TEXTE-S & P Summary: LVMH Moet Hennessy Louis Vuitton SA

Notes on luxury goods producers and distributors French LVMH Moet Hennessy Louis Vuitton SA reflect the views of Standard & Poor's Rating "of" strong "group risk profile of the company and" modest "financial risk profile as Standard & Poor's define terms. With an unmatched portfolio of luxury brands such as Louis Vuitton, and a strong distribution network and diversified LVMH has recorded double-digit organic revenue growth since 2010. The group has a € 1 billion discretionary cash flow every year we hold strong. Moreover, the fiscal policy of the LVMH moderate, as shown his history of strong financial measures. In addition, the group decided to use the equity in order to finance part of the acquisition of Italian jeweler Bulgari in 2011. Chanel Evening Bags S & P's base case scenario, the operating system We believe that LVMH is a sales growth of over 15% achieved this year. He began 2012 with an extraordinary power: organically a whopping 26% of sales, 12%. Although we have not excluded that LVMH can slow strong revenue growth, we believe that the favorable economic growth in luxury goods on the back of strong growth in the emerging markets will continue to support sales. S & P cash flows for the base case scenario and capital structure Despite a likely increase in working capital and capital expenditure levels (capex), we expect discretion of cash flow is usually less than EUR 1 billion in the coming years. Therefore missing share repurchases and acquisitions of large, we expect the ratio of adjusted funds from Standard & Poor operations (FFO) and net debt of LVMH will increase sharply in 2012. We believe it to be far beyond our minimum of 50% for the current ratings. Liquidity Short-term rating of "A-1". This reflects our long-term credit rating business and our view that the liquidity of the LVMH group strongly in our criteria. We expect sources easily meet the needs of more than 1.6 times between 2012 and 2013, and to recognize the lack of financial obligations. We believe that the following sources of liquidity in 2012: - About 5 billion years into FFO; - A cash balance of around € 2.6 billion at 30 June 2012; - Lines of undrawn confirmed credit lines of € 3.2 billion at 30 June 2012, including commercial paper backup of the group (CP) and - Demonstrated ability to use a regular issuer of the financial markets. Compared with the estimated requirements for the following period: - EUR 4.1 billion in debt repayment by June 2012, including € 2.6 billion for CP; - The annual working capital and investment in line with 2011 levels and A dividend of around € 1.4 billion a year -. Perspective The positive outlook reflects the possibility that we may update LVMH when it reported strong sales growth, generate free cash flow and adjusted FFO to realize its net debt by more than 60% on the long term. We expect that discretionary cash flow EUR 1 billion in the coming years not exceed. We could revise the outlook to stable if LVMH is able to keep its ratio of adjusted FFO to net debt of about 60%. We believe that the most important factor weakening acquisitions, this ratio could be significantly below our guidance of 50% for the current ratings. LVMH is structurally strong cash generator to publish managing free cash flow over € 2 billion, even in a difficult year as 2009. We believe that the group be able to keep FFO net debt of about 50%, even though the gross margin by 200 basis points and big sales contract 10%, which is an unlikely scenario in our opinion, fallen. Criteria and the associated research policies - Criteria Methodology: Business Risk / Financial Risk Matrix Expanded, 18 September 2012 - Factors of Credit Tags: business and financial risks in the retail sector 18, September 2008 - Standard & Poor's revised assessment speculative approach to credit, 13 May 2008 - 2008 Corporate Criteria: Key figures and adjustments, 15 April 2008 - 2008 Corporate Criteria: Analytical Methodology, 15 April 2008