Well, ladies and gentlemen, good morning. We'd like to wish you a warm welcome to this Annual General Meeting. I'd like to declare the meeting open and suggest that we appoint as teller Mr. Nicolas Balzier and Mr. Florent Olivier in attendance representing the greatest number of votes and to appoint as secretary Mr.
Bernard Kuhn, Group Legal Director. The quorum has been reached because the attendance sheet has been drawn up, and we will give you later on the precise number of shares represented at this meeting all the legal documents required for the holding of this meeting made available to all shareholders. And I would also inform you that an officer of the court is in attendance to ensure the smooth functioning of our meeting. We can now begin the order of the day, which is to review and approve the results in 2016 before handing over to Guilloty, who will review the figures in details, let me just say that 2016 has been an excellent year with remarkable results, a record year in terms of revenue, profit from recurring operations and free cash flow. So the group is indeed well positioned at the end of 2016 to address a year of 2017, perhaps slightly different from 2016, but more about that in due course.
You have the figures shown here. And I'll now turn to Jean Jacques Guillenie for a detailed review of the financials.
Thank you. Good morning, ladies and gentlemen. Let's go through the figures of 2016, starting with the revenue. As you can see on the slide, we have a record level €37,600,000,000 up 5% compared to 2015. This is organic growth not including ForEx effects to the tune of 6% and a slight negative ForEx effects of minus 1%.
Usually there's much more swing. So 1% is barely significant. So keep that in mind, 6%. And you also have to remember that this was staggered in the year because in the first half of the year, on the left hand side, you had plus 4%, but the second half plus 7%. So there was a stepping up of growth in the year end.
This was confirmed at the beginning of 2017. You can see it on the next slide because we announced overall 15% growth in revenue for Q1, 13% organic with a 3% effect of well, ForEx effects are mostly due to the yen and the 13% organic growth, most, if not all, of our brands were up and our main businesses for which we report have enjoyed double digit growth, especially fashion and leather goods and wines and spirits at 13% 15%. I beg your pardon, both of them 15% for Q1. So this trend is, of course, very positive indeed. But it well, we had a favorable comparison basis because last year we were only 3% up and so it would be unreasonable to extrapolate this to the end of the year.
Now then back to 2016 on the distribution of revenue by region, not much change about a quarter in the U. S, a quarter in Europe and a quarter in Asia, not including Japan and the rest, 7% in Japan and the main areas, South America and the Middle East and Oceania for the balance. Now then, if still on a geographic region basis, organic growth, you had 6% so that last year. In the U. S, we're close on at 7% and Europe likewise 7%, which is a bit of a surprise because Europe especially at the beginning of the year was hit as it were by the effects of terrorist attacks especially in France, 5% in Asia.
This was stable only negative in previous years. So a rebound in Asia. But Japan, however, because of the revaluation of the yen was down minus 3, but then what you have Q4, the last quarter of 2016 was much better than the rest of the year, improvement in all regions except Japan on the last part of the year. If you look at the various businesses now, same observation, overall growth, then again 6%. We have a rather homogeneous figures, wines and spirits 7%, fashion and the goods 4%.
But if you look at the first half and the second half, the first half was almost nil and second half almost 8%. So a remarkable stepping up in the second half of the year, perfumes and cosmetics and watches and jewelry at 8% 5%, respectively. These numbers are much better than the competition, which is well, the report, those that do provide numbers and selective retaining plus 8%, good number, but this concealed disparities between travel, retail, that was challenging last year because of volatile Asian customers. But by contrast, Sephora performed extremely well. I'll get back to that later on throughout the year.
Let's look at the operating the income statements of 5% growth throughout the year. Let's look at the operating the income statements of 5% growth in revenue. This is the number in euros, not organic. Margin at 63.5%, so up fifty basis points compared to last year. MSEs same 6% and both for marketing or sales expenses, up 6%, both of them.
G and A grew a bit faster. This reflects well, we want to be cautious and there were lots of provisions mostly in G and A and that's why you have a slighter greater increase on G and A rather than MSCs. And so, well, of course, our PRO, profit from recurring operations, 6%, above €7,000,000,000 for the first time. So this is a record high for a PRO. Other operating income and expenses, mostly depreciation of intangible assets, this is a charge, but it's only 122 compared to 220 last year.
Financial income about the same. Taxes are up, unfortunately, not in terms of percentage, but in absolute numbers. And then minority interest slightly down because, well, there were well, the EFS struggled a bit last year, and we have a minority interest and that is why you have less there. Any case, all in all, the group share net profit almost EUR 4,000,000,000 3.9 €1,000,000,000 up 11% compared to last year. Now then again about the PRO profit from recurring operations, main indicator then, broken down as follows on the slide that you have for the various business groups.
