Ladies and gentlemen, I'd like to welcome you to this shareholders' meeting of our VMH. Just a few legal comments that I am to make. First of all, the scrutineers propose that we appoint Mr. Nicolas Basieres and Mr. Florian Olivier here present.
And as meeting secretary, Bernard Kuhn, who is also in attendance. We need a quorum of 1five of
the
voting shares and onefour for the extraordinary resolutions. The attendance sheet has been drawn up. The bureau will approve it before we vote on the resolutions, but I can indicate that the quorum has been reached. All the necessary legal documents required have been made available to shareholders. And let me inform you of the presence of an officer of the court to ensure the smooth running of the proceedings.
The agenda is on the document that you'd received, and those documents are available at the entrance to this hall. Over now to Mr. Jean Jacques Guillony, who will present the figures because the purpose of this meeting is to present them. The results for 2015 have already been published. Mr.
Jean Jacques Guillen, our Chief Financial Officer, will run through them briefly.
Good morning, ladies and gentlemen. Let's go through the main figures for 2015. As I usually do, we'll look at revenue sales. As you can see on the right hand side, that's €35,600,000,000 a record amount. There will be other records, which are mentioned, but this is the first that Achal mentioned.
Sales are up 16% compared to the previous year. This is broken down in an organic part that is our sales in our usual currencies. And then the exchange effect, the currency effect that usually is a well, that's a passive effect. But here, it's a positive effect of 10%. We can only be happy with that.
Still on revenue, the breakdown by geographical regions, this picture doesn't change much year to year. Still, the first comment is the overall balance. France plus the rest of Europe at about 28%, the U. S. Is 26% and Asia 27%, other markets 12%.
You should also note the increased share. 26% is because, well, this is a dynamic market, but there's also the dollar effect because this breakdown is looking at revenue in euros for accounting reasons. If you look at growth in different regions, as you can see on the table, you have the 4 main areas, main regions. The U. S.
Was up 9% robust growth after 4 or 5 years of growth on the same at the same rate. So this is constant growth. Europe, double digit growth. This is pretty unusual. This is a welcome development, but this has to do with the wave of tourism in Japan and in Europe last year and that made it possible to undraw more growth.
So Japan and Europe, but Asia excluding Japan goes the other way. There was a well, there's a monetary erosion, but local factors in Hong Kong and Macau that have resulted in this negative development. If we look at the revenue by business group now, SEK 36,000,000,000 broken down in different business areas. On the right hand side, that is organic growth, which is, of course, the main indicator of our overall performance. Wines and Spirits excellent year 6% organic growth, well balanced between champagne and cognac with a stabilization of cognac in the U.
S. And a remarkable growth in the U. S. For cognac. Fashion and Leather Goods up 4%.
That's a positive development as well because we are repositioning drastically indeed, re this it remained good. Perfumes and Cosmetics 7% and this is well above the industry level, so we can be very proud. From likewise Watches and Jewelry 8% there. Now Selective Retailing, this you have 2 Carteret developments. Sephar enjoyed great growth last year, but DFS, DFS and Sephora are the 2 main businesses in selective retailing.
DFS is very much Asian oriented and there we had the negative effects that I mentioned earlier, but all in all 10% organic growth and that is pretty good. Now if we look at the other numbers for the income statement and the revenue I mentioned, Gross margin pretty much in line with revenue growth as well, 17% stable compared with last year. Marketing expenses now up 18%. Well, there's the exchange effect. If you didn't include the currency effect, it would only be 8%.
Likewise, general and marketing expenses, it looks great big at 12%, but the actual correct figure is only 5%. And all in all, the profits from recurring operations, which is the main indicator of our performance, up 16% and very much in line with the growth in revenue and the stable the margin is stable at 6,600,000,000. This is a record figure for our group and that's the 2nd record figure that I announced and we'll go more into detail breaking it down in different business areas. If you go down the income statement, other charges and income, you have asset depreciation of intangible asset and some tangible assets with some restructuring. The financial result, well, it's EUR 400,000,000 compared to EUR 3,000,000,000 last year on the positive side, but last year we had the effect of the capital gains due to the disposal of Hermes.
So it's not a like for like comparison. Income tax, well, is down, but we find ourselves in a tax environment, which is not conducive to lower taxes, but it is down because the well, partly because the Hermes operation was a one off and that cost us some taxes last year. The income tax rate is 33%, about the same as it was last year if it was restated because of Hermes. We have the you have the surge group and DFS, which had 2 which went into opposite directions and overall, you have a stable result. So if you leave off the Hermes operation, which was a one off, the group share of net profit is in fact up 20%.
Now if we look at the numbers by business group, the Wines and Spirits up almost 20%, way above the revenue growth that we saw last year. Fashion and Leather Goods, in spite of the reorganization of some business areas, especially North America, which I mentioned, is still double digit growth. Perfumes and Cosmetics and Watches and Jewelry, remarkable growth, no need to comment on that, way above again growth in revenues. This means that profit margins are up there and selective retailing just like well, you have 2 opposite factors, Sephora up significantly in terms of margin as well, whereas DFS is suffering the effects of the negative the downturn in the tourist market in Asia. If you look at our financial structure, total equity accounts for 45% of our assets, which is significant.
Non current assets slightly up and that's because there was a revaluation of the minority stakes in Wines and Spirits. Inventories was also up slightly. We still have €3,500,000,000 in undrawn credit lines and that again gives us room to maneuver if we need additional cash, which means that should say the treasury bills suddenly disappear from the market, we would have cash from other sources. A few words about the net debt and cash flow. If you look at the right hand side of the table, we start with the light blue, that's a disposable cash flow that is cash flow minus working capital requirements and minus CapEx.
