Ladies and gentlemen, I'd like to welcome you to your shareholders meeting in order to review the accounts for the year 2012. Let me remind you that the agenda is as follows. We have all the legal documents required to hold this meeting that have been made available on the desk. We will review all the financial statements for 2012, the outlook for 2013. I'll say a few words about that before answering the questions from our shareholders. Jean Goujon, represented by Mr. Pierre Godé, will be appointed as directors and as tellers. I propose that we appoint Mr. Bernard Kuhn, who is group legal counsel. We have the quorum. The meeting can validly proceed with its deliberations. The detailed agenda is to be found in the documents you have received.
Before giving the floor to Jean-Jacques Guiony, who will set out in greater detail all the figures for the year, let's see a short film that we have prepared to present the Special Days. This is an event that we organized for the group LVMH in 2011, which was very successful because over a weekend, over 100,000 people visited a number of the group's premises opened especially on that occasion. We're repeating this event this year, 15th and 16th of June. Shareholders are naturally cordially invited to attend that event by further premises of the group, 40 throughout France, in Paris, and in the Bordeaux region. All regions where we are present, but also abroad, the U.K., Italy, Spain. All the details can be supplied. This is just a brief presentational film on that event. You're all invited to take part.
Now I'd like to give the floor to Jean-Jacques Guiony for the 2012 financials.
Bonjour, ladies and gentlemen. Good morning. Let me give you a few figures for 2012. Let's start with the sales. We can see that sales have grown to EUR 28 billion in 2012. This is significant. 19%, including 9% in organic growth, 3% in scope because of the acquisition of Bulgari Île de Beauté. Even though this happened in 2011, the scope effect took effect last year in 2012. There's also a foreign exchange effect, 7%, which needs to be emphasized. All in all, 19% increase in revenue. If we look at the first quarter 2013 on the like-for-like basis, we can see that organic growth is 7%, which is similar to what we had last year for the year as a whole, which is in line with the organic growth of the second half of 2012.
We did not note any scope effect in 2013, the exchange effect is slightly negative to minus 1%. Dollar is stabilized, the Yen degraded sharply. Regarding sales, we can see this distribution hasn't changed, doesn't change much from year to year. You can see that Asia accounts for 28% of our overall revenue, up 2% compared to the previous year. France and Japan had to suffer from this increase in Asia of 2%. If we look at the sales on a regional basis, of course, we're an international group. Only 10% of our revenue is generated in France. Let's look at the various regions of the world. United States, a significant growth, 12% in sales. Not much change at the end of the year, sustained business throughout the year. Japan was a mixed figure.
We had, of course, compared to 2011, which had the dramatic events of 2011. The first half was significantly better, the second half not so good. Japan was seen to be as a sick man of the luxury market, still we find that business was up 6% in Japan. Not bad at all. Asia as a whole, 10%. Without Japan, 10%, that is a sustainable source of growth. Europe still up 7%, in line with what we had in 2011, a perfectly acceptable performance. A fairly homogeneous and favorable picture throughout the world. If we look at the various lines of business, let's look at the picture on the right-hand side, organic growth. We have two businesses that stand out, wines and spirits, and DFS. Retail, selective retail, 14%, and wines and spirits, 11%.
If we look at the income statement per se, that is how we have performed. Well, if we see the overall picture, we can see that the gross margin up 17% as a percentage of sales. Well, we had a scope effect, other factors that mean that they're not quite as high as last year. Selling expenses seem awfully high, that's because of the foreign exchange effect. If you take that out, it's only 11% and not 21%. 10% for A&P, 11% for selling expenses. Likewise, overheads, general SG&A, I beg your pardon, only 11% up, that also includes a foreign exchange effect. The other charges and expenses, there's a slightly negative, that includes both tangibles and intangibles. The profits from recurring operations, well, we have to remember that we had an one-off income, which is due to our 22% stake in Hermès.
That improved our financial result. The income tax, 32%, slightly higher than last year because of the deferred tax credit that we had last year. We have some minority interest, Moët Hennessy and DFS, all in all, the net profit up 12% compared to last year. If you look at the profits from recurring operations, the main indicator, up 13% compared to last year. Per line of business, we need not go through the entire figures, they're all very good. Except for fashion and leather, all the lines of business have enjoyed double-digit growth. Regarding fashion and leather goods, it's because of specific capital expenditure. In spite of it all, we have a very healthy growth nonetheless. Now, the financial structure is very sound. You can see that equity accounts for about half our liabilities.
That means that we have a strong financial structure, which means that we're in a position to invest in our workshops, in our stocks, and in other operations that enable us to allow for growth. If you look at the net debt and the cash flow picture, you have it here. The net debt at the end of 2012 stood at EUR 4.261 billion, down about EUR 400 million compared to 2011 because the free cash flow on the right-hand side, EUR 2.474 billion, up almost 14% compared to 2011. The EUR 2.474 billion was pretty much used by dividends and some small acquisitions, including the 20% stake in Benefit that we acquired in 2012. All in all, we were able to bring debt down by about EUR 400 million.
