LVMH Moet Hennessy Louis Vuitton Aktie

Good morning to all. Thank you for attending this general meeting. I formally declare the meeting open. And we've given, as we do every year, the possibility to ask questions in writing prior to this meeting, which, of course, we will answer. I propose to appoint as scrutineer the 2 shareholders present representing the greatest number of votes and who are accepting this function, Société Christian Dior, represented by Antoine Arnault and Financière Agache, represented by Frédéric Arnault. I also propose that we designate as meeting Secretary, Mr. Jérôme Sibille, and together, they will comprise the bureau of this meeting.

The agenda, you are familiar with it. We are here to approve the financial statements of 2025 and to answer the questions that you have sent into us or that you will be asking us after the session. And prior to that, we're going to explain, comment and run through both the results of 2025, which are quite acceptable. We've achieved over EUR 80 billion in revenue, profit from recurring operations of almost EUR 18 billion and free cash flow, which is a key metric of over EUR 11 billion.

And before handing over to Madame Cabanis, I'd like to commend the teams of the group here present who've allowed us to achieve this performance in an environment in 2025, challenging, challenging both for geopolitical reasons and challenging on the monetary front because the euro has risen constantly against a certain number of currencies.

Let's now run through the 2025 figures in detail.

Good morning, ladies and gentlemen, dear shareholders, thank you for turning out in such large numbers. I will give you the numbers for 2025, but also the start of 2026. So let's start with sales in 2025, you will see that organically, sales were slightly down, 1% compared to 2024 on an organic, i.e., on an equal scope basis. The foreign exchange had a 3-point negative effect, and that reflects the strength of the euro compared to the other currencies in which we built our business in 2025. This was because of the U.S. dollar and the Chinese RMB. And you can see that this situation got worse in 2026, but the scope effect is negligible. So all in all, this means that sales were down 5% and the published number stood at EUR 81 billion.

You have the geographic distribution of sales. It changed slightly, but it made no difference on the geographic balance of the group because the 3 main markets, Europe, U.S. and Asia, each accounted for 26% of sales. Japan was slightly down to 8% of sales and other markets were up 1 percentage point to 14% of sales.

If you move on to the developments on a quarterly basis, one region to the other. Let's start with Europe and the U.S. Both markets were stable, slightly down in Europe, but the quarterly momentum turned around because there was higher growth at the beginning of the year on Europe because this was a strong dollar. So this was -- this favored the tourist trade, whereas then when the dollar went up again, then sales went back to the U.S. and there was less of it in Europe. Japan was down 12%. There's no surprises there because you may remember the previous year, there had been a 28% growth. This is because of the comparison basis, but there was an improvement in H2 because, well, there was less of a comparison effect, even though the basis was still high. And then Asia was down 4%, but growth resumed in H2 with an improvement, an acceleration of local demand.

Now if you move on to the various business lines. As you know, the main business is fashion and leather goods, and that accounts for about half our sales. Then you have Selective Retailing accounts for 23% of sales, and that's mostly driven by Sephora. Then watches and jewelry, 13% of sales; Perfumes and Cosmetics, 10%; and then Wines & Spirits account for 7% of sales. Now this is the organic change in sales for the various business lines in 2025. So if you look at the table, you will find that you have an organic decline, a 5% decline for Wines & Spirits and Fashion & Leather Goods. Perfumes and Cosmetics stable and organic growth for watches and jewelry and Selective Retailing, respectively, plus 3% and plus 4%, again, with Sephora's remarkable performance in 2025.

You should also note, and this is what you have on the right-hand side of the table, H2 saw an acceleration of these trends for most business lines, mostly Fashion & Leather Goods, Watches and Jewelry and Selective Retailing. And that made it possible for organic growth to resume at plus 1%.

Now let's look at the actual profits. Now you have the change in profits from recurring operations, down 9% in published data. This degradation is mostly to do with the currency effect accounting for upwards of EUR 1 billion. Without that, profit from recurring operations would only be down 4%. If you look at the profits per business line, taking them in the order of the table, you start with Wines and Spirits with the largest decline. Well, both had a negative currency effect, but also a negative effect of mix and sales and then the first effects of the trade tensions between -- with the U.S. and China.