And so that's what allows us to buy for additional acquisitions as a 3rd record because it's in a 3,700,000,000 in 2015. Never did we have such a significant, such a large surplus of cash and that surplus cash was used to some extent for acquisitions, but well, more was used to pay out dividends. And then, of course, the balance was used to reduce our debt. If you look at the dark blue column, the debt went from €4,800,000,000 to €4,200,000,000 between 2014 and 2015, that down 600,000,000 and that downward trend has continued since end 2013, because we acquired Europeana in 2013. Our debt was high then and now we are down to the levels before the La Rupiana acquisition and a debt to equity ratio about 50%, well not quite if we look exactly at the gearing looking at net debt, it is only 16% of debt to free cash flow ratio is only 16%.
If you look at the dividend, we have €3.55 We have €2.3 already paid out. This overall payout is up 11%. This is compared over the long run. If you look at the dividend over 20 years, we had a 20% increase, 10% over 10 years and 11% up over 5 years. So this 11% increase is still in line with our long term dividends policy.
Thank you for your attention.
Well, ladies and gentlemen, as we traditionally do now, we have been doing for some 6 or 7 years, we'll begin by showing you a clip that summarizes a number of questions that we'll put to shareholders during the course of March. So as Jean Jacques Guillenie indicated, the group results in 2015 were particularly attractive and have reached a record level. We can begin by asking ourselves what are the reasons why the group has performed so well last year with an economic backdrop that was mixed, both buoyant on the exchange rate front, but in terms of geopolitics, rather disrupted. The answer to that is our brand portfolio. The LVMH throughout the world is the group that has the portfolio of the finest brand in the universe of high quality products.
And this has given it over the years and particularly last year a significant advantage because we have both a unique brand portfolio and one that is diversified that goes from wines and spirits to fashion through leather goods, perfumes and cosmetics, jewelry, selective retailing. And we launched a few years back a small business but is nevertheless attractive that grew last year with hotels and is progressing well and with the some of the highest ratios in the industry. So this portfolio of brands, in order to continue to perform as well. It mustn't just be the best, but it needs to be nurtured and maintained. And I can tell you that in 2015, the teams of the groups in all areas were particularly efficient.
We have, for example, in Wines and Spirits managed to reverse the trend that unfortunately was going in a negative direction in China for some 3 years now. And progressively, business is on the rise in this country, and it's confirmed in 2016, a major success in the United States for our cognac brands. Innovation was also present in a sector that perhaps innovates less by definition because we haven't created new products with the swiftness and frequency of other businesses, but we have new vintages, new products, new means of communication, building on our results, and we're outpacing our peers. In other areas, innovation was also very strong, strong in fashion, leather goods, notably at Louis Vuitton, where the success of the collections presented continues to be very significant. And what's more, this year in 2015, there was a major innovation, which was the Grand Palais exhibition demonstrating that the history of Louis Vuitton is closely linked to its current situation.
The exhibition was an enormous success. Many of you have no doubt visited it. We try and invite all our shareholders. It's free. It was very difficult to get in at times because there was a full house.
And this is the result of a subtle mix of tradition, history, the historical legitimacy of the company and modernity, which accounts for its success because at Louis Vuitton. For many years now, we have managed to combine timelessness with the finest modernity confirmed by all the creations, and we will continue into 2016, as we'll explain in a moment, in the other fashion brands to a great deal of creativity. You saw in the small field the opening of the Fendi flagship in Rome. We also opened the Palace Fendi at the end of the Via Condotti, which is a great success and one of the most visited stores in Rome with a restaurant on the roof, a modern, very fashionable restaurant called Zumo, the Japanese style restaurant that's always full. So that's a big success, and it's creative in this Italian Palace to have brought in modernity, both through the products and the attendance of many visitors.
I won't dwell on the success of products that you're familiar with in other fashion brands, continued creation at Celine that has delivered strong growth. Many other new developments at Givenchy and Kenzo, very successful. And I have to say that the young designer who is barely 30 from Loewe reveals the new wave of designers and manages interesting to adapt to the history of a company that's one of the most iconic Spanish brands, Loro Piana. Of course, I must mention Loro Piana, one of the members of the Loro Piana is with us today at least. I assume that's the case because I'm dining with him this evening.
And that has a great impact on the quality of the raw materials that are bought throughout the world by this company. And that accounts for the success of the group in 2015 because this brand offers the market products that are absolutely unique in cashmere and wool. Well, I won't go into the details of all that, but it does account in large part for the success of this iconic brand and the brand of the finest quality of manufacturing in Italy. In perfumes and cosmetics, I won't dwell on the success of our brands, notably of Christian Dior that has delivered an exceptional launch with the Eau Sauvage perfume with Johnny Depp. And the advertisements and press advertising, it's already number 1 in most countries throughout the world and it has a lot of potential ahead of it.
So the results of Dior perfumes that you saw are driven by the success of its new creations. Here again, great creativity. In the other activities of the group, I won't review them all in detail, but we're seeing the same level of innovation that is key in watchmaking and in the activities of Bvlgari offering new lines, women's watches, new jewelry ranges and whose increase is probably the best of all the watches and jewelry universe in 20 15. Let me point out in passing the connected watch launched by TAG Heuer. I have one here.
You can take a closer look at it later if you like. And this watch is so successful that we can't meet the demand. We could have sold 3 or 4x more than we've sold. We're accelerating production. In fact, we're already designing and manufacturing the next timepiece, one that will be even more efficient.
