's an important item because you will have to vote on that later on. We are proposing a dividend of EUR 12 per share. There was an interim dividend of EUR 5. And so the balance will be paid, the EUR 7, if you vote on that next Thursday, up 20%, which is in line with growth in net profit. And finally, I can't resist the pleasure of showing you the performance of the share price compared to the CAC count index, since the beginning of 2021, we've been up 23%, whereas the index was only up 5%, and it would be even more flattering if you looked at the picture since the beginning of the year, since we're up almost [ 3% ]. Thank you for your attention.

Before moving to a brief review of the group's activities in 2022, I'd like to, first of all, say that the results just presented by Jean-Jacques Guiony, the consequence of an outstanding work put in by our teams, our teams of crafts people, our staff in stores, our management teams, our executives and our creators. So before delving deeper into all that, I'd like to thank them warmly and congratulate them. There are a number of them who are in attendance, a number of group employees who are here and who are shareholders for that matter, we have a plan allowing a number of them to own shares. And I'd like to thank them for the extraordinary work put in during the course of 2022 and to stress that it's but a beginning and will continue in 2023, and we're off to a good start because in 2023, the figures for the first quarter are good or even very good might one say and that continues into April. Let's wait for the next steps, but it's off to a very good start. So for 2022, I'm informed that there are slides to show as per usual. There's one clip with the questions that were noted after a survey of shareholders and another from an economist, [ Mr. Bouzou ], on the position of LVMH and the French economy. In 2022, the world underwent major geopolitical, social and environmental upsets. In this context, you noted the group's strong resilience marked by exceptional financial and stock exchange performances in your capacity as shareholders, you are concerned about the consequences of the geopolitical situation and the pandemic, the -- where the strategy and the performance impacted. You believe that 2022 has confirmed the strategic course taken by the group. This year, working with Yayoi Kusama, the appointment of Pharrell Williams as Creative Director for Men at Louis Vuitton. The gearing up of Stephane and co, the development of our activities in Jewelries and Wines & Spirits and the special days for LVMH had caught your attention, you're concerned that the group should show creativity and is showing a quest for excellence and creating value for all. You turn to the future showed great interest in environmental, social and governance challenges, you [ tailed ] the strategic changes of the company and renewed your commitments to progress on environmental issues. And now we move to the second clip on matters pertaining to the economy and LVMH in France and the world in general. Good morning. I'm delighted to be with you at the Shareholders' Meeting. You may recall that last year, at the Shareholders' Meeting in 2022, I presented to the economic footprint of LVMH in France. Let me briefly remind you what the economic footprint a group like LVMH generates direct jobs, but also indirect economic effects, subcontractors, jobs, value-added, everything that's linked to the consumption by LVMH employees, those the knock-on effects, indirect effects have a chain effect on the economy. When we looked at the direct-indirect induced effects, we have the full footprint of a group for LVMH, well, the figures were very spectacular at national level, that footprint was about 145,000 jobs. If we look at payroll taxes, that's about EUR 5 billion. So that was quite colossal. And this year, we've rolled out this exercise at local regional level. It's quite fascinating because we see the LVMH footprint is widely distributed geographically. Why is it important? Because in modern economies, there's a trend to growing conurbations that is the economy tends to create more wealth in the major towns, major cities, LVMH plays a role that runs counter to this natural tendency with economic footprints that are widely distributed across France. Take 2 examples to be very practical. First example is that of the Champagne region, 3 departments, [indiscernible]. The total footprint of LVMH in the Champagne region is EUR 1.8 billion in revenue, EUR 900 million of value added, and that represents over 5,000 jobs, 1.6% of salaried jobs in the private sector. It's the equivalent of the GDP of a town such as Epernay. Let's look at a second region, which is that of the [indiscernible], well, it's a territory in which LVMH is very present in terms of leather goods. And it's a territory in the [indiscernible] that experienced pretty strong de-industrialization, so it's significant to look at what LVMH can bring. If we look at the economic footprint in terms of jobs in the -- it's 3%, the LVMH footprint accounts for over 3% of total jobs in that area. So you see that's quite spectacular. We see that over and above economic matters. There's an aspiration by our citizens to be able to live in communities that are not just metropolitan areas, and that's why we wanted to conduct this study that show there were groups such as LVMH, that contribute to ensuring that the life, the economic and social life can unfold across France. Well, it's very interesting to see how the group is established across the regions of France and contributes to growing the number of jobs and developing French craftsmanship and on that we're extremely motivated and concerned, as Madam, Chantal Gaemperle will explain to us, as Global Head of Human Resources will explain about our institute of trades of excellence, training craftspeople for the future of our businesses, for our companies and who after training can move to other companies. So since the figures have already been extensively discussed, I think what's interesting to see in reviewing all our brands, at least for the most significant is really the engine, the -- as I believe I said last year is our collective ability to create desirability, desirability through innovative products that have outstanding quality and particularly resistant, technically adapted and fully suited to everything that is driven by the global constraint of protecting the environment, et cetera. And in the second presentation, Antoine, will tell you about all the efforts we're undertaking in terms of manufacturing on these matters, which for all of us, for our employees, for our shareholders, for the environment are of the utmost importance. Turning now to the various business areas. Let's start with the most important, which is Fashion & Leisure -- Leather Goods and the most important of our houses of our Maisons Louis Vuitton. First of all, given that there has been a change in the management, I'd like to thank and congratulate Michael Burke, who's with us here today. Michael has done an extraordinary job for 10 years. He has allowed this iconic house. We never give the figures for each brand, but for once. It's the exception that confirms the roar. It is he who has carried this exceptional above the EUR 20 billion mark, which is a first in the history of the luxury sector. Louis Vuitton is now head by Pietro Beccari, who's also with us and who has brilliantly for 5 years developed the Maison Christian Dior, which today is taken up by Delphine and [indiscernible], who also with us and have a major task ahead of them, which is to continue the wonderful expansion of the first 5 years initiated by Pietro and the design team for at least the next 5 years. So at Louis Vuitton, great many things happened in 2022 briefly. We opened several workshops, including that of Vendome that I urge you to all go and visit. It's extraordinary. It's an 18th century building, quite magnificent, that had been totally rehabilitated. And we have generated, created between 300 and 400 jobs locally, and all these buildings are designed with an eye to environmental standards, and we see that when we visit to promote energy efficiency fully. And it's at Vendome that we produce some of the most outstanding products of Louis Vuitton, all this done manually and it's extremely impressive in 2022 with Louis Vuitton. And the creative side and with the cooperation of Nicolas Ghesquiere, who's also been in the house for almost 10 years now and who collaborated with Kusama, the Japanese artist, who's quite iconic with whom Vuitton had, in fact, worked already 15 years ago and whose output in terms of the products are quite outstanding. You may have seen the facade on the [indiscernible] or that is at the [indiscernible] bridge on the Vuitton with the small [indiscernible] that we find on all that. I'm not wearing the Kusama sneakers, but I was talked to wear a tie, but normally, we all wear these T-shirts with these little buttons on and trainers. It changes every 6 months, but that's what we do. And it's quite successful because some of these products are out of stock. At Vuitton, we also organized great many fashion shows. This one next week that Pietro and Nicolas Ghesquiere will be going to that in Seoul, and that would be pretty iconic on a bridge that I visited a fortnight ago, where there's a Korean director I saw who's going to do a great presentation. Unfortunately, I won't be able to attend because next week, I'll be at the opening of the Tiffany store in New York that also set to be quite an outstanding event. Let's also mention another very important development at Louis Vuitton, Pharrell Williams as Head of Design for the Men's Collection. We've known Pharrell for a long time. He's worked previously with Louis Vuitton. This week, we had the first outline of the collection to be presented in June. It looks extremely interesting. I'd also like to mention that occurred last week, the opening of the Vienna store. That's absolutely amazing. If you go to Vienna, it's a great city, don't miss the Louis Vuitton store in Vienna and in passing, mentioning Louis Vuitton a big success this year and last year of the Louis Vuitton front, with the money mid-show show record number of visitors. I'm sure some of you were able to tour that exhibition, the quality of the works to parallel and show in perspective, the money paintings quite outstanding. There was a triptych money had not managed to sell at the beginning of the last century that was sold in 3 sections to 3 different U.S. museum. So first time that the 3 paintings were brought together. It's about 14 meters long, quite exceptional with the mid-show works and counterpoint, it was quite magnificent. And now it's [indiscernible], great success for the Louis Vuitton front. That's for Vuitton. Turning to Dior, that continues to go from strength to strength. Let's mention an exhibition that we saw together a fortnight ago at Tokyo, Christian Dior: Designer of Dreams, wonderful, it's the finest show that I've ever seen and it's very successful. It's sold out through to the end of the show. And it's an exhibition that will then travel with an outstanding director. And then we have the incredible concept store of Dior in Seoul. And of course, last year, it seems a long time ago, it was a year ago, the opening of 30th on Avenue Montaigne, [indiscernible] Montaigne up until the opening of Tiffany, and it's probably the finest luxury store, another week and then have to continue on that same upward trend. Dior has totally surrounded, wrapped up. The -- with gingerbread during the vacation, there was a little Dior cafe, it was wonderful. And then the show at the foot of the pyramids at Seville, at Seoul, and the latest Mumbai in India quite magnificent. So that's for the 2 most iconic fashion houses. The others are also faring well, expanding well. Celine, that as I announced here as we topped the EUR 2 billion revenue during the year 2022, and it's close to the EUR 3 billion mark, and that's a consequence. I mean, these figures are at a consequence of the appeal of our products. What is I find very encouraging is that Celine today in the fashion houses is ranked fifth in terms of desirability, the first 4 being Vuitton, Dior, and