The highlights for both the Wines and Spirits and Fashion and Leather Goods are 2 main businesses and with the highest margins of almost 30% on revenue, up 10% both. And so better than the growth of sales themselves. Regarding perfumes and cosmetics, about 5% in line with revenue, likewise for watches and jewelry. Watches and jewelry, by the way, this well, this consolidates the growth in 2015, which was 75%, which was huge. Selective Retailing is down not because of Sephora, which had an outstanding year, but because of DFS.
If you look at the financial structure here, not much change. You can see that if all in all, we have about €60,000,000,000 in assets. About half of this is in equity and then some non current assets, some increase in inventories because of greater well, more activity. But there is, well, credit lines, undrawn trade credit lines from banks about €3,000,000,000 When I mean should we have any cash situation, we could always use that if necessary. If you look at net debt and cash flow, cash flow in light blue, so available cash flow or free cash flow is investment minus variation in working capital requirements.
So having paid for our growth, we are almost at €4,000,000,000 very much like our net income, €3,970,000,000 exactly. Cash flow is not all used for reducing debt, a significant portion to the what, euros 2,000,000,000 almost for dividends. I'll say a word about that on the next slide, dividends. Some acquisitions, some disposals, and all in all, cash flow minus dividends and M and As made it possible to cut debt down by €1,000,000,000 We were at €4,200,000,000 down to €3,200,000,000 in debt, about 12% of equity, a very low level debt to equity, very good performance. By the way, the acquisition of Rimowa last year in Germany was only done legally in January 2017.
So this brings about €650,000,000 debt for Removar, not in that number, but it doesn't change much to the overall picture. And so the dividend, we will be suggesting a €4 dividend per share, up 13% compared to last year. Net income was up 11%, so the growth in dividend is higher than that of net income. We paid an interim dividend of €1,400,000,000 in December. So the balance €2,600,000 will be, I believe, cashed out at the paid out at the end of next week and over a 5 year period.
You have the dividend over 5 years. You can see that it's been growing 5% 9% a year, in line with the trend of the past 25 years, it was up 10% on average. So we were up this year and in line with the trend for the rest of the time. Thank you.
As we have been doing traditionally for a number of years, we decided to consult several 1,000 of our shareholders to ask them what questions they would like to see addressed at this meeting. We're now going to summarize them in the following clip. As Jean Jacques Guillenie indicated, the year 2016 was a record year in spite of an economic backdrop that got off to a bad start after the terror attacks that struck Europe and led to a decline in tourists and an overall drop in business. The situation improved over the 2nd part of the year where we noted more generally an upturn in the global economy, notably in the United States and a recovery for many of our products, wines and spirits in China. So, year 2016, that got off to a challenging start but ended on a far more dynamic note.
Let me say that this situation partly accounts, as Jean Jacques Guillenie indicated, for the results of the 1st part of the year. And I expect a reverse situation in 2017 as compared to 2016, a relatively easy start to the year, but a more challenging second half of the year given higher levels of comparison. So 2016 was an excellent year. I'd just like to review the various business sectors that are all fed well. In 2016, Wines and Spirits that recorded an excellent year, strong growth in the United States and, as I indicated, a rebound in China.
The difficult period in China is coming to an end, and we were able to record growth levels in the market that for several years was impacted by the slowdown in consumption levels following very strict discipline on spending in restaurants for key clients, etcetera. We recorded an increase of 3% in champagne sales and the prestige vintages delivered an excellent performance notably Dom Perignon and Muet et Chandon strengthened its leadership in Champagne. Cognac also delivered a record performance, 10% growth in volumes, which is not without posing a number of questions because these volumes are limited. And so 2017 is off to a strong start, and we're likely to be a little tight in terms of supply. For the iconic creations of cognac, Hencie that illustrates the transmission, the generation transmission within the same family of master assemblies heading up this activity at HENSI for many years now.
We, of course, continued to roll out our value creation strategy by seeping as we have done during periods of crisis that we've encountered in the past, but never to lower our prices but rather to increase them. And the image of our products is outstanding for Wines and Spirits across markets For Fashion and Leather Goods, Louis Vuitton put in an excellent year with a great deal of creativity. What are the new developments at Vuitton this year? I would mention, first of all, that the suitcase created by Mark Hansen that obtained considerable success this very original suitcase that is characterized as compared to all other products on the market to have a fully uniform interior that it has fulfilled its role, a very successful product and excellent for the Vuitton image, connecting it to its roots as a trunk maker, very successful product. The Vuitton Perfumes launch this year met with considerable success and the Louis Vuitton products, traditional leather goods, fashion that is now headed up by Nicolas Giske is continuing to expand, and we can say that Vuitton has, in 2016, obtained excellent results.