The TAG Heuer teams believe that it's far more efficient, far better than all the other connected watches on the market whose names I won't mention not to have get into trouble with their manufacturers. What's more, it really looks like a watch, which isn't the case of those of our peers. So great success on that front. Selective retailing also has delivered excellent results, especially Sephora that continues to grow. In the U.
S, the growth is such that Sephora in the United States will be 1 ahead of its peers, which is a great performance. Let's recall that 10 years ago, people were saying you will shut down that business. There's not a great future for it in the United States. And we're expanding on the Internet, too. That's very successful.
And revenue, I won't mention it, but it's a secret. It's very considerable, between €501,000,000,000 just to give you a range, with retailers, the online retailers, all those that we're familiar with, are posting a deficit, at least many of them are here. Profitability is better than in our stores with a whole set of innovations. The only fly in the ointment here is DFS, as Jean Jacques Tierney mentioned, which suffered last year, which will continue to suffer this year from the geopolitical problems in Hong Kong and Macau, where unfortunately much of its revenue lies, but we'll be reducing spending and contain the negative impact of that situation. So 2015, a record year, thanks to the personnel and all the managers and employees of the group who many of whom are here, whom I'd like to congratulate because it's thanks to them, thanks to their drive and determination, thanks to their passion for these businesses that we've managed to make such great strides in 2015.
And now we must try and do even better in 2016, but that's another matter. Let's now look at the second clip. So in this section devoted to strategy, because a question was put to me about strategy and outlook for the group. Let me begin by saying that the group strategy remains unchanged. So in this type of presentation, tend to be rather boring because I repeat year after year what the strategy is.
It may be refined over the years, but one of the reasons for its success is precisely this continuity and its duration over time, a shared vision with the leaders of the group that you know that accounts for its performance. And this strategy is based on the group's values. The group's values foremost among which are innovation, creativity and creation for a group such as LVMH. It is fundamental to innovate. The success of our group is based on one word, which is desire.
Everything that we do in LVMH must elicit desire, be it in our cosmetics, in Wines and Spirits. So earlier, Mr. Leuton, who was talking to me about the 2015 Cheval Blanc vintage. That's going to elicit desire because it's going to be an exceptional and great year to elicit desire with our designers, but this innovation must also be focused towards practical creation. It's not about creating something that is just there to fill the halls, the rooms of certain museums or to remain on the shelves of stores.
It's all about creation that pleases our customers and is sold successfully. We seek to have a differentiated strategy contrary to what I see here and there. Our approach is a differentiated approach and to respect the creative legitimacy of our companies. If we take an outstanding brand such as Louis Vuitton, I believe that its success really reflects the opposite nature of its strategy, but it mustn't be changed. Louis Vuitton mustn't become a fashion company.
It's an accessory. Louis Vuitton is a manufacturer of trunks, of cases. It really is emblematic of the craftsmanship of handmade leather goods and it's not a company whose perception must evolve year after year in light of a particular collection. There's a very clear message that must be perceived in a sense of a timeless quality that it was the case was founded in the 19th century and is set to continue. So that this message is not in any way undermined by new creations.
The new creations are there to confirm modernity but must be conferred with the timelessness, which is the very essence of an iconic brand such as Louis Vuitton. So this creativity, this innovation in 2016 will be continued. For example, in the Vuitton brand, we'll be launching a new case, a great outstanding, fully innovative from the technical standpoint. That suitcase will be launched towards the end of the year, and this suitcase will represent in itself all the know how of and craftsmanship of Louis Vuitton we'll be innovating by launching this year for the first time for many years because it existed at the turn of 20th century, a Vuitton perfume, Vuitton perfume that will be launched towards the end of the year in a number of Louis Vuitton stores, and that perfume will confer bring something new in the to the world of perfume whilst respecting the traditional know how the company will be opening this year. We'll be inaugurating a research center on perfumes at Grasse where all the expertise, all the knowledge and know how of the Vuitton perfume teams will be able to come together to express themselves through innovation and creation.
We'll also and this is important to illustrate this historical iconic aspect to have the Paris exhibition itinerate. With Michael, we'll be inaugurating Vogueue Exhibit, VV, about traveling. This exhibition will be inaugurated in Tokyo. It will be very successful in Japan and then will travel throughout the world. So innovation in many other areas in perfumes and cosmetics at DURE.
At the beginning of the year, we launched a new women's fragrance called Poison Girl. This perfume's a great hit. It's very I see that it's Sephora. It's already number 1 on the sales front, but it will complement the Sauvage success. And so the Lior brand will be number 1 in many markets as Dior is number 1 in France, in perfumes and for this iconic brand that's part of the group because you know that fashion and leather goods above LVMH but is jointly managed or at least in combination with products and image with the perfumes division.
And this brand is becoming one of the finest, greatest brands in the world. Its total revenue is expected, could well in 2016 exceed €5,000,000,000 So it really is a great business, a great brand. D'or is probably the most well known French name in the world. So this constant quest for innovation is really at the center of the concerns and values of VMH. It's very good for the youngsters who join us to contribute and witness the design creation and new products.