then there are 2 competitors that I won't mention. I don't want to advertise the competition. You can imagine what those brands are. And then in fifth place, Celine, that's quite extraordinary. Another brand that is also growing strongly, smaller, Loewe with Jonathan Anderson, who is also a designer full of potential and a brand that's extremely successful, that's not really on the same operating model, but which produces cloths of surprising quality and is becoming increasingly desirable. [indiscernible] the figures are up, I won't review all the houses because it would take us all morning. But let's now move to beauty. Well, there again, a major change in beauty management. And I'd like also to thank first of all, Claude Martinez, who managed beauty for LVMH for great many years and who now -- and I'd like to thank him because the success of Dior, I mean he is -- is down to him. He's delivered that success in very large parts, and he will now move to our activity of research and development of new products, new research centers. We had a few difficulties with the research center that we were going to set up next to the Ecole Polytechnique. I won't go into the details of all that. It would take too long. But French what they are, they came, said it wasn't a good thing to have a capitalist company setting up shop there where we wanted to invest EUR 100 million, hire 100 scientists, no, no, they said it's best for the state to do that. It's an empty field with a few frogs sleeping in about here and there. And we'll see in 20 years' time, if they've done something with it. We decided to cut our losses, and we're moving elsewhere where we're well received. And in fact, we were invited to go to other countries in the U.K., prestigious universities not only to welcome us and subsidize us. We're good French, we're going to stay in France, in spite of all the criticism level here and there, we remain attached to France, just to say that in passing. So, Claude Martinez will be supervising all that. And our beauty activities are headed up by Stephane Rinderknech to whom I wish very best wishes for success for these iconic brands that he is now supervising and whose success in a number of countries is quite remarkable. The place in Japan, where we went recently, LVMH and Dior, in particular, is the leading brand of beauty products, perfumes, cosmetics care products sold in Japan ahead of a group that we know, L'Oreal, but is way behind with its products. I don't want to be on kind. It's a fine company even if it's a smaller, it's a fine company. But be that as it may, it's pretty good, and we're expanding. We're developing hugely the appeal and desirability that makes the Dior brand that's among the -- for many countries ranked top in France, Japan and the U.K., perfumes and products, we have an extraordinary perfume. Sauvage is the world's leading fragrance. It was launched barely 4 or 5 years ago and is growing strongly. I could, of course, talk about that activity for a very long time. I'd like to welcome the arrival of Veronique Courtois, the Head of the Dior brand. Veronique has been with us for quite some time. She was previously the CEO of Guerlain, knows Dior very well because she's worked at Dior perfume for many years and is now in charge of the brand globally. Wines & Spirit, another iconic business that is doing well with -- it was very successful, notably with Champagne, certain parts of the world when we go to a restaurant, the owners come and see me. So we'd like some bottles of Dom Perignon because we don't have enough shows, but the quantity being limited. We can't invent more, but it shows the success of French Champagne brands, and we've extended our scope to Phelps, a U.S. vineyard in California. And this dates back a few years now and was strengthened recently, where the leading producer of Rose of Provence, and Rose of Provence is the one that is growing strongly notably in the United States with the Chateau d'Esclans that produces this amazing Rose Whispering Angel, which is #1 on the American market and the acquisition of Minuty that we've just finalized, that's also an absolutely iconic brand. Moving to watchmaking, that continues to show great vitality headed by Stephane Bianchi in a masterful manner. And the watchmaking business since we've combined watchmaking under his leadership, it's a significant activity for the group, that's very profitable and is innovating in many areas of watchmaking and jewelry. I mentioned the Tiffany store that's iconic, but also Bulgari stores that were opened and that are absolutely remarkable. And these watchmaking products are, for the most part, manufactured in our workshops. We have watchmaking workshops that are very impressive, both at TAG Heuer, Zenith, Bulgari and Vuitton for that matter, because at Vuitton, Jean heads up the Watches Division, and we're very successful with extraordinary watches, which are really sold in small quantities, very expensively priced. I won't say the price, but certain series only 10 items, very complex repetition. We won't go into all that in detail, but it's hugely impressive. I believe the workshop, [ La Fabrique du Temps ] in Geneva for Vuitton watches is very impressive and can be visited. We can organize visits if some of you are interested to that workshop, that I visited it quite recently. It's truly remarkable. It's well worth a visit, very impressive indeed. At Hublot, this cooperation with Murakami that worked very well, that delivered some significant watches and great potential, both in watches and jewelry. This brings me to Selective Retailing with Sephora in particular, Lapuente, who heads up this business in a masterly fashion, and Sephora currently since last year well before is very successful, posting excellent growth, gaining market share, growing strongly on the U.S. market. And we also have linked to that exclusive brands is that the launch of Sephora Fenty, that's the brand that we launched with Rihanna, who was in our offices yesterday and attended the Board meeting. She is remarkable, in addition to her outstanding talent in music, she looks at everything in detail and her brand is growing strong with sales were up 50% on the U.S. market, making it one of the most leading makeup brands in the United States and also in France. If you go to the Sephora store and the [indiscernible], you see the Fendi store, there's always a crowd around it. It's very impressive. So there are, of course, great many more things to say, but I was asked to be brief, very good. I would like to stress as Mr. Bouzou did in passing the outstanding economic footprint of the -- of LVMH. Of course, since business is doing well, since the results are good and the share price, and I hope our shareholders are pretty, I'm sure they are, for that matter, is rising quite significantly. It's not guaranteed that always remain at an all-time high, but for the moment, it's faring very well in France. Of course, we're criticized. What, how is it possible, what's happening, it's not normal, that's something and then as Guiony would say, well not paying any taxes, it's the opposite, we're paying the most taxes in France. And then I would tell are they hiring people? Yes. Yes. 15,000 people hired in 2022. And in France, we have 40,000 employees, all those in the companies working for the group were 160,000. I was hearing a politician, I don't want to engage in politics here, but people are pretty inconsequential, saying, well, it's a shame for France, all these groups, luxury produces pointless products so we should scrap the business. Okay. But does that gentleman know how many employees we're talking about in France, 1 million people. Here, we have a so-called responsible politician who blatantly says, scrap a business that employs million people. So we're opening sites. I've mentioned many in France, we're investing over EUR 1 billion every year. Corporate income tax, we pay EUR 5 billion in taxes worldwide, half in France, where 90% of products made by the group are exported outside France. That's what I can say briefly on that, but Mr. Bouzou explained that very clearly. Now these successes are truly remarkable. I'd just like to end my presentation. What does it rest on the group's values? I would like to recall them. Firstly, creativity, innovation, the fact that we were capable of attracting and retaining and working with the most influential, the most gifted and outstanding designers of our time. It's not always easy. It's not always easy to get a polytechnician to work with a creator, with a designer because sometimes there's a clash of cultures. I won't give you an example here, but that's how we can judge the ability of the engineering question to adapt to the company long-term because if the clash is too strong, it's happened, well, there are some who don't resist the shock and who after 6 months say, well, sorry, sir, we can no longer work, who doesn't turn up to the meeting or the tomorrow morning and often maybe whereas we had organized a meeting together, it doesn't always work. But when it does work this mix between this outstanding creativity and a certain logical mindset because engineers normally have a pretty logical mindset, it can work together. Second value is the quest for excellence in everything we accomplish and it will be in the stores in the way we present our products, produce them to ensure that our customers are impressed. I mentioned watches earlier. It goes for leather goods. It goes for our care products, perfumes. It applies to jewelry. The high-end jewelry at Tiffany that customers are impressed by the quality of the products. And that goes also for wines that are always outstanding. The third value is I've mentioned on several is our spirit of enterprise. LVMH isn't a normal company. It's not kind of a joint stock company, it's somehow it's a family-owned company in which I want to make sure that all participants are not considered like employees, but those who execute, but as family members that they're attached to the group as we are indeed attached to them. And they're pleased to what they do. They bring their skills, their qualities to the group, but they feel they are in an environment that looks after them, and Chantal is going to explain to you how we seek to share this family spirit with all our employees. So that they feel motivated, at the same time, we nurture the spirit of enterprise, entrepreneurship, agility, responsiveness. We're not too formed of bureaucracy. Well, there isn't very much, a little, but not too much, because when we have to look after legal deal with legal issues or accounting, there's necessarily as mention of bureaucracy, but we try and contain that to channel them towards efficiency. We have a CFO, who's extremely agile and manages to get all that to operate without too many or having to fill out too many forms, reports or briefs to read in detail. And lastly and finally, the most important, the group's engagement, the fact that the group has a positive impact, obviously, a positive impact and Antoine will return to all the major issues of our time, the environment, the protection of the ecosystem is a sense of responsibility in respective communities where we're present, social responsibility, we're building and hiring for our workshops. We have various foundations. We have the life foundation that Chantal will tell you about that brings our contribution, so as to allow the people who have fallen on hard times to return to employment. I saw that in Hubei recently, the fact that we have been able to attract people who were totally marginalized, and [ 80% ] of them find a job. It's not our activity, but we contribute to it. We help to build it, but that it's crucially important for the motivation of our teams to know the group isn't just creating products, delivering results that are quite exceptional, but also to look after one's environment and one's social environment. That's what I briefly wish to say. Over now to Chantal Gaemperle, who'll tell you in greater detail about all these matters of social responsibility, training, recruitment before Antoine tells you about our activity to preserve the environment, how we can address this major challenge today, which is to combat global warming. Thank you.