We have a strategy for Vuitton, which involves rather limiting the number of stores to improve existing stores. And so in 20 16, we had the opportunity of inaugurating stores that were renovated. The store in Hong Kong, in particular, very impressive stores that since this renovation have achieved very satisfactory results. The other brands in fashion and other goods held up well. Fendi continues to obtain strong growth, thanks to innovative products, thanks to its iconic designer from the origin of Karl Lagerfeld, who is providing us with fashion and leather goods products that are very successful.
For the first time, the company has topped the €1,000,000,000 in revenue for L'Europe piano in 2016. We opened a new store in Avenue Montaigne, an iconic store, a LoRa Piano a piano store that is getting off to a good start, very successful in the other fashion stores also recorded good results. Jueve, Berluti, the only shadow is Marc Jacobs. I won't dwell on that, but we can just hope that the trend for this brand that's an iconic brand in the United States will improve. And I think that with Mark, we find the ways of pushing the business back into profitability.
Since we were asked about acquisitions, about M and A in the clip you saw earlier, We made an interesting acquisition in 2016. Remova, a German company, a leader in luggage of excellence for many years, has received a great many solicitations, but for reasons that I won't expand on here, It's LVMH that was chosen by its owners to become its majority shareholder. And we're very pleased to be able to invest in this German company, which really symbolizes the success of German SMEs that brings to the group its first investment in Germany, a company where quality is a foremost concern, this brand known worldwide offers great potential. Its products are in large part destined for air travel. And when we look at the potential for expanding air travel in the years to come, we can be very confident.
And if the newly installed management team is up to scratch that the products will continue to grow and growth and profitability likewise. So much for that acquisition since we were asked about acquisitions. Of course, it's not the prime purpose of the group to make acquisitions. The prime purpose, I'll return to it later, is internal growth to grow our brands. And if interesting opportunities arise to look at acquisitions, but to do that in reasonable conditions and not to go over the top, that is just to make acquisitions to grow without having a specifically defined rationale that's consistent with our strategy.
On perfumes and cosmetics, the group has continued to grow market share in a very competitive sector. Dior Sean, remarkably with the launch of its iconic brand for men, Sauvage, you probably saw the new ads and this product that was launched at the end of 2015 in 2016 is one of the leaders in many countries as the leading men's fragrance on the market. Guerlain is also continuing to make great strides as well as the other smaller brands of the group. What's interesting in this business is the creativity displayed
and
the fact that we now have a proximity, thanks to its management with Zephyras, so we can sense the latest innovations in the market and to see what are the trends that are the most promising in terms of creativity. But all this, of course, gives rise to a great many plans that we can, of course, return to over the next few years. Sorry to go on listing the various sectors that all performed excellently in Watches and Jewelry. We encountered a great deal of success. Bvlgari, notably, that delivered performance that outperformed the market with the renewal of its Serpentine line.
You may have saw the small pendants, the small jewels designed for this line that have met with considerable success as well as a whole set of other products. I have to mention the TAG Heuer connected watch that's a big hit because, of course, we're facing here peers, competitors from other universes. TAG Heuer is the only genuine watch brand that manufactures connected watches. When you're buying a Tag Heuer connected watch, you're not buying a computer to put on your watch. You're not buying a mobile phone, but you're buying a genuine watch.
And there are a number of innovations in the pipeline to develop that still further and to become the leading connected watch brand. Selective retailing also performed well. Sephora has continued to break new records both in the physical stores and online, thanks to the dynamism of its teams. I won't recall here the long history of Sephora. I believe I did that last year.
That's an interesting history. We're accelerating expansion across a number of countries with the omni channel system that's now set up. You can order online, pick up the products in store, return products that you're not satisfied with to the store, all this is driving strong growth. DFS, well, more challenging because of the situation in China. Chinese are traveling less.
And the situation in Hong Kong that I won't return to here, but we hope that all that will improve gradually. Let's end 2016 with the incredible success of the exhibition that we put on at the Louis Vuitton Foundation, the Stukhin collection by a Russian collector at the beginning of the century, 1,200,000 visitors. That's an outright record for painting exhibitions held in Paris. That's what we can say to summarize 2016. And let's now turn to the strategy and outlook for 2017, let's just take a look at a short film before that.