I won't list all the initiatives because it would take us much of the day to list them all, but just a word on an initiative that started last year and that we which we're setting great store is the digital development of the group John Rogers to be the group's Chief Digital Officer, and we will gradually be moving closer to the digital universe, be it for advertising, manufacturing, of course, selling whilst being in tune and motivated to have a unit within the group that allows us to make the best use of synergies whilst leaving the initiative, as we've always done, to the individual brands. So innovation is also this digital approach, which is, of course, present in an increasing number of companies worldwide. 2nd key value is quality, the constant quest for quality. And this quest for quality has been an ongoing concern over time for our teams and gives rise to significant investment. We inaugurated last year the Guerlain R and D and Manufacturing Center at Chartres for Cosmetics, having inaugurated the Helios Centre for Dior Perfumes at Saint Jean Braille this year, we'll be extending the manufacturing workshops of Hublot.
We'll be inaugurating a new center for Bulgari for Jewelry in Italy. We have many investments planned at on the quality front, continuing to invest in wines and spirits, cognac and champagne, a great deal of investment expended for the quest for improved quality and the quality which is the center of our concerns and constantly a key motivation for us ensuring that our products are as successful as they are. It's the qualitative attributes. I see all the tests that one can do on the products before launching. It's very impressive and we are fortunate in being able to manufacture and offer products that truly make a difference over time as compared to some of our peers.
Final point that I'd like to emphasize that really does account for the success of the group is our entrepreneurial mindset. We are continuing within the group to manage our business in a coordinated but very independent manner by preserving the entrepreneurial mindset of each of our brands to ensure that each of our brands is managed by a chief executive who is the owner or is the heir and owner as are the families which, in many cases, were at the origin of these brands that who feels personally motivated and committed to the growth of our business. And this is extremely motivating for young people. I'm often asked why this group that comprises over 60 brands is interesting because of the number of brands. Of course, number of brands is an asset.
I won't attracted to LVMH and when you're just out of university, a graduate, you obviously want to make strides. And of course, we offer far greater prospects than the competition. And so thereby, and it's one of the reasons, but also Human Resources Management. I note the present of the Head of Human Resources here that we follow that very closely. But the group attracts over 10 years now is number 1 in all the rankings in terms of attracting young graduates or universities and business schools.
But when we look at the young people who come from these schools, when we talk to them, as I have occasion to do, they're specialized in marketing. And I often say and has a joke that we don't do marketing, no marketing. Why do I say that? It's perhaps rather overstating, exaggerating things, but I know there's a considerable difference between a group such as ours and the number of groups that take perfumes and cosmetics who make products, some of which are successful but are more geared with a mass market approach. What do I mean by that?
When you launch a product, you can either call upon a designer, his ideas, do something innovative and say, well, it's a good thing. We're going to launch it without any further analysis. And that's what we do with a degree of success. We'd say before we launch the product, we'll have a market survey. We'll poll the views of people, see whether aspects of the flask, the box appeals.
That's what's done with films in the United States. They test everything to make sure that all that's factored in to arrive at the product. But in that case, and that's what I explained to the students, we generally arrive at something that's rather warded down that appeals to a certain customer base but doesn't have the characteristics such that it can be considered a high end, a high range product for marketing. Once we've decided to found the product, we decide to showcase it in stores and make it known to the greatest number of people. It's a different marketing approach, and I believe it's far more suited to our universe.
I won't dwell on that, but I would nevertheless like to state that one of the key focus areas in terms of entrepreneurship and human resources, which is professional diversity and gender equality. We have many women working in our company. Women account for 63% of managers, and this proportion is set to increase. Will increase today in the Board of Directors, but 2 new board members, female board members, are up for election. The board, just under 40% comprised of women, we expect this year to exceed the 40% mark.
So in our key objectives, I said recruit, hire young people, but also in 20 14, we launched the Institute of Excellence, and I received the 1st Apprentices at the Louis Vuitton for the ceremony, and we offer 7 training sessions in all areas of craftsmanship, jewelry, leather goods. Our ongoing concern is to attract young people, be they managers or future craftsmen and to train them and give them prospects. It's one of the key conditions to ensure the success of our group's strategy. One point that I'd also like to mention because it's taking place this year at the end of May is the 2016 special day. Most of our sites will be open to visitors.
I urge you to attend. You need to book early because there'll be a lot of people. Last time, we had over 100,000 visitors, and this year, we expect to attract even more because our companies attract as well as the Louis Vuitton Foundation. Mustn't forget that during the 1st year, we topped the 1 year 1,000,000 visitors' mark where success is continues to be impressive. Of course, the foundation is iconic, as I mentioned last year.
I won't return to it. I'd like to end by saying a word about our commitment for sustainable development, which is part and parcel of our strategy and is increasingly important and closely monitored and followed by our teams.
Because you see, in our products, we use very unusual, as it were, raw materials was the case for Loro Piana and it is for us to maintain this capital. We are world leaders in many, many areas. And what it is we want to do is to be exemplary in this respect. And so and we've done we did that some time ago. We created Life.
Life is LVMH initiative for the environment and that basically guides our entire environment approach. And in 2015, we became partners of COP21. COP21, as you know, brought together a number of people, but that was an opportunity for us to make our own contribution to the greenhouse gas situation. And so for instance, in our stores, we use less energy for lighting, in particular. We have new techniques that enable us to reduce our consumption and therefore our carbon footprint.
We also have a new power system both in France and in China. Guerlain and Sephora were the ones who started it. We have a fleet of electric vehicles for Mwet and C. As much as 80% of traffic is done using that and also ship as opposed to other forms of energy consuming modes of transport. And there are a number of other decisions which were announced on the occasion of COP21 in Borge.
Another exemplary innovation is the carbon front. Group wide, our stores are, of course, the main emitter of greenhouse gases and so to achieve yet another milestone in the effort. It's been 20 years now we've started this initiative for the environment. Well, we have a price for the ton of CO2. So whatever a company emits a ton worth of CO2, it contributes to the fund to the tune of €15, and that is the our own contribution to the fight against climate change.