There are 3 trends in the global economy, fragmentation, climate change and a new trend, which is technological change. Fragmentation first is due to the rivalry between China and the United States from an economics standpoint, but also in terms of trade, technology, and there's a monetary rivalry. There's also the war in the Ukraine, which brought about a significant geopolitical change and a new balance towards China. The war in the Ukraine also brought about inflation. The second trend is the climate transition and the loss of biological diversity. Many countries on -- now have set for themselves carbon-neutral targets, and this means this will require innovation. The third trend is to do with new technologies, in particular, artificial intelligence. This enables us to be almost knowledgeable about everything to be faster, but this also means that education and training and continuous training, creativity become -- are becoming more and more important. So education is key to the future. Now in the context of deep changes around the world, there are 3 major challenges for companies -- for large companies. First, related to geopolitical fragmentation, the fact that value change and supply change will be more and more fragmented and will reflect geopolitical, environmental and social challenges rather than economic criteria. And so major companies will have to adjust to remain resilient in this new environment. The second challenge is to do with climate change and the loss of biodiversity there, major companies will have to set an example and be transparent in terms of energy consumption and CO2 emissions, will have to change the modes of production, but will also have to allow for better consumption and carbon and low carbon modes. And finally, the third challenge is to do with technological change and there companies will have to support their employees and help them take a new look to their own work, their own tasks, looking for meaning big companies will have to be involved in continuous training of adults, developing creativity, and that will be major challenges for the labor force and people involved in the creative processes in years to come because of technological change.