Well, 2017, as I've mentioned earlier, is getting off to a start that's pretty much symmetrical, but in the opposite respect of 2016, but it's at a time when the results are excellent that we need to be the most attentive, the most vigilant and the most prudent. Experience has shown that there's nothing worse than complacency in a company that's doing well. And this tends to exert an influence that is both soothing and demotivating. But I have to say that at LVMH, we're all paying far more attention than during a period when results might have been more challenging. And of course, the ambient euphoria and the current pretty surprising, in my view, that the climate continues to be promising, but it also seems to carry with it major risks I've rarely seen since I've been at the head of this wonderful company, a period of 10 years without a major crisis.
The last crisis dates back to 2,008, so we're nearing the 10th anniversary. Moreover, we're living very surprising times. Interest rates are at an all time low, 0 or even negative because thanks to our great CFO, we can now borrow at negative rates, that is that we're paid to borrow, which is all pretty extravagant. Currencies fluctuating against all expectations. The dollar is rising.
The euro is declined. Markets are awash with cash. We're prepared to do very silly things. And to top it all, share prices never stop rising. So we are in a period that requires a great deal of vigilant.
And I wouldn't be at all surprised, I can't say when, but if over the next 5 years, next 3, 2 years, I don't know, we find ourselves facing a pretty severe crisis because all this money poured into the market. And I hear mention of deregulating banks. We saw what happened last time. We need to be prudent. This prudence should not lead us to be Malthusian.
We continue to focus on growth, but we need to be prudent all the more so that in this period of crisis, there are opportunities. I won't recall here the opportunity that we seized at the last crisis. I don't want to engage in controversy, but generally, such times offer good opportunities. That's for the midterm. But to describe the context, I believe we need to be extremely prudent.
And so the strategy we're adopting and here again at the risk of retiring you, but let me say that is to continue to roll out the strategy that we've adopted for many years, that is to focus on the values of the group that are creativity in innovation, the search for quality and motivating our employees through dynamism, mobility and entrepreneurship. How is that reflected in our business? In terms of innovation and creativity, we will continue to surprise. If we take Louis Vuitton, well, this week, we were with Michael and Jeff Koons in this very building in the Louvre Museum, up 1 floor where we launched the new Vuitton products designed by Jeff Koons. I'm sure that it's going to be a great success.
It's the first time that man we can consider the most well known living artist who's decided to collaborate with Louis Vuitton. The fact that he's chosen Vuitton is no accident. Vuitton is the world's leading brand, but this artist whose characteristic is to break down the codes in the artistic sphere, but always has an eye to for quality. And when he decided to work with us, he was sure that with Rivieton, the products that he was going to design that are quite outstanding, well, there's no photograph here, but you can go and visit them and see them in the stores, of course, when they're there, if they're not all sold out in 3 weeks' time. We have to manufacture the products and, of course, prompt some expectations so you'll be able to go and see them.
And I'm sure you'll understand and see for your own eyes the level of quality in the works that are reproduced very finely and the quality of the metal work and the metal parts inserted in the leather goods almost on a par, well, not with a work of art, but with products that will become, without a doubt, iconic products. And as is the case for good wine, it improves with age. You buy it today, wait for 10 years and send sell it more expensively. That's what happened in Champagne with Dom Perignon, the same artist, a product that is now sold far more expensively on the Internet. So a great deal of innovation at Louis Vuitton, the last fashion show that was excellent, TAG Heuer, the new connected watch coming out, a Dior, many new products, the Care product most recently launched, Life, very interesting product, the latest fragrance launched by Guerlain, Mont Guerlain with Angela Jolie as Amber's address and a new Sephora line that we want to launch for Rihanna.
We expect that to be very successful because of the global star status of the artist who will create them with Sephora and millions of followers on the net. So a lot of a great deal of innovation. We're, of course, going to be innovating. On the manufacturing front, we're opening up 2 manufacturing plants for Henzi. We opened a jewelry workshop for Bulgari in Italy.
That's for the first part. The second part of our strategy, quality, we will continue to manufacture high quality products by paying unquestionable and irreproachable attention on the entrepreneurial spirit. Entrepreneurship, it's a key hallmark of the group that accounts for its success. The group today for the 10th or 11th year in succession is the group that attracts the highest number of young graduates. The survey that was published by Le Monde newspaper, which shows its independence.
And this survey revealed once again that way out in front is LVMH as a great place to work for young people and that accounts for our success. We thanks, 1st and foremostly, thanks to the great set of brands that we make, we can, through entrepreneurship, attract youngsters and who are sure that they can have a great career at LVMH moving from one business to another with opportunities to progress, thanks to the entrepreneurial spirit of our teams. We're displaying a great deal of entrepreneurial initiative, notably on the net. And in a few weeks, a few months' time, we will be unveiling a major initiative, of multi brand e commerce, but I can't tell you any more about that because it remains confidential. Let me end with what is of prime importance for us.