And so we have to see that our financial performance is a consequence of our strategy and not our objective. Our objective, and I should like to emphasize this, our objective long term objective is the position of our brand in 15 years down the road to make sure that our brands remain ahead of the game and that our group should remain a global leader, a world leader in its industry. That is our objective and we certainly are sticking to that. Looking to the future, well, 2016, we'll see what 2016 brings. It's pretty difficult to be too precise in our forecast, but we do have a number of innovations and initiatives in the pipeline and that makes me pretty confident about 2016.
And of course, there are a number of political geopolitical uncertainties and recent tragic developments in France certainly are not reassuring, but we can only hope that the situation will improve. In any case, these are the objectives. The basic message is we try and do better in 2016 than we did in 2015. I will now give the floor to our auditors.
Ladies and gentlemen, good morning. I'm pleased this year to present on behalf of the statutory auditors the reports that we've published for your attention. All these reports were made available to you by the company and are also to be found in the shareholders' document that you received upon entry to this whole. I therefore suggest that I don't read those in full, but just restrict my comments to the reports pertaining to resolutions that are put to your vote today. The reports concern 5 in number 2, concern the financial statements: 1, the regulated related party agreements and commitments and to on the capital transaction, starting with the annual and consolidated financial statements that you'll find on Pages 216, 217 and 190 of the document, we took into account the characteristics and specificities of your group in terms of business organization, accounting rules and internal control.
This work has given rise to detailed summaries submitted to your management team, to your audit committee and your Board of Directors. Lastly, our report on the consolidated financial statements is based on work undertaken by the statutory auditors in close to 30 52 entities of the group in 13 countries. In conclusion, we certified the financial statements and parent company financial statements without reservation. We also issued a report on regulated party agreements and commitments to be found on Pages 218 to 220 that describe the agreements between your company and its directors and officers or between your company and companies that have shared directors, the new that have given rise to authorization by your committee, the Urban Assistance contract with Diavolessa, an amendment to the assistance agreement with Groupe Arnault, the renewal of the service agreements amending the duration of service provision agreements with AA Conseil. Furthermore, the other agreements and commitments authorized in prior years and which remain current during 2015 also presented in our 2 special reports concerning resolutions that might affect in the future your company share capital.
These reports are to be found on Pages 267, 268 of the shareholders document. These operations should decrease share capital and the granting of existing bonus shares or bonus shares to be issued to employees and senior executive officers. Our reports prompt no comments or particular observations of these transactions which comply with the conditions provided by the French commercial Code. Thank you for your attention.
All right, ladies and gentlemen. And now, we are available to take your questions and I will invite members of the executive committee to join us up on stage. All right, ladies and gentlemen. If you have any questions, be kind enough to introduce yourselves before putting your question. I see number 5 has raised their number.
Good morning, sir. My name is De Solange. I represent APAI, which is the French Association For Individual Investors. I would like to commend you for inviting individual shareholders to visit emblematic sites of the group. I believe that you also lined up for the VIVATEK organization.
What are your expectations of that partnership? And I have a couple of additional questions as part of new technologies. Have you started a machine learning program or the sort of robotic system that can sort of read customers' emotions? And then finally, what are your concerns about cybersecurity in your supply chain methods? Have you taken that into account?
And finally, regarding digital technologies, what difference will this make to customers' relations to luxury? Do you believe that big data or data in general can be used in the luxury industry? Regarding governance, I believe that you have 3 sensors on your Board of Directors. Maybe you could have a humanoid robot in their stead. Well, Vivatech is an initiative that was taken by Leseco and Publicis.
The idea was to bring to Paris a number of Internet startup companies. And as part of our partnership with that, a number of such startups and indeed because we wanted to develop that business in France because after all this will be critical to France's economic development over and beyond that initiative, which was that of Les Decaux and that was that started some years ago, but Liseko, as you know, is now part of our consortium. LVMH decided to support that initiative and so therefore, we will be involved in organizing contacts, in helping start ups make their arrangements with the authorities for legal and other formalities etcetera. So that's what we're doing. Regarding digital technologies in LVMH, well for the time being, we're not going to replace sales girls by robots.
I believe our customers might be somewhat disappointed. And needless to say, human contact is quintessential to display and show our products to our customers, to convince our customers and ensure that our products are well accepted. Having said that, the digital technologies are everywhere and the digital part well, there is a digital technology dimension to our stores and this is very useful indeed. Chris can say a few words about that regarding Sephora stores. What we are trying to do is use digital technologies to be as flexible as possible.
So when a customer finds an item on the web, they can either order it online, have it delivered by post or pick it up at the store. And that's what digital technologies enable you to do. Conversely, customers can go to a local Zephyrus store, they can find a product that they like, but because it may be out of stock at the shop, the customer can then order it online. And then by the same token, the customer can be informed of new developments regarding the types of products they are interested in. So the digital technologies offer all sorts of exciting potential without in any way damaging the appeal of our products, unlike some of the web players, some companies say, right, well, you go to the web and you get a discount.
That's not the concept at all. For us, we're simply providing an additional service to our customers so as to make the entire experience more user friendly and more congenial. That's what the Internet and digital technologies are all about. I could get into more technical detail, but I don't believe this is the purpose of this is the time for that. But question number 6.
Sir, my name is Jean Lacroix. I'm an individual shareholder and I come every year to listen to your presentation. Every year, it's a brilliant presentation. On the right hand side, you have a connected watch. I myself, I'm not really connected, but can you tell us more about the advantages of these disconnected timepiece?