Good morning, everyone. 2022 was a record year in financial terms, but it was also a record year in terms of human resources. The group now claims 196,000 employees, and we've recruited 61,000 talents around the world, up 35% compared to 2021. We were well aware of the situation of the younger generation that bore the brunt of the pandemic. And so we recruited 25,000 people under the age of 30. In fact, we were able to hire as many as 39,000 young people, including 9,500 interns and apprentices. So that's a record recruitment in a constantly changing world where the role of training, continuous training, life on training is key. And we have been making major investments in there, supporting our employees with development and innovation program. The DARE initiative, which calls on our employees to generate new ideas. And that brought as many as [ 2,700 ] projects in 5 years, 50 of which are incubating and 20 have now become operational. And the fact that you can have a career and new development opportunities has been attracting talents, and this is a major asset for the company. Last year, we had a record 6,500 promotions, internal promotion, up 17% compared to 2021. The trades and know-how are the heart of our success, and to advertise this to create new interest, we went to 5 cities in France with basketball star, Tony Parker, with 1,200 jobs on offer, we are completing the second edition of this store, which is becoming more and more successful. As Mr. Arnault pointed out, we also have the Institute of Trades of Excellence, and that has continued its growth, broke its own record last year with 450 new apprentices compared to 350 in 2021 in 7 countries. And so the total number of apprentices is 2,000 trained to 30 trades through 42 programs since the inception of this institute in 2014. These achievements are based on convictions and values that define our vision and our human resource policies, long-term vision, meritocracy, commitment, diversity and inclusion. And in this respect, we've made headway on women leaders because we have 45% of women in key positions, 18 heading our houses and we've made a commitment to wage equality by 2025. We've had as many as 130 actions and initiatives for gender equity and inclusion within the group and its houses and we formalized this commitment when we signed the LGBT+ and the L'Autre Cercle Charter. And so I was telling you about the long-term vision, commitments for social responsibility are proof to this. We are strengthening our action year after year and there are major results to show for this. I'll give you the example of LIVE, the institute of vocations for employment. Now LIVE offers innovative training methods customized to help people who had no training whatsoever and were left out of the labor markets. Since 2019, we started as many as 4 campuses in France; 1 in Clichy suburb in Valence, Rouen last month in Marseille. By the end of 2023, we'll have 1,100 people who we're able to help and support and we're proud of the results because more than 80% of these people were able to find jobs. Regarding health and safety for our employees, the Executive Committee of the group and the heads of divisions signed the Health & Safety Charter providing a sound working environment for our employees. That commitment made it possible to improve our health indicators and significantly reduce the number of accidents on the job. And we also have good results with the LVMH Heart Fund. This was created in 2021 to help people facing adversity and last year that enabled us to help as many as 4,000 employees in 50 countries. They had some form of financial assistance or social and psychological support. Ladies and gentlemen, dear shareholders, in a highly competitive labor market looking for skilled talent, we have to look after our human capital. It is our men and women who make all the difference. This has been our conviction at LVMH and once again they showed this last year. Thank you for your attention.