Fashion and Leather Goods, also slightly down, mostly with the currency effect and lower sales. But still, the profit margin, 35% is quite high and higher than the group's historical average. Watches and Jewelry was stable, even though we invested quite a bit, mostly with the transformation of Tiffany, and that is bearing fruit. You will be able to see this for Q1 already. Perfumes & Cosmetics enjoyed an 8% growth in its profit, and that was driven because of its selective approach to retailing, but also working on the business model's overall efficiency. And then, of course, you should note the significant improvement in Selective Retailing profits, up 28%, mostly, of course, thanks to Sephora's performance, which continues its profitable growth, but also return to profits of DFS, mostly because we streamlined a number of territories, but also there was -- we worked hard on cost cutting.

Now then if you take a look at how you arrive at the actual profit at group level, I already mentioned sales. So let's start with gross margin. That is down 6% over the year, and that reflects, of course, the inflation of goods sold and then currency effects. Operating expenses were down compared to 2024. So that includes marketing and selling, and general and administrative selling were down 4%, admin down 5%. And so that means we were able to apply significant discipline on cost allocation. But on admin, we had some costs, nonrecurring costs, in particular, of course, the Olympic Games. And so on that basis, we saw that the profit was down 9%. It stands at almost EUR 18 billion.

Operating margin stands at 22%. So that's slightly down, but still higher than the group historical average. And then you have other expenses, income and expenses, no, that by definition is nonrecurring. In 2025, that was mostly the closing of a number of territories for DFS, and there were a number of restructuring costs. This is mostly an accounting expense. It doesn't have a cash effect. And then the financial result is negative, minus EUR 400 million, but it's still an improvement compared to 2024. And then the tax bill stood at EUR 5.5 billion. Now the corporate income tax rate was up to 32.8%, up 4 points compared to 2024 because of the supposedly exceptional additional tax and it's not so exceptional because it will be applied again in 2026. All in all, net profit group share stood at EUR 10.9 billion, down 13% compared to 2024.

If you look now at the balance sheet, the currency effects were significant on most items on the balance sheet, but that's applied both to assets and liabilities. And so as there was no acquisition, the structure of the balance sheet is very much the same as the previous year. A few words about operating free cash flow standing at EUR 11.3 billion, significantly up 8%, even though profits were down, first, because we were selective in capital expenditure, but also we worked hard on converting profit into cash, and we worked hard on working capital requirements. That's at all levels in the group, we were able to achieve that. And so the net debt position was down again in 2025 for the third year running. It stood at about EUR 7 billion, and the debt ratio was down as well. It stands at about 10% of equity. This is very much in line with where it stood in 2020, the year before we acquired Tiffany.

And then finally, and that will conclude the comments for 2025. We will be offering a dividend of EUR 13 per share. So this is stable compared to the previous year. We very much try and align the profit level to that of dividend in years of growth. And if there is no growth, we keep it stable. There was an interim dividend of EUR 5.5 back in December. And so the balance of EUR 7.5 will be paid out in April.

Now then a few words about Q1 2026. Over the first 3 months of the year, you saw that LVMH enjoyed an organic growth of upwards of 1% and the trends improved in most business lines. Revenues stood at EUR 19 billion. Now that's down 6%, mostly because of the currency effect, a 7 percentage point effect. But well, that accounts for 6% of our sales. Now we have a limited exposure to the Middle East. That is about 6% of our sales. But nonetheless, it has a significant effect in the region, even though the year started off well. Without that, organic growth would have been plus 2%. Elsewhere, Q1 had solid growth in China and Asia outside Japan as well as the U.S. If you look at the various business lines, fashion leather goods were down 2%, but we have a positive effect in local customers, but the tourist trade was negatively impacted by currency effect. This is still a significant part of our business.

There is growth in the U.S. and China, mostly in Asia. It's down in the Middle East after a good year -- after a good beginning, the 3 other lines of business, Selective Retailing up 4%, thanks to Sephora, Watches and Jewelry, up 47% with the new stores. Perfumes & Cosmetics also good growth, especially with Guerlain and Parfums Christian. Wines & Spirits were up 5% in Q1. So these are the numbers for the year. Thank you for your attention.

And now we're going to look at a clip with questions put by some shareholders.