Well, the whole purpose of that timepiece, well, it's say a wrist bound extension of your phone. You may not have a phone, so in that case, it will be more difficult for me to explain what you can do with this watch. But put it this way, on your cell phone, you receive all sorts of information on the website from the Internet, but maybe by phone as well using the telephone network, all sorts of information about the weather or indeed the stock exchange. And for me, it's important, but it's true that while having not seeing the share price go down might spoil my appetite, but conversely, if it goes up, it might boost my spirits. In any case, I usually get that information using my mobile phone, but now you can do it on your wristwatch, which is much more discrete.
And indeed, on the TAG Heuer watch, not only can you watch the information, but you record thousands of hours of music and have them on your wristwatch. And if you go running, which some of us do, without even using a phone, you could have a Bluetooth earpiece connected to your watch, your wristwatch. So you get the music, but the same watch can measure the number of steps you've made during the day, your cardiac output and all sorts of things. Of course, you have to recharge the battery of that watch. That's the only drawback.
But the new version will be better because it will be more autonomous. It will be able to do all sorts of additional things. Other questions? Yes. Number 1.
Good morning. My name is Charlotte Rouget and I represent the French Association of Women Lawyers. You introduced a number of initiatives for gender parity in the organization. Of course, gender equality, gender parity is good for the health of the company, but you have specific objectives. I mean, are you looking also Well, I'll give the floor to my colleague who started all this business.
Yes, as Mr. Arnaud was saying, we do have a number of objectives. We would like to have 40% of women on our main committees that are the basically the governing committees of the organization, we've made good progress. We started the initiative with the LVMH, and we've made major headway in Asia, in Europe, in France here. And now we came from 24% to 30 8%.
We hadn't quite reached the 40% mark, but and of course, our ambition is to go beyond that and arrive at actual parity to have a fifty-fifty partnership with that is a membership of the board between men and women and recruiting talent now we are having more women than men. Indeed 78% of people recruited last year were in fact women. So we are really looking to better and better performances in this respect. Thank you very much for the questions. Number 5, not any questions today.
So your presentation was brilliant. And of course, the astounding successes that we're all to see. So we can only commend you. So the only comments I have to make are rather trivial. But number 1, regarding women on the board, there's only 1 woman on stage out of 9.
So that's not even 11%. That is not exactly in line with the high percentages, percentage of women you would like to have on your steering bodies on the then we heard beautiful pieces of piano being played. Who played the piano, may we ask? I'm not the one playing the piano. I couldn't do as well.
I suggested Scarlatti. We ended up with Chopin. These are the mysteries of the mysterious ways in which such a big organization has as ours seems to work. Chantal, would you I wouldn't say that I'm worth more than one person here, but again, we do keep that objective in mind and we have indicated that lead us to believe that the situation will improve over the U. S.
All right. Thank you very much. Number 6. Good morning, sir. My name is I represent Edmond de Rothschild and I had a question regarding related party agreements.
What is the assistance agreement with the Groupe Arnaud? And Econsai 1 is worth €5,600,000 and the other 1, €420 1,000 That's just a question about these related parties. And regarding Ernst and Young, what are the consultancy fees for Ernst and Young? Well, maybe Bernard Kuhn may wish to take these questions. He is the one in charge of these matters.
Right. Related party agreements, that is relations with Groupe Arnoux and AA Conseil and LVMH. Groupe Arnoux has a number of experts in a number of fields, legal, financial, property. And these experts work for LVMH and that's why we have this related party agreement. AECONSE is a company that has provided a number of services including to organize the journee particuliere days and that related party agreement came to an end a few months ago.
Regarding Ernst and Young, the information is in the registration document. The audit and certification services provided by Ernst and Young cost us in the vicinity of €12,000,000 Other questions? Number 9. My name is Albertini. I'm an individual shareholder.
Sir, I would like to thank you in a double capacity first because you have done a standard job running this company And I speak to you not just as a leader of this company, but indeed all the staff and employees of this organization from the Board of Directors all the way down to the workshops or indeed the seamstresses and the skilled technicians in the jewelry and timepieces department. I'm impressed with your services, but I do not sell LVMH products, but I buy the products and I bought some articles, rather I bought some shares last year and we were looking at the price share anywhere between €140,000,000 €160 per share. But of course, the dividend has gone up even 10 percent last year, and we are grateful for that. But that payout is under 3% compared to the nominal value, indeed the price of the shares. So the suggestion I have, I mean, of course, the Anno family owns 45% of the capital, but more than 50% of the voting rights.
Of course, that proposal can only succeed if you yourself vote for it. But this is the proposal. You have a number of large companies in CAC Caronde, which propose to improve shareholder loyalty by granting a bonus dividend of about 10% or sometimes 1 free share for 10 or 15 shares held, would such would you entertain such a possibility? Sir, I thank you for being such a long standing shareholder. But last year, there was an exceptional dividend because that was well beyond any kind of expectations because there was an exceptional payout due to the disposal of the Hermes shares.
I mean, for a long standing shareholder such as you, that covers several years of payouts. I do we do believe in increasing dividends. And of course, I'm being a shareholder myself, have no objections to that, but we have to keep money to enable the group to invest in its various businesses. For instance, so in America, you have some Internet companies that have not paid any dividends at all to their shareholders and yet their share prices have skyrocketed. So plus you have to recognize that the payout rate is way above anything you can get in the bank and sometimes even some of the interest by the bank is negative.