Thank you, Chantal. And now we'll show a clip and then I'll give the floor to Antoine Arnault. [Presentation]

Good morning, everyone. These are moving recollections of these Special Days. We had as many as 2,000 visitors last weekend. We started a new operation called LIFE 360. These are ambitious, pragmatic and significant projects on biodiversity, climate, the circular economy and biodiversity. I'm proud to show the achievements of which we can all be proud. The environment is a business for us all. Almost all houses have a dedicated action plan contributing to LIFE 360 with clear commitments for the years 2023, 2026 and 2030. All operational functions are involved. The procurement division looking at the environmental footprint of raw materials, logistics looking for a low carbon production -- shipping of products, the IT department for responsible digital environment, creation office using recycled fibers or leather tailings for desirable and lasting products. Our 196,000 employees around the world have actions for environment cleanliness and trained in new techniques such as ecodesign and this has given visible results. We can see this on our main brands. Biodiversity, we are limiting the impacts of nature. In Turkey with Stella McCartney, Fendi and Louis Vuitton; we are supporting our cotton supplier using regenerating agriculture and achievements in 2 years; less water consumed, less inputs and better improvement in soils in Chad. We are fighting desertification, helping 500 farmers deploy sustainable methods for cotton as part of Circular Bioeconomy Alliance created in 2020 by his Highness Charles III when he was Prince of Wales. In Australia, we are helping our suppliers for Merino wool having breeding that can regenerate pasturing land. Louis Vuitton has a partnership with People Wildlife to contribute to the preservation of natural habitat for 400,000 hectares. In France in Grasse, Christian Dior cultivates roses with special species for the quality of soils. In Champagne, Moet Hennessy pursues its programs with Living Soils with protection of the top soil in its vineyards. In Ecuador and Amazon, we contribute to the restoration of the forest cover developing local economy with natural medicine. In Amazon in Brazil, working with UNESCO, we have reforestation programs. Our teams are just back and I must say that the testimony from these people show that this is very useful indeed for biodiversity. We act for the climate. Forest and soils are carbon things. There are other ways to become involved in the climate effort since 2022. In September, we mobilized for carbon neutrality or low carbon energy with reducing the consumption of electricity in our shops, our workshops and our sites. Immediate effects say for instance in France, cut its energy consumption by 19% in its shops and offices between October and December 2022. Of course managing shops in malls is more complicated and so we have an unprecedented partnership with the owner of a shopping mall in China, Hang Lung Properties, with actions for low energy consumption. On the carbon footprint, we're working with one of the major players of SAF, Sustainable Aviation Fuel. This is a biofuel that reduces by 83% CO2 emissions compared to standard kerosene aviation fuel. Biodiversity has reduced its environmental footprint to make products more desirable. Christian Dior Couture has started a men's collection with ONG Parley For The Oceans. The whole collection is developed using textile with high performance and recycling marine debris. Guerlain reinvented its emblematic collection Aqua Allegoria by reducing its carbon footprint by 80% -- 60% with a new recharge module. And the second skin of Ruinart is Veuve Clicquot with low carbon packaging made with recycled paper and hemp. Nona Source, a platform to resell unused textiles, confirmed its status in circular economy, 190,000 meters of fabric were upcycled. In 2022 we preserved or rehabilitated 1.37 million of hectares for wildlife and flora. The growth of the group goes hand-in-hand with a lower carbon footprint compared to 2019, 11% down in carbon emissions in Scope 1 and 2, 15% in Scope 3. The certification rate of our main supply chains by high standards are guaranteeing ethical standards and significant gains in 2022. Sustainable development and continuous program remains to be achieved, but we have a AAA grade water biodiversity climate and we are comforted in this strategy. I'm delighted to show you the progresses achieved so far. Thank you for your attention.