It's our sustainable commitment and everything we have done for a very long time now because we were the first, I believe, some 25 years ago to set up an environment division. We were the first to sign the UN Compact in 2,001. And since that period, we've always devoted great attention to the environmental aspect of our business with specific objectives on the eco design of our products, the traceability of our materials, the reduction of the consumption of water and energy and reducing the waste produced by our stores and workshops and reducing CO2 emissions. Success of the carbon fund in 2016, every tonne is valued at €15,000 It's 6,600,000 euros that were invested in 26 projects that reduce our CO2 emissions. And we also made great strides in reducing our energy consumption, down 14% in our stores the share of renewables, up 19% and a reduction of some 5% of our greenhouse gas emissions.
So the good economic performance of the group was secured without increasing on a like for like basis our energy consumption. All this was a major effort we wish to reward by awarding prizes to the most exemplary stores, and we plan to continue to develop eco design. Several products have been launched following this approach. Here again, I won't go into details, a whole set of products that are eco designed. All this allows us to care for our environment and another aspect of our development is to be very attached to the diversity and professional makeup, we have 38% of key positions that are held by women as compared to back in 2,009 where that figure was 26%.
So we're making strides. We launched
the LVMH
Connect initiative. We're seeking to sustain the transmission of know how of excellence by hiring young people and we created the institution of trades of excellence that train several hundreds of craftsmen and women through ties with educational institutions, we hire young apprentices who undergo an internship with us and work as part of this training program. And the institute, the LVMH today offers 15 training courses in various countries including France. And we recently launched the initiative of LVMH next to the foundation in the Bois Boulogne that will contribute to this training program of artisans as part of the trades of excellence, which will be designed and built from the existing building by Frank Gehry so that in terms of the aesthetics, that's in full harmony with the foundation building. That's what I wanted to say and we will, of course, be available to take your questions.
And before closing, let me congratulate and thank all our executives, senior officers. There are a number who are in attendance today who've contributed to the success of the group and remain very focused on its development as well as the 140,000 employees that explain why we can hold an AGM such as this and offer you a small gift as you leave. Over now to Madame Boile, statutory auditor.
Ladies and gentlemen, dear shareholders, good morning. It is my pleasure today to present on behalf of the auditors the reports prepared for your attention. All these reports were made available to you. They are to be found in a registration document, which was handed over here as you entered this room. I will not go through it.
I will simply read the excerpts that are put to you through the resolutions. There are 7 reports, 2 on the financial statements, 1 on regulated party agreements and commitments and one on capital transactions. Now first on the consolidated financial statements the parent company, the financial statements on pages 226 and 227 and page 200 of the registration document respectively. Our documents took into account the specificities of this group in terms of business activity, organization, accounting rules and internal audits. These reports are then sent out to top management, the Board of Directors and the Audit Committee.
Regarding the consolidated financial statements, this is done with the auditors working in various parts of the groups. We certified the consolidated and the Penn company financial statements without reservations. We also have a report on regulated party agreements and commitments on pages 228229, listing the agreements between the company and executive officers or this company and other companies that have directors in common. These are related parties. There is a special report on the amendment regarding the relationship or the support services provided by Groupe Arnaud.
The conventions that were approved in previous years and were continued in 2016 are also listed in this self same report. Finally, regarding the extraordinary part of the shareholders meeting, we have 4 special reports on resolutions that may have an effect on the capital stock. You have this in pages 282,286 of the registration documents. They are reduction of the capital. They are authorizations to grant share subscription or purchase options, issue ordinary shares and or marketable securities for employees, you also have marketable securities with retention and or waiver of preferential subscription rights.
We have no special reports on these operations that are part of operations included or provided in provisions of the code of commerce. Thank you. Thank you. And now members of the executive committee may join me up on the stage to take questions that you might have. Ladies and gentlemen, if you have a question, please introduce yourselves first.
I can see a question with sign number 5. Hello. I have been a shareholder from day 1. On page 470, I see that in non current assets, you propose to pay back to DAGO €8,000,000,000 at the request in return for their stake in the group. But if we go back to French banks, how will you be able to pay out this sum, which is a lot of money because it is about 8% of your market value.
Well, I mean, the probability seems rather low, but Mr. Guillani will tell you about this. He has a few specification a few details about this €8,000,000,000 The €8,000,000,000 on long term liabilities are all the commitments that is that the puts against us that some of the minority shareholders can take. So DAGO, of course, the actual amount is less than SEK 8,000,000,000. That's the first point.