So it's still a pretty good investment. Question number 3. Good morning, sir. And ladies and gentlemen, congratulations once again on this outstanding performance. I'd like to know more about Louis Vuitton stores in China.
I read that some shops were closed. There will be Chinese tourists coming to France and Europe to purchase Louis Vuitton that are less expensive in that are less expensive in France than in China because of the taxes. What is your strategy in China? And then last question, could you tell us about this connected price? Everybody wants to have such a wristwatch.
How much does it cost? The worth is about worth €1500 Regarding Vuitton in China, Michael, could you say something about that? 3 years ago with Mr. Arnaud, we felt that the Chinese market was going through, upheavals in particular because of the currency effect and some of our competitors did the same as us. A few years ago, we decided to reduce the number of new stores in China.
And indeed, instead of opening new stores, we've enlarged existing stones, but we haven't opened as many new stores and indeed there are some in some cities, some shops were actually closed. You're right. Right. Well, having said that, the Chinese market, as it stands today, seen from the outside world, has generated some unwarranted comments. And I think one tends to underestimate the potential of the Chinese markets and the indicators.
Chinese growth stands at about 6%. Consumption is on the up and the economy is driven in a rather precise way. So of course, the markets are different in China because it's only recently that the Chinese market opened up well, the China opened up to the financial markets. But I'm still fairly confident over the medium term on the Chinese economic development. Indeed, there will be 2 major drivers for the global economy, the U.
S. And China. That's at least my opinion, but I still think that this has pretty much governed our decisions regarding China. Question number 6.
Yes. Good morning. I'm an individual shareholder. Could you make say a brief word about your share price? The volatility is quite considerable even the performance is excellent.
We've gone from over 160 down to 1 30 these past few weeks. Thank you. Well, the share price can't be controlled. It's based on supply and demand. It's market driven.
I note that since the start of the year, we're one of the few stocks to be up. On the CAC 40 Paris Index, of course, we can always do better, but stock market is an indicator. You have to view it over the long term. You can't take a short term view. It depends on so many factors that are unpredictable and generally short lived.
It's very difficult to take a short term view if you look over the long term. I have here the figures. I mean, it's really very good as, indeed the shareholder who bought his shares 20 years ago indicated. Next question. Good morning, sir.
I still have 3 questions to put to you. First question, relations with Hermes have calmed. What's happened to the Hermes shares? Are you staying in the group? I mean, are they going to be sold?
I'd like to know, with regards to La Samaritaine, could you say a word about La Samaritaine? Because for years, I mean, it's a never ending, saga. And on the performance shares, the bonus shares, I mean, how many people benefit from these bonus performance shares and how are they allocated? Sorry, I was worried. I didn't see you.
I thought maybe you weren't attending the meeting.
Hermes. Hermes. Hermes. Well, simple.
LVMH no longer has any Hermes. I mean, we've given them to you. We've distributed them now. Did the shareholders keep them or sell them? That's their problem.
But I mean, it's of no longer any concern to us. As la Saint Martin, thanks to the wisdom of the Council of State, we're able to start the work. The project's underway. It's set to end at the end of 2015 2018. And then on the Seine River, you'll have a fine hotel.
And at the rear, there'll be a shopping center and offices. All that will liven up the district, which, I mean, given the cumbersome nature of authorizations in France. I mean, La Samaritaine was shut down over 10 years ago. It took us 10 years to secure the necessary green lights to build a Samaritan. We'll be able to employ several 1,000 people.
We've managed to get there. It's like for building the foundation, it also took 10 years for identical reasons of exaggerated red tape and appeals launched by associations. And The objective was possibly questionable. That's another matter. And the final point was maybe you could tell us about the bonus shares.
The number of beneficiaries of the bonus shares in group oscillates between 750,780. These are performance shares linked to the group's performance with number of indicators and awarded to employees who are doing a great job, whom we wish to retain, who offer great potential for the future. Next question. Good morning, sir. Melkior, young individual shareholder.
I'd like to share your view on the film, Merci Patron. Thank you. Well, difficult to give you my view on the film because I haven't seen it. But what I can say is that for many years, indeed some 20 years, where the subject of criticism of extreme leftist groups of all sorts is rather surprising. If I answer ask myself the question, why are we the subject of such criticism?
I think the answer is fairly straightforward. LVMH Group is the illustration, the embodiment of these for what the extreme leftist elements, the free market economy at its produces at its worst. We have all the flaws. We're a CAC, CAC 40 company. That's a minus point and then good results.
That makes our situation even worse in their mind. And thirdly, we're hiring employees. I mean, that's terrible in France to boot. And long term. I'm informed that since I came to the head of this group, we were 20,000.
Now we're 120,000. That's all very bad. And we're the illustration of the benefits of globalization for France, and that's an outright catastrophe in their view. So we represent the counter example for these small extreme left wing organizations that if they can't do away with us, criticize us constantly. That's why we're the subject of that sort of criticism, and it's been the case for 20 years.
I mean, there's that. There have been other things in the past, and it goes on. It's no doubt conveyed and propagated by Leftist press that seeing the failure of the traditional economic policy of the Left and that the government is rightly moving to a more free market approach, is opting for that approach with this movement because they can't be contradicted by the reality because the probability of their coming to power is pretty limited. That's what I think of that matter. I can't really say anymore, but we're used to that sort of criticism.
Any further questions? We'll take the last two questions over there. Yes. Good morning, Mr. Chairman.
I'm also an individual chair. I'd like to ask for clarification regarding this center in Grasse. How has it been received by the perfumers, by the perfume industry? Is it prompting fears, eliciting interest? Well, obviously, it's prompting a lot of local interest.