Thank you. And now I'll give the floor to the auditors.

Thank you, Chairman, ladies and gentlemen, shareholders. Good morning on behalf of the auditors, Mazhar, I'm prepared to present the results. The reports that we've drawn up for your attention in respect of FY 2022 were made available to you ahead of the shareholders meeting. I therefore propose to summarize the key points. Our reports are 7 in number; a report on the annual financial statements, 1 on the consolidated financial statements, 1 on the related party agreements, lastly 4 reports regarding transactions on the share capital. I'll begin with the report on the financial statements. That's the first resolution. They are prepared under French GAAP and we consider that the valuation of equity investments and provisions for contingencies and losses were the key audit matters. In conclusion, we certified these financial statements without any reservation or observation. Turning now to the consolidated financial statements drawn up under IFRS. We consider that the 3 following matters were the key audit matters: the valuation of fixed assets, the valuation of inventories and work in progress and provision for contingencies and losses and uncertain tax positions. In our opinion, the consolidated financial statements give a true and fair statement of the company and prompted no observation. Turning now to the fourth resolution of your shareholders' meeting. We issued a report on regulated party agreement. No new related party agreement was brought to our attention during the past year. The agreements authorized in prior years and which remained in force in 2022 are also presented in our special report. Lastly, in respect to the extraordinary part of your shareholders' meeting, we've issued 4 reports concerning reports that might in the future have an impact on your share capital. These are authorization to decrease the share capital, to increase the share capital, to grant stock subscription or stock options to employees and/or corporate officers and an authorization to increase the share capital for the benefit of employees who are members of a corporate savings plan. Reports concern no comments on these transactions, which comply with the conditions provided by the French Commercial Code. Ladies and gentlemen, Chairman; thank you for your attention.

Well, ladies and gentlemen, before we move to questions, I realize that I've omitted 2 points. The first being the most important is to thank Sidney Toledano, who has been with me for over 20 years now. Correct? Well, almost 30 years. I didn't want to accentuate your gray hair, but be that as it may, I like to stress the exceptional outstanding work. He's not going to leave. He's not leaving. He will be taking up other duties. He's done remarkable work when he headed up Christian Dior because he led Christian Dior for a very long period of time. And as he is in charge of the Fashion Group to which a whole set of brands belong to, those that I cited including Celine. And we'll continue to work together in a different setting. I won't say any more. We'll come to that next year. But a very big thank you to you, Sidney, for all the work over these past few years. Also another point that I wish to mention in the slightly smaller brand, there's one that's shining currently, Berluti. Amazing shoes, especially products for men to go and visit the Berluti stores and to try on a pair of shoes, you'll see they are really amazing. I remember the first time when we acquired this company that's going back quite a while, I went to visit it and back then there was the founder, Olga Berluti, who was in the store and I said well, really like to try on a pair of your shoes. Very good, sit down and please remove your shoes. She looks at my foot and off she goes without asking, without measuring anything; just by looking at my foot, she came back with precisely the right shoe. I thought that was extraordinary so I bought the business. Of course she was selling naturally and since these are amongst the finest shoes in the world. Let's now move to questions. Firstly, to Tony because there are a few written questions that he's going to answer before taking questions from the room. Because there is a buffet being served, isn't there? There's no buffet lunch. Savings everywhere. That's the CFO for you. That's the financier. I won't ask you if there's a gift, you'll probably say oh, there is a gift, rest assured. Tony?