You can still see that the debt-to-equity ratio, which is, of course, the standard measurement of the debt ratio, stands at 17%, a very good ratio indeed. The dividend we are offering is EUR 2.90 per share. There was a first settlement of EUR 1.1 paid out in December. The balance is EUR 1.8, up 12% compared to last year. Over five years, as you have on the screen, the dividend has grown 13%. This is annually, 13% annually, which is pretty good, especially if you take, well, you have two years of recession in the intervening period. Let me complete this overall presentation with the share price compared to CAC 40, the picture speaks for itself. CAC 40 was stagnated, was slightly down, whereas our own share price was up 67% over that period. Thank you.
Ladies and gentlemen, as is customary for a number of years now, we will have polled our shareholders, several thousand shareholders, asking them what they view as the most appropriate questions to address today. Before giving you a brief presentation on the results and the outlook of the group and its strategy, I'd like to show you some of these questions summarized in this short video clip. I won't return, if only briefly, to the results of 2012 presented by Jean-Jacques Guiony, just to say that the increase of our activities continued, that our operating profit is now close to EUR 6 billion, and that thanks to our outstanding brands, we are gaining market share in all parts of the world where we are present. Of course, we are influenced by the general economic climate.
In 2012, this may seem somewhat paradoxical to you because we're in Paris, Europe at the present time is not in a hugely buoyant economic situation. The world is posting sound growth, that's continuing into 2013. All the developing countries or emerging countries, as we say, as well as a number of countries in traditional Western areas. What is actually striking for 2013 is that this global growth trend is expected to continue at around 3% across the world. In developed countries, we are witnessing 2 types of growth. Europe, on the one hand, which unfortunately is expected to slow this year with the relevant impact on economic consequences. Other countries, including the U.S., expected to grow by some 2%, where we have strong presence. There are a number of signs that confirm that general trend in terms of our activities.
You ask us about our strategy, how against such a backdrop, how can we adapt our strategy? What strategy should we follow in order to ensure that the group continues to grow, to expand, to be successful and increase market share? What's key to realize, and at the risk of repeating myself, because we defined this strategy with members of the company some years back, and we're trying to follow it consistency. This strategy is based on two key aspects. Firstly, in your group, we are aiming for the long term. The short-term results are interesting, of course, something that needs to be taken into account.
The teams in the group are, of course, highly focused on the results of the quarter of the year, and many employees of the group are attending today's meeting because in the group, we have a great many shareholders, thanks to the share plan that was made available to a number of employees in the company. Results are a key component of what is followed in the way our businesses are run. What's essential is the long-term position of the group and its brands. What I'm interested in and what is of interest to the managers who are here is how the Dior brand, the Bulgari, the Louis Vuitton brands will look in 15 years' time, and not so much what they will look like in six months' time.
I often explain that in in-house meetings, the financial results that are quite remarkable, well, that financial result must in fact be a consequence of our strategy aimed at building our brands. It must not be the sole driver in motivating our teams. That really is one of the reasons for the success of our strategy. We want our businesses, our brands, to be developed by all their teams, all their management teams, but as well as by all the employees who would take part as family companies whose very soul is the brand. Like these companies, for the most part, are companies that were founded by families. These companies must preserve the same essence, the same mindset, and that's one of the key success drivers. The other important factor is continuity.
Continuity in this strategy, but also continuity in the teams that we have put in place, and in some case, many years ago. We've all been working together for a number of years now, which deliver this long-term strategy across our brands. I see here in the front row, many members of the executive committee and also in the other rows, employees who sit on the management committees in many of our companies. On behalf of all shareholders, I'd like to thank them and congratulate them, because it's thanks to them that we've achieved this performance in 2012, and I believe we will continue in 2013 to achieve these impressive results. You'll have the opportunity of seeing later on, you'll see all the members of the executive committee who will join me in answering your questions.
If we now go into further detail at the various strategies of the various business areas. Let's start with wines and spirits. LVMH is LVMH Moët Hennessy Louis Vuitton. We have about 60 brands, but there are two pillars, Moët Hennessy and Louis Vuitton. These are the two founding, defining brands to which we have added other items of varying size that are indeed growing. If we start with wines and spirits, that's an activity that enjoyed tremendous success in 2012. That success is both based on the quality of the products, but also on the entrepreneurship that is present in that company that has led to strong market share gains, be it in the U.S. or in emerging markets. We can underscore that the finest products, the most iconic, as well as the most expensive, are those which have increased the most.