The second point is the financial structure of the group is very comfortable. And should there be, I mean, should you see, the AGO decided to sell us the 34% they have in Muertenci. And by the way, you will note in the same text that this would include a 20% discount on the fair market value, that is the objective value of Muerten Si. So it's for them, it wouldn't be a very comfortable decision to make. But in that case, our own equity, our own resources would make it easy for us to meet that commitment and pay that bill.
Mr. Colange, I am a representative of individual shareholders. Congratulations for the registration and the voting boxes. That's good news. Could you tell us where we can get a recording of the exceptional concert that was given in Moscow with your wife and son and then more to do with the general meeting.
Why did you sell De Beers Diamond Sparks Jewelers? Last week, we had the chapter, the spring chapter
and also for those watching on our web page.
French wines, meaning the competition, sparkling wines from abroad. What will be your role's face to the competition? What will Christophe Nabard do? And what is the connection between Francis Caujean and perfume maker Francis Caujean and LVMH? Thank you for the kind.
First question, leave your name to Jean Jacques Guillenie and you will get a DVD of that concert. Regarding the sale of assets, the disposal of assets, including De Beers, that's cleaning up the portfolio. We're looking at businesses which do not seem to have the expected potential or the profitability is not up to expectations or indeed in the case of De Beers, we felt that this was a business where we found no potential, but moreover, the group of which we had a 50% stake did not own the brand. And so in that case, after 10 years or so, we decided I mean, 10 years of hard work did not lead to the expected results, so we decided to focus on Bulgaria instead, hoping that one day Bulgaria shall become the number one brand, jewelry brand worldwide. About the champagne lobby, we have a great brand called Chandon, and that brand I mean, it is a sparkling one, but a French one, and but it was created by the founders of this house more than 30 years ago in Brazil, the United States, China, India, we're selling that wine worldwide.
So this is a great opportunity. And the main thing is to create value. If all Chinese drink half a bottle of champagne a year, that would swallow up the entire production of the region. So it is essential to have such an offer. And indeed, Chandon has created much more value than many small brands of champagne.
Regarding VINE EXPO, that event on sparkling wines and showing France's presence in the business. I think this is something of a responsibility for us because we are in this business and it was for us to be to take leadership in this. And we are, of course, facing competition from Pro Wine in Germany. So this is our chance to promote French wine around the world and become, as it were, the ambassadors of French Art of Vivere. Now regarding Francis Corjan, we have just purchased beautiful enterprise, and we're looking forward to great business in the future.
Niche perfumes are an outstanding opportunity for us. Thank you. Question number 5, again. Arnaud. My name is Roger Tran.
I'm an individual shareholder. I have three questions, but I should like I would like to thank you for the Schutteens exhibition and congratulations to your chef in Chamonix who got his 3rd year 3rd star, Dimitris Hina, congratulations to him. But Louis Vuitton perfume, are they let me put it this way. I'm looking at the Chinese community here and you've the one bottle is worth €200 So do you believe that it's only the Chinese community or Chinese tourists that can afford that sort of thing? And then you were received by a millennia Trump prior to Donald Trump's inauguration and you went to Moscow to play Mozart again.
I mean, were you able to were you able to reconcile in a way in your friendships both Mr. Putin and Mr. Trump? And finally, the Saint Martin, where do we stand now? Michael, maybe you can say something about the Vuitton perfume.
Yes, euros 200 a bottle. We believe this is an entry level price for Vuitton store, but of course it is high end for the general market. This is a rather exceptional item that can, in a way, reconcile both markets. I don't want to tell you about my relations with foreign heads of states. This is the LMVMH general meeting.
I mean, these are, of course, relations with foreign states have an effect on our business. Looking at the Russian economy, I met Mr. Putin repeatedly. And I can tell you that the Russian economy is less challenged than you might think by the drop in oil prices or indeed by the sanctions that have been implemented against Russia. And so looking at our Russian customers, of course, when the sanctions came down and when the price of oil came down, that these customers were less present, but now they have come back.
And regarding the U. S, there's a rebound in economic growth in the U. S. I don't know whether this is a sustainable trend, but and it's true that the stock markets went through a stage of euphoria now. Now that the interest rates are climbing back up, I suppose that euphoria will calm down.
And there are intrinsic risks in this situation where interest rates are low and credit is easy. And again, we find something of a bubble or say a surprising situation for the stock market. But as we speak, the U. S. Economy and as regards our own activity, the U.
S. Economy is, of course, buoyant and good for us. Regarding the question on Samaritan, well, we are entering a more controllable stage because we are entering the construction phase that started in 2015. Reopening is scheduled for the second half of twenty eighteen towards the end of 2018. Further questions?