Good morning to you all. I now like to answer a few questions that represent the topics that were brought to our attention written in writing. First question concerns our sales policy. What's your development strategy as regards omnichannel sales and marketing for the various houses? The digital world is hence forth part of our lives added to the physical world and the 2 dimensions, the contact between our houses and customers reflects that reality. Social network; place of information, networking and sharing shows in stores a unique experience opportunity. The [indiscernible] of the Maison already cited is both a boutique, Maison, restaurant, hotel; a magical place. The integration of the 2 dimensions offers a richer opportunity for expression. The development of new digital technology, data enhancement and AI will allow us to personalize the offering and make transactions more seamless. The stores will rival in creativity to offer more emotion experience to be shared on social media and to nurture the desirability of our brands. the new flagship of Tiffany to be opened next week will be the finest example of that. Second question concerns the value created by the group. What's the value that the group has created and what steps do you plan to take to better share the value to the benefit of employees? The added value is what corresponds to the value that the company creates. It's not the wealth of a company, it's not its profit. It's a bit more complex because it's the difference between sales and intermediary consumptions. What we need to produce such as for example the raw materials, but the added value is also the contribution of the group to the global gross national product. In other words, it's our ability to transform a piece of leather into a lasting and iconic product. 2, take the 2022 figures, group revenue totaled EUR 79 billion. The added value of the group in 2022 reached EUR 38 billion, but this is just a starting point because of those EUR 38 billion, we haven't yet paid our employees nor paid our taxes nor invested. So let's agree on the -- let's look at the distribution in detail. EUR 9.6 billion, that's about 1/4 of the EUR 38 billion, are reinvested in our value chains, businesses and communities. It's what allows us for example to open new manufacturers in France and Italy as we did in 2022 with Louis Vuitton at Vendome or with Fendi close to Florence. This can of course serve for future investments to strengthen still further our capacity to manufacture or preserve savoir-faire or know-hows that have unique value when it concerns the manufacture and preservation of our products. Secondly, over EUR 11.2 billion, almost 30% of this value-added is returned directly to employees in the form of salary, also bonus as well as profit sharing in France notably. Third component EUR 9.4 billion, still about 1/4 of this value-added goes back to the state in the form of various taxes. We're the #1 tax contributor in France paying the highest corporation tax. And then the remainder, about 20% is returned to shareholders essentially in the form of dividends. And there's a group reserve here because we've always sought to maintain the growth of the dividend. That's the reality of our contribution of the group that shows the broad balance in the distribution of value-added between employees, the state, the company and shareholders. This testifies to our commitment in respect of employees, who I'd like to hail the incredible work and devotion and to the company as a whole in particular in France whilst of course supporting long-term growth, which is our prime concern and the necessary precondition to continue with all our engagements. The third question lastly was received from People for Ethical Treatment of Animals. Are we going to abandon the use of fur and exotic skins? It's a recurring question on their part. Our position has not changed since the last time we received a question from PETA on that and put at last year's shareholders meeting. We're convinced that natural raw materials constitute a pressure good and that are outstanding -- contribute to outstanding and lasting products of our Maison. We're in favor of freedom of choice. Some of our customers continue to desire and buy these types of products. Our houses can therefore select the materials that they use in their design process, but they must do so whilst scrupulously comply with the code of practice we have governing animal raw materials and we worked with a scientific committee comprised of independent experts. This charter sets out the various standards and long-term commitments in 3 areas: traceability, animal well-being and the respect for local populations, environment and biodiversity. Back in 2019, we set a traceability target of 100% by 2025 for these raw materials. Furthermore, we continue to study all alternative solutions, notably that of plant-based leather. We're working in this minor microworks with a set of startups that won the Innovation Award for LVMH in 2020 for its cactus-based leather. Stella McCartney at the cutting edge of this development and other houses are working with scientific institutions to find virtuous solutions based on alternative materials. Thank you.

Ladies and gentlemen, we're now available to take your questions if there are any. The vote on the resolutions is quite important. We'll try and take questions for about 10, 15 minutes. Let's start with question 5 over there. I'd ask you to introduce yourself before you ask your question, please.

I work for API. This is the association for individual shareholders. First of all, congratulations on this outstanding performance. Shareholders can always decide on which share to purchase, but the LVMH share has a desirability criterion. I have 3 quick questions. Number one, what are you expecting in terms of financial returns? What are you expecting of the new contract with Tony Estanguet, who chairs the Organization Committee of the Olympics for 2024 in Paris. [indiscernible], the cloud company has now a new agreement with you. Is that to mean that you're going to focus on large complications on small numbers of watches? And then returning to basketball, you said last year that selling virtual basketball shoes was not a move of development, but last year you've decided to get engaged in NFTs, non-fungible tokens. Is that a way of fighting counterfeits because NFTs do produce certificates of authenticity or is this because of this excitement that it is impossible not to become engaged in NFTs?

For the first question regarding the Olympics in Paris. Well, the contract you have mentioned has not been signed yet. It's still being negotiated and as in any talks, well, you may or may not end up signing the contract and so watch this space. Regarding [indiscernible], that is indeed an iconic brand and just like we purchased [ Bvlgari ], this brand was transferred to Louis Vuitton in the Fabrique du Temps. I won't say much about this. But one interesting factor, we haven't presented a product yet and already for the first model, which is to be built in 100 copies altogether, it's all sold out already. So customers are so keen, so interested in the know-how of Fabrique du Temps, which is now recognized worldwide as one of the very best workshops making watches in the world. And the brand -- I mean the creator, I mean we can mention remarkable competitors, but he created Piguet, he created Patek Nautilus. So he is the greatest creator of timepieces ever. And we were fortunate when we bought his brand, we bought with it the entire history, all the archives and so we have remarkable heritage there and we are very confident on the future development of that. Regarding basketball shoes, we do not sell virtual basketball shoes. What we use when we have NFTs, we sell an actual shoe with its NFT just like with bottles of wine. You can purchase a bottle with an NFT, but the bottle of Cognac or whatever it is the house will keep for you in its cellars and when you decide to sell it back or indeed to consume it, you turn this virtual NFT, into the actual bottle which you own. That's how it works. So there's an actual product being sold. There's another question on #1.

I would like to congratulate you on this outstanding performance, but I would like to thank you not to present your results the same day as L'Oreal because 99% of LVMH shareholders are also L'Oreal shareholders. That's good news. Well, we cannot be everywhere at the same time so just as well you didn't have the announcement on the same day. I see that -- I read in [ Lesico ] that the big challenges are China and India. What is your take on India? There are poor people in India, but lots of millionaires as well.

Well, India has overtaken China in terms of number of inhabitants, but not in terms of GDP. India is by and large a poor country unlike China, which has enjoyed significant economic growth over the past 30 years. So there's no way the Indians can acquire LVMH products. Unlike China, we did have a fashion show in India because India is still iconic in terms of receptions and such like, but India is not a country where we can have a network of luxury shops. Other questions? There's another question, yes.