Dom Pérignon in particular. Dom Pérignon invented champagne back in the days of Louis XIV, and we launched two vintages last year, the 2003 and the Rosé 2001, which enjoyed considerable success. Mr. Navarre, who's here, has great difficulty in meeting demand. It's a great business, wines and spirits, because at the end of it, you'll see that there is innovation. There's a fair amount of innovation, the products are products of the soil, and these are products on which currently, in a number of countries of the world, demand outstrips supply. If figures are growing well, they could grow even faster if we had the grapes, the wine, cognac, in order to meet that demand. Other area of activity that held up very well in 2012, in particular, perfumes and cosmetics. We enjoyed a very good year with perfumes and cosmetics.
A very good year in particular with Christian Dior, the iconic perfumes grew substantially. It's interesting, for the fourth year in succession, the perfume J'adore is number one in France, as well as number one in a number of other countries, and now it's one of the most widely sold perfumes worldwide. Christian Dior has developed its perfumes considerably and also developed very successfully its makeup range and skincare products. More about that in a moment. In the watches and jewelry, there again, business developed very well thanks to the team that joined the group a few years ago, headed by Francesco Trapani.
Francesco hasn't been with us for very long, only two years, I've known him for a very long time, we in fact tried to sign a transaction with him a while back, in fact it was sealed two years ago. Our watches and jewelry business enjoyed considerable success in 2012, I'll explain how we plan to continue that trend into 2013. Selective retailing, very strong growth of our companies, DFS, which in 2012 delivered excellent performance thanks to the increase in the number of Chinese tourists. That's an interesting development given the rise in living standards in China, given the propensity of Chinese visitors to travel more widely. I believe the future of the company is very promising.
What's more, in 2012, they were able to establish new premises in Hong Kong Airport, which is one of the most widely visited and one of the most dynamic airports in the world today. In selective retailing, there is Sephora. Of course, Sephora, a very dynamic company, far and away a market leader in the selective retailing of perfume, thanks to the efforts put in by the team. Christophe de Lapuente joined us not so long ago, but he is now fully Sephora-ized, as it were, and is spending all his time in the stores, and I very often come across him offering a perfume to be tested by a customer. We are here in a business that offers great potential. I saw one of our Chinese partners yesterday who said, "Well, Sephora, you can increase tenfold your activities in China very swiftly." Perhaps we won't do that.
It would require too much investment, but it would mean finding a lot of employees, and in countries that expand very swiftly, it is not always easy. Let me just end this brief presentation with this. Well, Sephora strategy is well-rehearsed. It is innovation, more about that, and service. Sephora made it possible to deliver to a number of markets, new brands that were small to begin with, but attract customers that cannot find those brands elsewhere. The result is that Sephora, it is probably better to buy a perfume or a cream, a skincare cream at Sephora than in a large department store. You get better service at Sephora. Before coming to the final pillar, I started with the first pillar, and I will end on the second pillar, the arc that supports the group. Fashion and leather goods.
Before discussing Vuitton, let us discuss some of the smaller brands, but nevertheless, posting high growth. Since we have managed this with Pierre-Yves Roussel, here again, we have experienced quite a remarkable development. I will just take one example. It would take too long to go through all the brands, but if we just focus perhaps on the most spectacular example, which is Celine. Celine, it is a longstanding brand, but that was perhaps not asleep, but it was not, shall we say, on the radar screen of the most cutting-edge brands with the greatest potential. Just over five years ago, we relaunched this company with the arrival of Phoebe Philo. We have totally changed the positioning of this brand, which is now viewed across the range of fashion brands as one of the cutting-edge brands. That is not enough because sometimes brands are too cutting-edge and there are no customers.
This is both a cutting-edge brand but is of considerable interest to women, and we see a greater number of women who buy these clothes. I see Delphine, who works at Dior, and Toledano, who says, "Well, she is wearing Celine clothes. What is happening?" Since there is a new designer at Dior, that has changed somewhat. Young women these days buy their clothes at Celine and acquire and buy their leather goods, and we are building on this global brand, on this network to develop this business, and here it is difficult to meet demand. Turning now to Vuitton. Vuitton, which is a tremendous company. We published the sales figures for the first quarter, which we see that the group is in great shape. Growth in all our business areas of the order of 7%. Wines and spirits continue to post strong growth rates. Watches and jewelry doing very well.
Just an example, at Bulgari today, we have growth in Bulgari stores close on 20%. Why is the headline Bulgari figure not as exciting as we might have expected? Because we've decided to reduce wholesaling and to promote selling in our own stores to really focus on offering the goods in our own stores so that customers can enjoy better service in our stores, rather than some other retailer where we don't have full control over the way in which our products are presented. Perfumes and cosmetics are doing very well since the start of the year. Won't mention selective retailing, where growth rates are close to 20%, doing very well. A question I'd like to preempt here is that why leather fashion and leather goods only posting 3%, whereas generally we're 10% or even higher?