[Presentation]

Ladies and gentlemen, dear shareholders, I'd like to begin, if I may, by saying a few words about the year that just ended and for which we are gathered here today. I won't return to the figures, but I would say, nevertheless, that these figures demonstrate the group's resilience in the face of a challenging environment, and it's due to the talent of our teams. And once again, I should like to acknowledge them and to say that each of our most important divisions are today headed in an exemplary manner. That's an important point, starting with the most important, Fashion and Leather Goods, Vuitton, with our friend, Pietro, Pietro Beccari, who's been with us for over 20 years now and continues to lead with considerable talent. This business increased his responsibilities with the whole Fashion and Leather Goods division. And for the future, no doubt, we shall see.

And then Fashion -- Wines & Spirits with Jean-Jacques Guiony, who's been with us for a while now, perhaps even longer than Pietro and who took over in a quite exceptional manner, I have to say, a division that is facing a more challenging market, notably in certain places with some tax, tariff problems, et cetera. But in spite of all that, a demand that remained strong for champagne and for wines also for rosé wines, a bit more challenging for cognac last year, and we sense a recovery in the first quarter of this year. And so that should trend well, and we'll return to that in due course.

And then amongst our most important division, we have the Dior brand with Delphine, who is leading. The arrival of Jonathan Anderson in this iconic house, and it's really got off to a great start such that we're having difficulty in delivering the products so strong is the demand. We'll see how it evolves. It's going to lead a show in Los Angeles at LACMA for the Cartier season, and we've already seen some excerpts of that. It's going to be very interesting and exciting.

Next, the Watches and Jewelry division, which is currently directly headed by my #2, Stéphane Bianchi and that is delivering an interesting performance in 2025 with notable progress of Tiffany and Bvlgari and continues in this year to deliver quite good growth rates. I'll return to that later.

And lastly, Cosmetics. That is now headed by Véronique Courtois, who's also been working with me for quite a long time. I won't give the number of years, but -- and we've been able to draw on her experience for Dior that she's been heading up for quite a while now, the most iconic brand of perfumes and luxury beauty and selective beauty as compared to mass market brands. I'll return to that later.

And lastly, the Selective Retailing business, Sephora, Guillaume Motte that is going from strength to strength, and is present in barely half the countries in the world. So the world is your oyster, and it's already the leading brand retailing perfumes in the world. And so this year, we had several significant events. I won't go back over the detail of the figures, but store openings for iconic houses throughout the world. You probably all saw the new Maison of Vuitton opened in Shanghai, that's a ship, a vessel and is essentially a museum of Vuitton's expertise opened in downtown Shanghai, where we received some 100,000 visitors a week. It's truly remarkable. I've been there several times.

I was congratulated by the Secretary General of the Communist Party for doing that. That would never have happened in France if we decided to build a vessel ship on the Place de la Concorde. I'll let you imagine the result. The trade unions here always supportive would have criticized that initiative. But there, we did it in less than a year. It really does show the dynamism of countries where we're established as compared to the heaviness of our old Europe that really is taking a while to turn around and to modernize itself, bogged down as it is in ghastly bureaucracy. But that's another matter. And for Dior, we've opened several iconic houses in New York, in Los Angeles and more recently in Beijing that are very iconic with quite extraordinary design and also explains the success of our group, notably Dior in the United States.

The Universal Expo in Osaka, where the French building that we extensively sponsored with our brands was the most widely visited after Japan, of course, because for the Japanese, it's natural, they don't visit the Japanese building, but it was a considerable success. And we also hosted a wonderful show in Osaka, which I visited with Pietro, one of the most widely visited in Osaka after the expo, amongst the other highlights of 2025 with the signing, thanks to our proximity and that of Stéphane with Formula 1 of a 10-year contract with Formula 1 racing. So the group with all its brands has now teamed up with this sporting event, which is one of the most widely followed in the world that's recurring because there's a Grand Prix just about every month and is becoming an event that the young are increasingly following and for our brands is a recurring and tremendous opportunity.