I can testify to that necessarily. It does prompt some fears on the part of the competition, but it's really an iconic center where we'll be able to express all the perfume creative designs and know how closer to where the flowers are grown in the grass region. And this is combined this year with the wonderful inauguration. In fact, I invite shareholders who are in the area during the summer to go and visit it. The inauguration of Christian Dior's house that Christian Dior perfumes acquired near Grasse, some 25 kilometers, the Colle Noire, which is was the summer house of Mr.
Dior that we have refurbished and renovated. It will be a great occasion because we'll find there a whole set of personal items, objects, photographs, furniture items that belong to Mr. Dior that will be exhibited in the summer home of Mr. Dior when he was at the head of Christian Dior. So a few initiatives in the Grasse area that will be successful.
Final question. Mr. Chairman, also individual shareholder for some 30 years or 25 years. My question is could you let us know what your plans for the franc efise store? Franc efise will be transformed.
Franc efise is a store that belonged to the group for many years, Mr. Wagner, who heads up Le Bon Marche, who set up La Grand Episcry at the Bon Marche that you no doubt now has decided with my agreement with Tony's agreement to transform the store, rather old fashioned that requires renovation to transform it into a Grand Epicerie in the 16th district. So we'll be transforming Franc Epicer into a Grand Epicer. Well, how long will that take?
We'll
shut down the store in July. We'll refurbish it, renovate it for about a year. We'll open up in 2017. Ladies and gentlemen, thank you. We now will vote on the resolutions.
So the quorum has been reached. We now vote on the resolution, starting with the Resolution number 1, approval of the parent company financial statements. Approved resolution number 2, approval of the 2015 consolidated financial statements. Please vote. Approve resolution number 3, approval of related party agreements.
Please vote. Approve resolution number 4, the dividend. Please vote. Approved Resolution 5, renewal of my appointment as Rector. I don't know if I can vote.
I don't think so. Thank you. Renewal of the appointment of Madame Bernadette Chirac. Approve. Approved.
Well done. Renewal Resolution 7, Appointment of Mr. Charles de Croix. Please vote. Approved.
Congratulations here. Before we put this to the vote, I'd like to show you a film introducing Madame Clara Guillemin. I worked at the Economics Ministry and the French Agency For International Investments that I shared in 2006. I crossed the river, and I became CEO of the French subsidiary of GEA. Recently, in February of this year, I joined Raised at a company that I co founded, which is an investment company where major companies invest in medium sized companies, and we give 50% of what we make to the Foundation for Young Entrepreneur.
And I also chair the Women's Fund. Great sense of pride, 1st and foremost, to join an iconic company, both of French know how, French elegance, but above all of this French je neu sequoie that constitutes its genius throughout the world, a company that has global renown of embodies this excellence, and I'd just like to state an anecdote. When we founded the French brand, we were polling the foreigners why they were wearing the Louis Vuitton brand. And one of them fine formulation because it elevates us. I'm very pleased and very proud to join the Board of Directors of LVMH.
I hope I can bring my international skills, my knowledge of a global American company that has allowed me to discover, to travel and to meet with many key individuals in most of the countries where VMH is present and also possibly, since I'm not a specialist of the luxury sector, a different perspective. Please vote. Congratulations and welcome. Now for Madame Natasha Valin, our second Board member, up for appointment today.
Well, I grew up in Asia and in Africa, and I started my career at the European Central Bank when the euro was introduced at the beginning of the millennium. Then I started working for Goldman Sachs, the investment bank that is, of course, present around the world. So I helped investors make their decisions, but also have some overall view of the economy. I had SIPIQ, which is a think international think tank looking at international monetary situations. The research we conducted at CEP is intended for economic decision makers on the national or European scale, but also intended for the general public because we have to conduct rigorous analysis, provide new ideas, but make sure that whenever there's a discussion, it should be made in clear and understandable terms.
For me, joining LVMH means joining a big adventure. This is a prestigious organization, a leader, if not the leader, in the luxury industry, synonymous with excellence. The other reason I'm delighted to join LVMH is that this enables me to carry this model of French excellence up to the international stage. And that means that you can both keep the unique value of French excellence that are having it radiate around the world. My own contribution to the Board of Directors is expertise on the world economy.
I have been exposed to different aspects of the economy, the monetary economy, but also a better understanding in a way in which countries interact with one another. I can also bring being a woman, there is some gender diversity, but I also have different ways of looking at different cultures and different economies. And that, I believe, is, I hope, a positive contribution. All right. Well, you can vote now.
Congratulations and welcome. Resolution 11, appointing the appointment of Ernst and Young as a statutory auditor. Approved Resolution No. 12, appointment of Mazard as a second statutory auditor. You can vote
now.
Approved Resolution number 13, Appointment of Philippe Castagnac as the Deputy Auditor. Approve Resolution 14, renewal of the mandate of Ulitex as an alternate auditor. Approved Resolution No. 15. This is the compensation starting with my own.
You can start voting now. Am I allowed to vote? Approved Resolution 16. Same question for Mr. Bologna.
Approved Resolution 17, the authorization to be granted to the Board of Directors to trade in the company's shares. Approved Resolution 18, authorization to reduce the share capital. Approved Resolution 19, that's the granting of 3 shares, bonus shares. Approved Resolution 20 extension of the company's terms of existence. That's a change in the bylaws.
Approved. Well, there you have it. Thank you for your attention, and we're happy to invite you to refreshments in the room next door.