I'll answer you very simply by saying that it's the result of a deliberate strategy. What is happening? What is our objective? I said earlier that we wish to favor, and I always repeat this when we hold brand meetings and on Vuitton in particular, what I'm interested in is what will be the position of Vuitton in 15 years' time. Vuitton is today the world's leading luxury brand. What I'm interested in is that it should remain so and that it should increase its lead over the longer term, that its image should be further burnished, and that the quality of its products be maintained at that level. At Vuitton, we have a very considerable side, and we have very outstanding products. It's the monogram product at Vuitton. Everyone knows the monogram from Vuitton, and it's an extraordinary product as compared to its peers.
It's a bit like Château d'Yquem compared to the other Sauternes wines. Of course, it's a Sauternes, but there's no comparison possible. It's the same for the Vuitton monogram. What is the problem? The problem is the following. The problem is that we wish to demonstrate to what extent the offering of Ready-to-Wear is diversified because Vuitton is, of course, this outstanding product, but it's also many other things too. Many other leather goods and products of outstanding quality. I can say to all our shareholders here that the quality of Louis Vuitton leather goods is without a doubt the finest in the world. There may be other brands, other products of excellent quality, but Vuitton is the finest in the world, and we wish to demonstrate that. We wish to show that to our customers.
In order to do that, given that in the image that our customers have of Vuitton, the brand is inevitably linked to this amazing monogram canvas. We decided with Michael Burke, who's also displaying continuity because he's been at my side for 30 years and took over from Yves Carcelle, who had expanded the Vuitton business for over 20 years and is now holding another position in the group. We decided to show to our customers all the products, and the result is outstanding because when you enter a Vuitton store, you see not just this outstanding canvas, but you see all the other Vuitton products. What's the result? The result of leather goods have increased their sales spectacularly, and it's difficult for us to keep pace and to deliver because manufacturing these products takes a very long time.
We've hired craftsmen and craftswomen to produce these goods, and it takes a while. The second difficulty is that we don't wish to expand to grow too far. We'll even slow the pace of store openings. These two factors combined explain why the growth figure shown here is very encouraging to my mind. It's not a sign that it attests to Vuitton being less appealing, but it's the deliberate result of a strategy that I, in fact, discussed with the analysts when we presented the results at the start of the year. It's the result of a deliberate strategy and the fact that sales figures are growing. I'll say that perhaps at the risk of shocking a number of analysts or investors, but that's not the problem.
The problem for Louis Vuitton is to remain ahead, in the lead in terms of the quality of its products, and to offer the widest diversity of leather goods, and the sales figures are a consequence of that, and we'll see what happens. Once again, the objective is what will Vuitton look like in 10 or 15 years? Make no mistake, I recall when I joined the company at the end of the '80s, so that was some time ago, people would say, "Well, be careful in this group, beware. There's Louis Vuitton, great, but we're already seeing too many products, so there's a risk." Since, whilst having an image that has increased considerably, whilst being far and away the leading brand of high-quality leather goods, thanks to the work of Yves Carcelle, the size of Vuitton has been increased tenfold. That's not bad.
I'm not saying that we're going to increase it further by tenfold in the next 20 years. That wasn't the goal. The goal was, it's an emblem of France craftsmanship, and to continue to make sure that this iconic brand remains at the forefront of the world's luxury brands. That's what I wish to say about the strategy at this stage. We now have a short film clip which presents some other questions. Let's take a look. Regarding innovation and creativity, well, this of course is one of the key drivers of the group's success and the group's future. I'll say a few words about the position of the group and what innovation has brought to the group in 2012, 2013. We start off with wines and spirits, and so you might say, "Well, look, wines and spirits are forever.
It's always the same thing, isn't it?" I would qualify this and say, and like others, I would say that, well, it is the future of tradition. There is tradition, but we are successful in wines, but it's precisely because we have been investing in quality. In 2012, we've made a significant investment in the making of champagne. We have ultra-modern vats for champagne that have actually improved the quality of our champagne. We have Cheval Blanc, and that's an entirely new champagne factory, and with, of course, technological innovation, but we've also innovated in terms of products. In China, we launched a very unique type of cognac, and it's called Classivm, and that happens to be highly successful in China, and that sets us completely apart from our competitors. You could say, well, look-
Well, being in wines and spirits, you may feel that creativity is an easy game inasmuch as you're looking at timeless products, but still, investment in quality is essential for the future. That goes for wines and spirits, but of course, it goes even more for perfumes and cosmetics, where year on year, we are constantly innovating. We've had meetings with Mr. Martinez and his teams about what kind of new perfume shall we develop. Are there new directions we should follow for cosmetics? It should be pointed out that when I visit the workshops at Saint-Jean-de-Braye, where they make Christian Dior perfumes and indeed most of the perfumes, believe you me, it's highly impressive. We can see our scientists and craftsmen working very hard, not just on perfumes, but even the color of the perfumes.