TAG Heuer chronometer. Louis Vuitton is very much involved. So that's very important for us. Amongst the interesting events I should add during the year. As Cecile Cabanis mentioned, the fact that in 2025, the second half of the year saw a return to growth of our business. That's continuing at least. It was continuing through the first quarter of 2026. I'll come to that in a moment. During this period, we have 2025 innovations that are continuing, very significant of our various houses. I won't go back on them in detail, but just to say that amongst our perfumes and cosmetics, Dior, Sauvage is the world's leading fragrance the success of Miss Dior and J'adore going from strength to strength and Dior continues to sell lipstick every 2 seconds in the world. So you can see that, that is going to fuel our production facility at Saint-Jean-de-Braye, and that's continuing. And its lipsticks, they're the most qualitative that are to be found. We have an R&D facility at Saint-Jean-de-Braye that is producing extraordinary products, which explains their success as is the case with many of our products, a brief word. Antoine is going to come to that in a moment of the group's economic and social footprint in France and in the world.

Today, we have over 200,000 people in the world and over 40,000 direct jobs and every direct job generates 4 indirect jobs in our suppliers in France. That's a lot of people, the preservation and the transmission, the passing on of our skills in more than 280 design professions with -- by way of experience, over 3,800 apprentices trained by LVMH's Excellence Employment Program since 2014 since its launch. We need to obviously train the young to sustain our skill. Antoine will tell you more about the nonprofits, the active employment initiatives, and we have 117 production and craftsmanship plants in France, even if French producers and ourselves are not necessarily encouraged to continue to manufacture and produce in France, notably in a number of tax measures. I won't go back over that. Everyone knows that, but nobody does anything to change that situation. And we have paid EUR 5.5 billion in corporate tax in 2025, around half of which in France.

I could continue through the year 2025. But what I'm sure interests you most is the outlook. Well, for the outlook, there are 2 things. There's the short term and the midterm. We can talk a bit about the short-term prospects. What fascinates and what motivates me and what amuses me is how will the group look? What will be the advantages of the group in 5 years.

In short term, you'll have noted that the world is now in a pretty serious crisis in the Middle East. There was an impact as of March on our figures and reduced by half the growth expected for the first quarter. It all depends on how this crisis will unfold. Well, the outcome, either it will be a world catastrophe with a very serious and very negative economic impact, in which case, who can say how 2026 will unfold or it will be resolved more rapidly in some shape or form that we all hope for, even if it doesn't seem to be easy, in which case, business will recover and resume their normal course. Be that as it may, remains unpredictable if the second assumption were to appear. I expect to see a return to growth in our various activities in the second half of the year.

In the opposite case, we'll have to face a crisis already happened to us, and there's every likelihood that we'll continue to gain market share as we did in 2025. What I would say is what counts the most is where will we be in 5 years' time? What will be -- what will the group look like in 5 years' time? And I believe that we have tremendous assets to remain far and away the leader in the manufacturer of quality products with the iconic brand, Vuitton, Dior with our iconic brands of perfumes and cosmetics, with our jewelry brands, for example, Tiffany.

Tiffany, I think that we must set ourselves as a goal in 5 years to be the leading jewelry brand in the world. We're not far from that. We're not there yet, but I think we can achieve that over the next 5 years, and you will not contradict me on that. That's the goal. That's the objective, and we've taken a path with extraordinary qualitative products in terms of -- we brought out the design of Jean Schlumberger, who worked as a designer at Tiffany for years at the beginning of the last century. And all that is yielding results that are gradually becoming very impressive.

And in addition to that, we're renewing, renovating the stores. You may have visited some aside from the most iconic on Fifth Avenue. We've reopened flagship stores in Milan right next to Vuitton, Montenapoleone, a great store, very successful, another iconic store in Ginza, Tokyo, Japan. So all the effort undertaken is expected to generate results. But the most important thing is to focus on the quality of the product. On the quality, I should say, of the craftsmanship. And at Vuitton, we have 2 iconic products that are high-end products. On the one hand, The Capucines, a bag that was launched some 10 years ago with the very predecessor, Michael Burke, who headed up Vuitton for 10 years [indiscernible]. And with him, we launched this product and a more recent one that was launched since Pietro is heading the company with a creation from Pharrell Williams called Le PONT 9, a very fine product. I don't know if we have a photograph to show you. But this product in an outstanding leather, totally made -- handmade.