Yes. Good morning, sir. My name is Gerard. I represent ALAVE, the French Association of Individual Shareholders. In a survey conducted with your shareholders, you indicated a number of issues of concern or of interest.
You addressed most of these issues, But you have said nothing. It seems to me, you said nothing about the digital economy and e commerce. And so specifically, I would like to know whether you could tell us whether the group, maybe not on a business by business basis, but at least for the group as a whole, how much business is being conducted through e commerce? Thank you. Look, I will let Tony handle this.
We do not report on amounts or percentages, if only to preserve competitive confidentiality. But we are looking to the digital economy, not just e commerce by the way, but also the management of our own business. And indeed, communication is very much present on digital media. Digital business may be a marginal part of the overall picture, but it does put you put us in touch with key partners, startup companies in France or in the U. S.
Mr. Arnaud has said a lot. I can confirm now that the digital economy is now part of a strategy because luxury customers are very much connected to the digital world. There's a lot of Internet research. And we find that about 65% of our customers go through the internet if only to find out more about our products, to know about the brand or indeed to buy things online.
We have a center of competence. We are investing in digital technologies, about 30% of our capital expenditure has a digital dimension. And regarding e commerce, that is sales online, we have a number of brands. I mean, Sephora and Ouivita are cases in point. It's not so much a matter of sales, but the idea is that we want for our customers to be able to get the same sort of experience online as they get in a store.
Question number 2. Hello, my name is Yves Du Gallier. I've been a loyal longstanding shareholder of this organization. I would like to draw your attention, Mr. Arnaud, to the fact that you are considered to be probably the wealthiest man in France.
Of course, this is good for you, but it is also good for us because, of course, I believe that if you are well-to-do, it's because the share price is healthy. And so indirectly, we can benefit from your success. That's just a comment. But I do have a question about the price of the share, the LVMH share, it's upwards of €200, do you intend at any point to divide up that is to split LVMH shares to make the share price in a way more affordable to the general public to democratize. I mean, I hope you don't find anything shocking about the concept That so splitting share into half or have a well, handing over free shares that would also bring the share price down.
I'm a fervent admirer of democracy, but running an organization or running a commercial concern is not at all democratic. If you try to put democracy into that, it will not work. Regarding the share price, it's true. The share price has gone up. It stands at more than €200 makes it expensive, but there are companies around the world where an individual share will set you back even more than that, and indeed, where the share prices keep going up.
So I don't quite see the need today to have this split thing to have 2 new shares for the price of 1 old share, it's not it doesn't seem indispensable. Euros 200 is the price of a bottle of perfume, as Michael pointed out. So lots of people can afford that. And of course, there's an elitist dimension, but this is after all a luxury business. And it might make sense for the share price to be to reflect in a way the high standing of our products.
Mr. Grioni, regarding free shares, well, if you look mechanically and financially, what they're giving out of free shares amounts to, it's like increasing the dividend because you maintain the dividend, but you increase the number of shares. You saw that I mean, we saw that increase the growth of the dividend is one of our priorities. So as dividends are indeed growing steadily, there's no need to hand over to hand out free shares. Thank you.
Question number 1 now. Good morning. My name is Claire Lermit. I'm an individual shareholder. I had a question about Grasse.
I saw a few pictures in one of the clips and there are 2 of us at least in the general meeting along with my daughter, to have a great interest in this town, where I believe you have now been for a couple of years. Thank you. Well, yes, we have set foot, as it were, in Grasse, and this is Louis Vuitton and Dior, and maybe Michael, who was very much involved in the building and renovation of this site can tell you more about this. Yes. So you're talking about the Labastide de Fontaine Parfumet.
Now this property had been run down for the past, what, 50 years, right at the heart of Grasse. And this was our opportunity to return to Grasse because after all, Grasse was the world's capital of the glove making. And so you had leather plants, leather tannery plants in Grasse back in the old days. And so this is both leather goods and perfumes. And remarkable thing is, together with Claude Martinetes of Parfendure, we were able to create creation platforms for our perfume makers at the very heart, at the very core of this new business for Louis Vuitton and an older, as it were, tradition for Dior was revived through this new site.
So there's a friendly competition between the two brands of the group. And I believe that the products we will be creating in France will be of world standing. Thank you. Question number 2?
Hello. I'm a long standing shareholder and customer. A question about the Chinese market that is being very volatile of late, and I'd be interested to know what the group strategy is for this very important market. Well, the Chinese market is clearly a very significant market. China is ranked 2nd in terms of global economic power.