Dior is the number 1 brand in cosmetics around the world, but especially in France, color is essential. When you look at the new colors being developed in Christian Dior's development centers, it is quite exciting. Likewise at Guerlain. Guerlain, I don't know, you may have seen that new advertising campaign for the new perfume that was launched last year called La Petite Robe Noire. You may have seen a picture of this right behind me. Well, that particular advertising campaign is highly innovative. It is the first time something like this was ever brought to the fore. It was our people who came up with this concept. J'Adore and La Petite Robe Noire must be numbers 1 and 2 respectively on the French market. Now we have to look forward to doing the same thing internationally.
The same applies to creams, L'Or de Vie, which is a fantastic innovation at Dior. You have this product made of excerpts from the vine stems of each cream. You can mix this in the ingredients of a cream, it is quite special. I don't know if this is part of the presents we have for you after this session. Ladies, believe you me, it's worth trying. You shouldn't put it on your face when you have to wait till you're 40 before you start using this sort of thing, not when you're 20. We have another similar cosmetic product that is made based on orchid essence, it is quite remarkable. There's lots of innovation. In fact, there's technology involved in many things. Of course, in watches and jewelry, it is not so much the technology as the manufacturing processes.
There again, we have been making a lot of capital expenditure in developing our processes so as to be completely independent, self-standing in terms of in our watchmaking processes, so that we do not need to rely on anyone else but us. We develop our own movements. It's not just technology, but manufacturing as a whole. Likewise for other products in leather goods and shoes. In leather goods, we've bought plants and tanneries, we've acquired one of the main global suppliers. Would you believe we now have crocodile farms? We breed crocodiles, as you know, crocodiles have an intrinsic value added, these, of course, are an endangered species, we decided to grow more of them. By having a crocodile farm, we know that we will not deplete the natural supply.
There's a growing demand for crocodile leather. We have made sure that this will happen. We don't want to find ourselves in the situations where we are short of supply. Whether it be for watches or shoes, we want to be able to produce our own. Now, we work with a number of innovative partners, but what you do, we bring them in. In cosmetics, we either bring them in the fold at Sephora, or we have crossed shareholding. There's another cosmetics brand that is in the pipeline. We might actually become partners, or we're still in the making. Anyways, fashion, leather good, cosmetics, these are two of the main drivers of the group. We are fortunate enough to have great people working for us.
It should be pointed out that we have outstanding teams working for us, not just the executive people, but all our employees are highly motivated because, of course, it is a privilege to be able to work in this group. I do hope, and I do think that our people are proud of working for us. We've been nurturing a corporate spirit, but also a spirit of teamwork. We're very careful at looking at career management, career planning to make sure our employees have a promising career. We are the only ones to do this because when a young person, freshly graduated from university, joins a single-brand group, well, it's all very well, but joining LVMH means that you can move on.
You can grow from one area to another, move from Paris to the rest of the world and then back to Paris, and you can do all sorts of things. This is why we are in a position to attract the best people. We have been also working hard on diversity. Let me emphasize this: 76% of our staff are women, and a large number of our executives are women. We're very careful, but of course, in a group like this, we need to have women on board. Women are our customers, but women know women better than anyone else. We need women in our executive committees because, of course, when it comes to choosing products, this feminine touch is quintessential. That's why we're keen on having not just a multicultural staff, but lots of women on board.
Now, for the third or fourth year running, I believe we are probably the number one company amongst students seeking jobs in a company. We are the most sought-after company by employees looking for jobs, students looking for careers. We have received the trophy of the citizen company because we have developed employment in this country. I think our shareholders can be proud of this. We have created many jobs. When we started the company in the '80s, we had maybe 10,000 people worldwide. Today, we have upwards of 100,000. We've grown tenfold. The societal role played by the company is outstanding. We are, of course, one of the iconic companies in French and indeed European know-how. More than that, we provide products of exceptional quality, and this is why we have been able to grow year on year.
Not only has our headcount multiplied tenfold, but likewise, our revenue has grown by a factor of 10 over the same period. This is something that is definitely worth mentioning, but it is highly satisfying for shareholders, of which I am, and indeed, the executives of this group, many of whom, as I said, are here today. Let me just wind up with something that should also be emphasized, and that is our environmental policy. 2012 marked 20 years of our environmental department. So it means that the environmental dimension has become part and parcel of our work for a good 20 years. For the past two decades, we were able to appreciate the significance of environmental challenges, and we were able to develop innovative solutions to address these challenges. We have developed these policies with all our partners, our suppliers, our distributors.
This is a pervasive policy, and we were able to demonstrate to all our teams, and especially the people that have to integrate the environmental dimensions. We have been looking at the way in which innovation, creativity, how all this could be compatible with an environmental policy. I will not get into details, but we have an entire chapter of our report on our environmental policies. One of our key projects, we have official recognition by the Ministry of Ecological Transition to look at the effect of our activity on the biodiversity. We have a tool that can measure the environmental footprint of all our packaging, all our wrapping materials. We have the Montaigu Vats, and that site has been classified high environmental quality. Throughout our stores, we have been using green lighting.