We have thousands on the waiting list, and we produce it as the pace that we can with craftsman, who -- each manufacturing a product, each craftsman does so, but it takes time and a considerable success, which will continue in terms of product quality of Vuitton. With watchmaking, we're fortunate to have the Fabrique du Temps, which is one of the most iconic watchmaking parts. And I'm wearing this morning watch manufactured by that workshop that's truly extraordinary on which was one of my heroes, Einstein. And if you press the little button in there, there's an incredible mechanism. Einstein pulls his tongue out. I'm going to show that to the directors, the Board meeting after this. I'm going to like to just give the floor for 5 minutes or 3 minutes, the person who's now heading up this business, who's delivered this type of product. My son, Jean, who would like to speak, but not for too long though, please.

Yes, you're right to say that I shouldn't talk for too long because if given a free rein I could go on for literally hours on end. This -- of course, this career plan was outstanding. It's a great adventure. And it wasn't just watches and jewelry, it was all of LVMH. But we started -- we decided to transform Louis Vuitton's know-how with 2 great watchmakers, Michel Navas and Enrico Barbasini, who created the Fabrique du Temps. And we've been working in different trades. I was checked on my phone, but we have about 30 different trades working at the Fabrique, and that includes engraving, tapestry. You have all sorts of specialty trades involved in the making of specialty watches.

And so La Fabrique du Temps is a bit different from other workshops. And one of the rules is you have one watchmaker making a watch from A to Z. And so that means we cannot increase production exponentially and the watch that you're wearing, I mean, this is a very special watch, but any watch made at La Fabrique du Temps, we can tell a collector or a customer when the piece was built, how long it took to make it, what the weather was like, and where the watchmaker stood in the workshop. And this watch is one of these. There were more than 600 hours of work in the mounting, in all the fine mechanisms that allows Einstein to stick his tongue out. Any case, if you get a chance to visit that Fabrique du Temps, the doors are wide open.

Well, now another example of what motivates the group to continue to strive for the highest quality was the acquisition of some 10 years ago of Loro Piana and whose results are quite excellent. We don't give them directly, but I can tell you that the growth that we don't want to increase as it happens is better than all the high-end brands in this sector. And what's interesting is that this acquisition, we did it with a family that has remained in part in the share capital, and I'm very pleased to have done so for that matter because the values increased considerably, multiplied the figures quite strongly. And they're still with us and they're really excellent connoisseurs of raw materials. And Frederic, who now heads up Loro Piana in 3, 4 minutes will tell us what contributes to the success of the company.

Well, good morning, everyone, and I'm delighted to be able to tell you a few things about Loro Piana, a truly fantastic house. I'm delighted to be there running -- have been there for about a year. Extreme quality is key to company's success. It's about 100 years old. You're looking at exceptional fibers and textiles, and it was one of the very few companies that integrates the whole chain from cashmere in Mongolia and silk in Peru. And of course, we've been investing in this unique know-how. Last year, we're talking about the highlights of 2025. We started 2 new fabrics, Royal Lightness, which is a combination of fine wool and silk and eye swish, which is a type of cotton, very light, but extremely soft as well and do have a look and feel for this fabric in our stores. And we have been very much investing in this unique know-how, many thanks and enjoy the day.

Another activity of wines and spirits. People often ask me wines and spirits, what's the situation? People are consuming less alcohol, what's the future? And in fact, the future is promising. First and foremost, they are outstanding unique brands amongst the finest wines in the world. We have the best cognac far and away because we're far and away market leader. And this market continues to expand differently. And to illustrate that, I'm going to ask Alexandre, who's #2 behind Mr. Guiony, this business and who's crisscrossing the world to review our activities to talk to us about Africa.

Well, thank you, and good morning, everyone. When Jean-Jacques Guiony, who is -- who runs Moët Hennessy and myself arrived a year ago, there was talk of restructuring, and I thought we should look to the future in the long term. As you were saying, Africa is the most attractive continent for Moët Hennessy. Together with Jean-Jacques, we went to South Africa. And we saw Hennessy's remarkable dominance. It's the third largest market for Hennessy after the U.S. and China, we've been -- we sell the equivalent of 2 glasses of cognac per inhabitant drinking age per year, which is a very high average. And that continent is growing fast.