First of all, my name is [ Jean Le Celib ], I'm an individual shareholder. I would like to commend you and congratulate you not just on your great performance, but this morning's presentation. I have a technical question. If you look at the price share of LVMH, which is about EUR 900 per share and it's still going up whereas the market is going down especially for long-standing shareholders comparing the purchase price with the current price. But as [ Rene Tulane ] said, this is becoming a desirable share which in financial terms makes it a bit heavy. Are you considering a splitting of the share to make this share more affordable.

I will disappoint you, but we believe that desirability is proportional to the value so we don't propose to split it. The share itself has become a luxury good. Well, ladies and gentlemen, the time is up. We decide to vote on the resolutions. And so resolution #1, the approval of the parent company financial statements for fiscal year ended December 31, 2022. Please vote. Approved. Second resolution, approval of the consolidated financial statements. Please vote. Approved. Third resolution, allocation of net profit. Please vote. Determination of dividend. Approved. Fourth resolution, approval of related party agreements. Please vote. Approved. Fifth resolution, renewal of the term of office as Director of Delphine Arnault. Please vote. Approved. Well done, Delphine. Sixth resolution, renewal of Antonio Belloni's term of office, here present. Please vote. Hope you're voting for him. Approved. Well done, Tony. Seventh resolution, renewal of Marie-Josee Kravis term of office as Director. Please vote. Approved. Well done, Marie-Josee. Eighth resolution, renewal of Marie-Laure Sauty de Chalon's term. Please vote. Approved. Well done, Marie-Laure. Ninth resolution, renewal of Natacha Valla's term of office as Director. Please vote. Approved. Congratulations, Natacha. Before launching the vote for the appointment of Laurent Mignon, we have a presentation clip to show you.

My professional background is I've always been in finance until recently, I headed the BPCE Management Board. I'm Head of the Wendel Management Board. An investment company prior to that, I was CEO of Natixis, partner of Oddo Private Bank, AFG an insurance company and I started out my career at the Indosuez Bank a few years ago. LVMH is an iconic company, iconic because it represents all the French know-how, savoir-faire, ability to showcase many trades and expertise of France throughout the world and one of the leading global companies. This dual capability is very important and the company behind this success employees, great many employees throughout the world, in France in particular, and contributes to many different trades. Very few reasons why I've agreed to join LVMH. There could be many more. The company is so rich in its qualities. I'll of course try and bring to the Board. Firstly, my knowledge of the financial world and the financial mechanisms and the ability perhaps to decipher the macroeconomic environment, how it's changing and we know how complex things are today. The fact that I worked as a banker for many years allowed me to have a good understanding of that. And perhaps my knowledge of large companies, I headed up BPCE over 100,000 people and all its complexity. So I'll seek to make available the experience acquired during my career to bring that to the Board of LVMH.

For the appointment of Laurent Mignon. Please vote now. Approved. Congratulations. We're delighted to welcome you to the Board. 11th resolution, renewal of Lord Powell's term of office as Advisory Board member. Approved. Well done, Charles. 12th resolution, appointment of Diego Della Valle as Member of the Advisory Board. Please vote. Approved. Congratulations, Diego. 13th resolution, approval of the information on the compensation of executive officers. Please vote. Approved. 14th resolution, approval of the items of compensation paid to the Chairman and CEO, that is me. Please vote. Approved. 15th resolution, approval of the items of compensation in 2022 to the Group Managing Director. Please vote. Approved. 16th resolution, approval of the compensation policy applicable to directors. Please vote. Approved. 17th, approval of compensation policy in respect to the Chairman and CEO. Please vote. Approved. 18th resolution, likewise for the Group Managing Director. Please vote. Approved. 19th resolution, authorization and powers to be granted to the Board to trade in the company shares. Please vote. Approved. 20th resolution, authorization and powers to the Board to reduce share capital by canceling shares acquired under the 19th. Please vote. Approved. 21st resolution, delegation to the Board to increase the share of capital through the capitalization of profits, reserve, additional paid-in capital. Please vote. Approved. 22nd resolution, delegation to the Board with maintenance of preferential subscription rights to issue ordinary shares, other securities. Please vote. Approved. 23rd, delegation to the Board with deletion of preferential subscription right to public offering of ordinary shares and other securities. Please vote. Approved. 24th, delegation to the Board to issue ordinary shares and/or securities with removal of preferential subscription rights. Please vote. Approved. 25th, delegation to the Board to raise the number of securities to be issued in connection with share issues with or without preferential subscription rights. Please vote. Approved. 26th resolution, delegation to the Board to issue shares giving access to other equity securities or confer rights to the allocation of debt securities in consideration for securities tendered to any public offer initiated by the company. Please vote. Approved. 27th resolution, delegation to the Board to issue up to maximum 10% of share capital giving access to other capital equity securities of the company. Please vote. Approved. Resolution 28, authorization granted to the Board to award share subscription options without preferential subscription rights and share purchase options to employees and senior executive officers. Please vote. Approved. 29th penultimate resolution, delegation granted to the Board to issue shares giving access to the company's share capital without preferential subscription rights. Please vote. Approved. Final resolution, determination overall limit for capital increases. Please vote. Approved. Ladies and gentlemen, thank you very much and see you next year.