The Chinese population is very significant and traveling more and more. So the Chinese market, which having gotten off to a pretty erratic start, is a very competitive market where customers are increasingly knowledgeable and travel far and wide. So our strategy is to have an established presence. It's not to have a very significant number of stores, but very focused and significant stores that allow the Chinese to discover our houses, be it Christian Dior or Louis Vuitton and the perfumes brands and to elicit their interest in the history of our companies and everything that they convey in their authenticity. Initially, in China, as was the case in Russia, it was relatively easy for a brand that claimed to be French to set up shop, to advertise and be successful.
Now what customers who become are becoming exceedingly exacting and demanding is the authenticity behind the brand. That's why we're adopting this strategy, which is perhaps less swift in terms of growth, but does genuinely preserve the ties between the brand, the customers, France and China, and thereby achieve a long term vision, which is our goal. And for Louis Vuitton, that has been the number one brand in China. We're there since 1991 to have as its goal, and I'm sure we'll achieve that, to remain the leading brand in China and the highest in terms of image in the eyes of the Chinese customer. Well, if there are no further questions, I suggest oh, yes, there is one further question over there, yes.
And then we will move to the vote on the resolutions. In the voting policies, many companies review financial authorizations beyond 10% of shares with a ceiling of 32%. Why do you feel the need for that? Mr. Coon, would you like to respond to that technical legal question?
Sorry
for disturbing. I'll answer. Transactions that we might be led to make this year. We have a significant number of resolutions. It's the year when we renew these authorizations.
It's every 2 years, and this year, we're renewing. The idea isn't to use it. The idea is to have that facility available. You know that when we are shareholders to pre authorize a number of transactions, we've never availed ourselves of that opportunity, but we'd like us to do that. It's a precautionary principle but doesn't really serve very much.
Let's now move to the resolutions. Let me point out that we've reached a quorum with over 81 percent. First resolution approval of the parent company financial statements, please vote.
Approve.
Approve resolution number 2, approval of the consolidated financial statements. Please vote. Approve to Resolution 3, approval of related party agreements and commitments. Please
vote.
Approve resolution number 4, the dividend. Please vote. Approved. Resolution number 5, renewal of Ms. Delphine Arnott's term of office.
Please vote.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:]
Approved. Well done, Delphine. Resolution number 6, renewal of the term of office of Mr. Nicolas Basieux. Please vote.
Approved. Well done, Nicolas. Renewal of the term of Mr. Baloney, please vote. Approved.
Well done, Tony. Renewal of the term of Diego de la Valle, please vote. Well done, Diego. Renewal of the term of Marie Jose Kravis. Approved.
Congratulations, Marie Jose. Renewal of the term of Marie Laurence, please vote.
Approve.
Approved. Well done, Marie Lour. The appointment of Pierre Godet as advisory board member, please vote. Appointment of Albert Freres as advisory board member. Please vote.
[SPEAKER PAUL EDGECLIFFE JOHNSON:]
Well done, Albert. Renewal of the term as Approved. Well done, Paolo. Next opinion on terms of my compensation, please vote. Approved opinion on Tony Beloni.
Please vote.
Approve.
Approved. Resolution number 16, approval of the compensation policy for Executive Company Officers. Please
vote.
Approve. Approved Resolution 17, authorization to be granted to trade in the company shares. Please vote. Approved Resolution 19 authorization to be granted to reduce the share capital by retiring shares subsequent to the previous resolution. Please vote.
Approved.
Resolution number 20, delegation of authority to the Board to increase share capital maintaining preferential subscription rights.
Approved. Resolution 21, delegation of authority to the Board of Directors to create increased capital without preferential rights. I asked 22 delegation to the board to increase the capital through private placement without preferential rights. Resolution passed. Resolution 23, authorization to the board to set the issue price of shares within 10% of the share capital.
You can start loading now. Approved. We have Resolution 24, delegation to the board to increase the number of securities to be issued in case there is oversubscription. Please vote now. The resolution is passed.
Resolution 25, the delegation to the board to increase the capital share in case of a public exchange offer. Approved Resolution 26, delegation of authority to the board to increase the number of shares to issue new shares as part of contributions in kind. Approved. Resolution 27, authorization to grant subscription options or share purchases to employees or executive officers. Please vote now.
Approved. Resolution 28, delegation of authority to issue shares in favor of members of the company's savings plans. Approved. Resolution 29, determination of an overall ceiling for capital increases. Please vote now.
Approve. Approved. And Resolution 30, Amendment of the company's bylaws. Please vote now. Approved and 31st and final resolution delegation to the board to amend the bylaws in order to ensure compliance with new legal requirements.