Other countries in Africa where we have a leading position, Nigeria, 220 million inhabitants. 30 years' time, it will be the third largest country or most populated country in the world. Again, for Moët Hennessy, this is a big market, not just because of the demographics, it's also because this is a young population and such products have Moët Hennessy Champagne, Hennessy cognac, Veuve Clicquot champagne, and there are many brands. This is an access to the market of luxury goods with the pride that goes with it. And of course, we can have access to other products that haven't made much inroads as yet in the -- on the African continent, but this is a good illustration of our long-term approach.

The example of Hennessy in South Africa, we have a 90% market share, but it took us 20 years to build that with a local retailer that enabled us to be spread not just in Johannesburg and Cape Town, but all small towns in South Africa. You have small stores selling a few bottles and then you have the largest restaurants and nightclubs. And how many potential -- I mean, in Africa, how many people are you talking about? We're looking at 1.5 billion people today. And by 2050, there will be 2.5 billion, an additional 1 billion people. Wow, that's pretty impressive. So a very young continent.

And so the future of our group is also based on the young people of championing creativity. And this year, we've received Michael Rider at Celine, [indiscernible], Sarah Burton at Givenchy and Maria Grazia at Fendi and all have generated considerable success, but not as strong as Jonathan Anderson at Dior. That's what Delphine is going to talk to us about creativity.

Well, good morning, everyone. My name is Delphine Arnault. I joined the group in 2001 at work at Christian Dior with Sidney Toledano. As of 2013, I was -- I became #2 at Vuitton, working with Michael Burke, who is right here in the audience. And since 2023, I've been in charge of -- well, I've been the CEO of Christian Dior which is a daunting role, but there's something of a revolution going on there with the arrival of Jonathan Anderson. He is a highly talented creator, something of the genius. And we know him well because he worked for 11 years at Loewe. And Jonathan is -- I mean, since Christian Dior himself is the first one to work on both women's collections, men's collections and Couture and his fashion shows are very successful, not just in the media, but with the customers themselves. He's been with us about a year now and the first -- his first creations arrived in the stores in January, on the 2nd of January, a great commercial success. We have indeed many items that are already out of stock and -- but we are trying to keep up.

We're working on operational excellence, supply chain excellence, and also retailing excellence, as my father just said. We -- last year, we opened 3 houses of Dior, and these are shops that I can be as wide at Avenue Montaigne and they're decorated by Peter Marino. And so there are 3 stores, one on Rodeo Drive in the U.S. You have to remember that the United States is very significant market for Christian Dior; one in New York City, but then we also have a House of Dior in Beijing at Sanlitun. And this year, we will be opening Houses of Dior in Milan and Osaka, Japan. Now in line with this, and I've always been very much very keen on the creation and creators. And 30 years ago, we started a new prize, the LVMH prize for young creators. And that is something I created with Jean-Paul Claverie. That prize is an award that enables sometimes to emerge Jacquemus, [indiscernible], Grace Wales Bonner or Marine Serre. They were laureates of that prize; and we have Nicolas Ghesquière, Jonathan Anderson, Maria Grazia Chiuri, Marc Jacobs, Phoebe Philo and many others were members of the jury. Well, thank you very much.

Well, there you have a summary why I'm extremely confident in the 5-year outlook regarding the development of our group. That's why when the share price drops a bit as is the case for a while, I'd buy more shares. And then I wait another 5 years, not by remaining inactive, but you just have to be patient in business that you always need to be patient. If you get too excited, it doesn't lead anything. I'm just saying that. Thank you for your attention. What's up next? Questions? Maud, sorry. So Maud is going to talk to us about HR, outstanding Head of Human Resources of the group, followed only by Antoine, who is going to talk to us about all the societal side of our group. Thank you.

Dear directors, shareholders and colleagues, last year from this very spot, I shared my conviction, namely that women and men in our group are those that will ensure the sustainability of our performance and the continuation of our ambitions. And this is the whole meaning of our people at heart approach. We put our own people at the heart of leadership, excellence and long-term performance.