This is another corporate responsibility, corporate social responsibility that we have been implementing, especially on the environmental front. I am very confident. I am very confident the world as a whole is enjoying economic growth. The United States has renewed growth. We are looking at a 2% growth in the United States. Of course, Europe, because of the sovereign debt problem and the deficit problem, means that growth in Europe will be close to zero, slightly more, slightly less, but basically basic fact. The silver lining is that if you look at our own market, especially here in Paris, well, we have tourists from the rest of the world. Tourists come here, and they purchase our goods. If you look at our revenue in France, well, a good portion is also attributable to the rest of the world.
Of course, there is a limit to that, and that is the strength of our currency. In our analyst meeting, we have discussed this. This is something of a challenge because a number of countries have been applying a monetary dumping. If you look at Japan for the past few months, the Japanese currency has deteriorated, which means that we have a choice between increasing our prices or finding other solutions because, of course, when the yen is too low, well, that means our exports suffer. Right. Ladies and gentlemen, that is it. The time has come for questions and answers if you have any. Sorry, I had left out the auditors. Auditors, if you would give us your report.
[Non-English content] Ladies and gentlemen, shareholders, on behalf of the auditors, it is my pleasure to introduce our report.
The report was made available at the company headquarters. You should find it in the reference documents that were given out at the entrance of the hall. I will not read them throughout. There are resolutions which you're supposed to vote on. I will look at these. There are seven reports, two on the accounts, one on regulated party agreements, one on conventions regarding share capital. Let me start with the annual financials and the parent company and consolidated financial statements, which you will find on pages 181 of the documents. We looked at the specificities of the company, the accounting standards, and internal audits. We have sent regular reports to the board of directors and the executive committee.
The work on the consolidated financial statement are based on reports carried out by auditors in 56 business units in 44 countries. We believe that the statements are to present or give a true and fair view of the financial position. We also looked at the related party agreements. These are on pages 207, 208 of the translation of the French document de référence. This is looking at companies that have joint directors. There are provisions. There is an amendment to the service agreement with the Groupe Arnault SAS. There's an amendment to the supplementary pension scheme, which benefits a number of directors. The renewal of the joint venture agreement between Christian Dior Couture SA and [inaudible] related to the production and distribution of Dior watches.
The agreements that were approved in previous years were extended in 2012. These are also listed in this report, the special report on related party agreements. Regarding the extraordinary part of this general annual meeting, we have special reports on the resolutions which may have an effect on the share capital. You will find this on pages 256, 260 of the main document regarding the issue of shares, amortization of share capital, issue of shares and marketable securities for employees who are members of the company, as explained. The granting of existing shares or shares to be issued for no consideration to employees and senior executive officers. Our reports find no comments on these items, which are consistent with the provisions of the Code of Commerce. Thank you very much.
Now, I will call on members of the executive committee to join me and take questions from the audience. [Foreign language] Now, we are at your disposal to take questions from the audience. Please introduce yourselves when putting a question. Any questions from the audience? Roger Trampe.
[Non-English content]
[Non-English content] I'm from PAI, the Association for Individual Shareholders. Thank you so much. This is the first annual meeting where you were able to keep some disruptions under control, and we have to recognize that these disruptions are not directed at individual shareholders who are used to sharing out and do not want to make a fuss. In this respect, can you tell us what are the countries where you propose to open the largest number of shops? Do you propose to open a corner in the International Space Station to receive Customer and customers from outer space.
Another question about culture, there are countries where things can vary. You used to have a clip showing a member of the club of economists, and not this year. Why not? Are you going to change this next year? A question about the dividend, the compensation of shareholders. We'd like to thank you for this sustained policy. You've actually embellished this with a first installment. Would it be possible in the future, it is possible legally for companies to pay You can either pay a dividend or a share at a discounted rate. You whetted our appetite about the little present. Can you tell us more about this?
On the store openings on the moon are you saying, or on Mars, the stores? In the space station. I hear you. We've always been pioneers. We'll see how things look. I don't know if the profitability of the store will be sufficient, but it will be a showcase opportunity as the Zenith watch on the skydiver from what, 30 km without a difficulty and landed safely thanks to the watch. Without a doubt. The economists, I think you're right there. I don't organize that in every detail. I think interesting to have an economist. I promise you next year we'll have an economist from the circle of economists because it's always interesting to hear. We had Christian Saint-Étienne last year. It's always very interesting to have the view of the economist. Dividend in shares. That question's been put several times.