We made 2 collective commitments. One was to roll out our career development policy, career compass to as many as 211,000 employees and continue our efforts to promote equity, and I'm delighted to show you the fruition of these efforts. In 2025, our 31,000 managers were trained and empowered for -- to ensure that talent support should be constant and intentional. And we decided that skills and career path should be at the very heart of managerial duties. And this year, we have been rolling out, as I said, career path to all workers so that everyone should have some visibility on his or her outlooks, their performance and should be an active player in their own career paths.

And you have 5 pillars for this approach, knowing the group, knowledge of oneself, creating a network within LVMH, measuring performance and impact and promoting internal mobility. Now we have some results. I'll give you one example regarding mobility. This year, as many as 2/3 of managerial positions were filled internally compared to only half 2 years ago. Our second commitment was to do with gender balance. When I joined the group back 20 years ago, women accounted for less than 20% of key positions. They were 48% at end 2024. And today, we've reached and we did better since that we have more than 50% of women in key positions.

Now these numbers are indicators of the use and effectiveness of our action. They reveal our ability to lift obstacles, whether visible or not, which could impede somebody's career development regardless of age, gender or background. Human resources always look at the long term. We have to prepare succession plans. We have to support mobility, and that requires constancy and the indicators I just shared with you shows that we have an ongoing momentum. That momentum is also driven by training, which is a key driver of performance.

In 2025, 82% of our employees were given an additional training, and we have a clear ambition we want to train. Well, training is how we prepare for the future, and we are demanding also when looking at new trends that are redefining our trades, especially, of course, artificial intelligence. And the advent of artificial intelligence prompted us to make a clear choice. We have to seize the opportunity, but respect what we are. We are an ethical and resolutely human company.

Our program AI for all is the direct translation of that. What we propose to do is to make artificial intelligence understandable and accessible to all. And this adds to the deep identity of our houses. The work of leather maker, the CEO's ability to mobilize his or her teams, listening to a commercial consultant or the patience of a wine seller master, all these skills have got to be developed over the long term. And this is why we developed our programs, Métiers d'Excellence, Trades of Excellence since 2014. We've been supporting upwards of 3,800 apprentices in 43 trades and 73% actually joined the business or continued their studies. And this aligns between the power of technology and the wealth of human skills that have strengthened our competitive advantage and our ability to create values for our customers, for our houses and for decades to come.

Preparing the future beyond our know-how also means attracting tomorrow's talents. And with Inside LVMH, which is a training platform open to all more than 200,000 people were certified around the world. New class started this year with upwards of 42,000 students enrolled. Insight is our spirit of conquest supply to talent, but it is also our way -- a concrete way of providing -- rolling out our group around the world. And that rollout, it can also be reflected in our societal footprint. And let's look at this more specifically in France.

In France, we have upwards of 40,000 employees, the wage bill adding up to more than EUR 4.5 billion. We have 539 stores and 117 production and craftsmanship sites all over the country in as many as 66 locations. And this territorial anchor goes beyond, of course, the borders because 75% of sales from our French houses are exported. According to Aster, each direct job at LVMH generates more than 4 indirect jobs in the national economy. So we're talking about 160,000 indirect jobs supported by 13,500 Tier 1 suppliers. And of course, we are committed to this. And when our workers and employees experience geopolitical climate or personal crisis, we are there to support them with the LVMH Heart Fund.

We've helped as many as 11,000 people since 2021 on 5 continents with psychological, social or financial support. And of course, we had an exceptional effort with the situation in the Middle East. And of course, this goes beyond the walls of LVMH. We have LIVE, the Institute for vocational training. We have 7 active campuses. The latest one was opened in Bordeaux in March of this year with 700 long-term unemployed who were taken on board. And out of these, more than 80% returned to work.

Now of course, these achievements is the result of our social road map that started in 2020. The objectives for 2025 were all met and now we're looking at the next step, which is Ambition 2030. Ladies and gentlemen, dear shareholders, I told you about our commitment that we've kept, concrete results and a solid momentum. But I would like to make 2 commitments for the year to come. The first commitment is to continue our people at heart policy, and we'll train indeed all of our employees through career compass, and we'll start a new edition of our survey, the Pulse survey to all workers around the world in 80 countries, 5 generations, about 20 languages. And the second commitment is to accelerate our support to workers in the transformation brought about by artificial intelligence.