As things stand, I mean, it's not really been looked into, but you see, note the dividend increases year on year. That's a good development, good increase over the past 10 years. The gift, well, for that, over to Jean-Jacques Guiony, he pays for the gift. It might not really be up to par. I hope there's cream in the gift pack. Well, it's a surprise. It's a surprise, sir. Okay, here I'm going to have to let the cat out of the bag. It's this bottle of champagne. Next year it'll be skin cream. Next question, please.
I'm a small individual shareholder. I have three questions for you. You are spending EUR 27 million fighting counterfeits. Is it China making counterfeit goods? Is it like, for instance, luggage? Is it the main culprit? I would like to know regarding You've been building boats more than 50 meters long. Are there still people who can afford these boats? Then a question regarding La Samaritaine department stores. I believe that you're going to turn this into a hotel or a museum in the Bois de Boulogne. Is this going to happen? Can you tell us about this? Could you have a Château Cheval Blanc bottle next year as a present?
Well, answer to that, I mean, earnings will have to increase significantly to deliver a bottle of Château Cheval Blanc as we're not producing very much. Before handing over to Jean-Jacques to tell you about La Samaritaine, the foundation is expected to open during the course of next year in La Samaritaine. Well, La Samaritaine, we can expect it to open towards the end of 2015 or even 2016. We're not too sure about the timeline here, given that the building permits given by the city is being appealed, so there's an uncertainty. End of 2015, early 2016. It's a shame that we have those appeals because it's a great project we're going to be creating over 1,000, close on 2,000 jobs in that location. France being what it is, you have a number of community associations criticizing, filing appeals, et cetera.
We had the same thing regarding the foundation project. All that's been delayed by several years because of those appeals filed. It's a great location. The project is a major investment that is going to create close on 2,000 jobs, while we have associations that are trying to put a spanner in the work. We'll get there, but it might be delayed. On the ships, there are still owners for those. What's interesting is that these are owners who come from various areas of the world. The last two vessels that we sold, a ship of over 40 meters to a Chinese customer, that was in 2012. More recently, we sold a ship to a
A young Mexican woman and, of course, with exquisite taste, of course, and a vessel sold to a young Indian. There again, the customer base is becoming more global. Are there any other questions? Yes.
Good morning, sir. I'm an individual shareholder. I would like to know whether the income tax on companies would have an effect on the dividends of shareholders. I have another comment this time. You're running a company that is a world leader. Could you give advice to our president and his government? Thank you.
There'll be no consequence regarding this 75% tax rate. The consequence I'm trying to avoid here is that for a number of employees struck at the prospect of having to pay more and more taxes might wish to relocate. I'm trying to avoid that.
This new measure, whether it's the company that pays, unfortunately, the company has to pay, but the employees are spared, and I hope that will encourage them to stay rather than to leave the country. As to advice, I don't believe I'm qualified to give advice in the current situation, and what's more, I'm not sure that advice the government must be swamped with advice every day. I'm not sure that that advice is followed. Any further questions? Good morning, sir. To follow up on this question, what is the financial effect of the 75% tax? The second question is, last year, I had a question when the share price was about EUR 125. Now, the share price is about EUR 120, EUR 130.
You told me at the time that as to dividing up the share in two, you have for the price to be stable, but we have found a stable price. Could you consider splitting the shares in two? Well, I think it's a little too soon to say, because even France is getting poorer. We can afford to buy a share at EUR 120. It's not because it would go to 60 that it would boost the share price. We have to wait a little more until it gets a little higher, and the share price is somewhat unpredictable. We need to really look at the long term and say that over the long term that it's expected to rise. At least that's what I'm betting on, because in current circumstances, especially if it were to decline a little, I don't know.
I would buy some more, even at EUR 120, you see. I think it's quite an attractive proposition. I'm not advising. I'm not giving any stock market advice. It's just a personal comment. The impact on the 75% tax rate, I'll turn to Mr. Guiony, if he's done the math, I don't know. You'll let me not answer because, in fact, the arrangements of the tax are not yet known, so we're unable to quantify things. We're really only working on assumptions at this stage, so I can't really answer, if only to say that it won't have any major impact. We mentioned the dividend. Of course, it won't have any impact on the dividend, but as regards predictability of profits, it won't have any impact. Well, we suggested that all salaries should come below the ceiling, but that was not met with any success. Next question.
Thank you, sir. Alec Hayday. I'm also an individual shareholder. Another question that was asked by another speaker, you did not answer that question. The museum in the Bois de Boulogne. We know that there were some difficulties regarding construction costs, and there were also some appeals. Thank God that's behind us. We have the building permit, but when will this be built? The club of shareholders were fortunate enough to visit the construction site. It is a remarkable building with futuristic designs. Can you tell us more about this? Yes, absolutely. As I indicated, there was considerable delay suffered owing to administrative difficulties. We've now overcome those because planning permission has been endorsed now more recently by the Conseil d'État, the project is nearing completion. It's expected to open to the public during the course of 2014.
To give you the exact date, as you see, you visited it's a rather complex and technically sophisticated building, it will open during the course of 2014 and perhaps on that occasion, we can organize a further visit, without a doubt, for our shareholders. Next question.
Mr. President, [Non-English content] .
I'm a former shareholder, I'm a shareholder of both LVMH and Dior, and also a shareholder of Hermès, of which you acquired a substantial percentage. The family shareholders of Hermès were not too happy, it was their problem. They shouldn't have gone public. I have a question. You may have forgotten to Well, you didn't mention Hermès is, of course, the first true luxury brand, both in terms of quality and prices, because of course the prices are quite different between Hermès and LVMH. Do you have any serious intention past the 20% or 25% you have of Hermès right now? Might you go further and take over after Jean-Louis Dumas, a man whom I greatly admired, and he was one of the founders of Hermès.
You're absolutely right. Hermès is a very iconic brand that produces leather goods of unquestionable quality. Just to point, the price of goods, Birkin, Kelly bags are very high priced. If you go to Louis Vuitton on the Champs-Élysées, you'll see that we also offer high-quality leather goods of impeccable quality, whose prices are in the same price range as those. Just to point that out. That confirms what I said about Vuitton. Our loyal Vuitton customers know this iconic canvas, but they don't all know that Vuitton offers outstanding high-quality leather goods that are totally handmade with ancestral craftsmanship in its stores. That's why we've decided, together with Michael, to showcase more of that aspect of things. As to our relations with Hermès, on our side, they are quite calm. We became a shareholder of that company, as you indicated, to the tune of some 20%.
Unexpectedly, we had not planned to become a shareholder of that company. We made a financial investment, and that financial investment was unwound in a way that we had not planned, quite frankly. We had not planned that. That's the situation. We don't want to be in any way unpleasant with the family shareholders of Hermès. Quite the contrary, we wish to support. That's what we did because we voted in favor of all the resolutions that we attended. We wish to support their policy. We're being blamed for something that is quite untrue. We don't plan to increase our stake to play a role in that company. We simply wish to provide friendly support to one of the finest French companies. If we wanted to act differently, that would be possible because of the family-owned structure of the company.
Be that as it may, we're very friendly in our attentions towards Hermès. If there are no further questions, let's move to the vote because we have a fair number of resolutions to vote on today. Thank you. We have a quorum. We have a quorum. Let's move to resolution number one, approval of financial statements. Please vote. Approved. Resolution number two, approval of consolidated financial statements. Please vote.
Approved. Approved. Resolution number three, approval of related party agreements. Please vote. Approved. Approved. Resolution four, the dividend. Please vote. Approved. Approved. Resolution number five, renewal of my appointment as Director. Approved. Approved. Thank you for the trust placed in me. Resolution number six, renewal the appointment of Madame Bernadette Chirac as Director. Congratulations, Madam. Congratulations on your reappointment. Resolution number seven, renewal of the appointment of Mr. Nicholas Clive-Worms. Please vote. Approved. Approved. Congratulations, Nicholas. Resolution number eight, renewal the appointment of Mr. Charles de Croisset as Director. Please vote. Approved. Approved. Congratulations, Charles. Resolution number nine, resume the term of appointment as Mr. Trapani. Please vote. Approved. Approved. Congratulations, Francesco. Resolution number 10, renewal of the appointment as Director as Mr. Hubert Védrine. Please vote. Approved. Approved. Congratulations, Hubert. Resolution number 11, authorization to trade in the company shares. Please vote. Approved. Approved.
Resolution number 12, authorization to be granted to the board of directors to reduce the share capital. Please vote.
Past. Resolution number 13: delegation of authority to be given to the board of directors to increase the share capital through capitalization of profits. The resolution is carried. Number 14: delegation of authority to the board of directors to increase the share capital with preferential subscription rights. Please vote. Carried. Number 15: delegation to the board of directors to increase share capital without preferential subscription rights. Resolution carried. Number 16: possible increase by the board of directors of the share capital without preferential rights through private placements. Carried. 17: authorization to the board to set the issue price, giving access to the company's share capital under certain conditions not to exceed 10%. Please vote. Carried. Number 18: authorization to increase the number of shares for issues oversubscribed under the 15, 16 or 17 resolutions. Carried.
Resolution 19: delegation of authority to be given to the board of directors to increase the share capital in connection with the public exchange offer. Thank you. 20th resolution: authority to the board of directors to increase the share capital with contributions in kind. Thank you. 21: delegation of authority to be given to the board of directors to carry out capital increases with preferential subscription rights reserved for group employees.
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Thank you. 22, ceiling for all capital increases. Please vote.
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Thank you. 23 free shares for group employees.
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Thank you. 24th and last resolution, amendment of the bylaws. Please vote.
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Thank you. The resolution was carried. Thank you. You're all welcome to refreshments in the room next door.