We are building a group that will secure our talents and make them sustainable over the long run. We are a group that will pass on and cultivate excellence because the desirability of our houses will be built over decades and not quarters. We want to create value and pride for our workers, for our employees, for our territories, for society at large. This group has been advancing the spirit of conquest, but that was always the soul of LVMH. Thank you for your attention.

Antoine, take it away.

Good morning, everyone. I'm delighted to see you once again. Dear shareholders, I'm delighted to show you our results -- environmental results in 2025 and look at our activity in 2025 at group level in all 75 houses. We base ourselves on Stage 1 of our Life 360 strategy for '21-'23 to roll out our programs on such key items as circular economy, traceability, biodiversity, climate and mobilizing stakeholders. Our commitment now is to reach quantified objective that we set for 2026 and 2030. We will continue this action doggedly not listening to local fashions that could put in brackets the environmental approach.

On the contrary, we believe that the climate disruptions have effects on biodiversity and water. And this is not on hold, and we can keep our ambition in terms of sustainability for all our operations because things are accelerating and so are we. Life 360 will be a robust strategy based on risk management, value creation. We're managing the risk of impact of the loss of biodiversity on our supply chains, but also we're creating opportunities and create new services to our customers based, in particular, on the circular economy. And it is this intrinsic nexus between environmental performance and value creation that evidenced the first edition of the Life 360 awards last year.

Our houses were asked to present new initiatives in terms of circularity, traceability, climate and biodiversity. There was a strong mobilization since as many as 187 sustainability solutions were proposed, all testifying to great creative innovation, out of which -- out of these, 13 got special attention. You see them on the screen. You have ambitious strategy for plastic-free packaging, new services for repair, regenerative husbandry. And this highlights the maturity of our environmental approach and the wealth of cooperations within the group, such as One Route, the joint logistics approach driven by Louis Vuitton and Rimowa in the U.S. to deliver their products to boutiques.

Over the year, Life 360 became an ecosystem for the benefit of houses, integrating sustainability in the daily practice, facilitating cross-cutting approach within various departments of the group, purchasing operations or finance, taking advantage of collaboration with the various stakeholders, but creating new tools and technologies to gain in terms of accuracy and robustness. This professional approach to sustainability has led to better profits in 2025.

On the circular economy, our houses accelerated their eco design to reduce the environmental footprint of products and packaging with the new aesthetics. For instance, Guerlain provided its iconic item, Orchidée Impériale with a charger, which is made up of 90% certified cellulose. 10 million products have such circularity products. You have the recrafted by Rimowa, which facilitates the repair of suitcases, their reconditioning or their total repair. This responsible sourcing for raw materials is the fundamental principle guiding our products. The rate of certification for strategic systems progress in 2025. We're continuing the rollout of the numerical Passport, which answered the call from the French government to try an Eco-Score for fashion goods. Boucheron was a case in point for 25 items.

We protect natural resources as well. We are reducing our use of water, acting to protect biodiversity, soil quality around the world. In 2025, we rehabilitated 4.3 million hectares of wildlife and with institutional partnerships, in particular, with UNESCO, we renewed the partnership in 2025. By broadening our scope of action with programs of regenerative agriculture, we've been supporting our own supply chains in husbandry agriculture and wine growing and regenerative is effective.

Look at these 2 pictures 2 days ago, on the same day at the same place, you in the south of France in vineyards producing rosé wine in 2025 during the heavy rainfall. On the left-hand side, Château Galoupet of LVMH. This vineyard is protected with soils made permeable, thanks to regenerative agriculture. On the right-hand side, you have another vineyard next to Gallupeau with traditional wine growing. The soil is waterproof. It doesn't -- is not in a position to retain water. And this adapting -- adaptation to climate disruption took us less than 3 years.

On climate, stringent new carbon trajectory validated by SBTi in 2025, our results in terms of carbon emissions on all our scopes provided us with an award. And I would like to congratulate our teams, Hélène Valade in particular. We got the AAA rating from the Carbon Disclosure Project, CDP. It's a great way of rewarding ambition and our transparent strategy. Renewable energies in our energy mix stands at about 75%, and we have many sites at Bulgari, Louis Vuitton and Christian Dior producing their own energy.

Mobilizing, of course, our shareholders is quintessential to achieve our objectives, and we train them at the Life Academy. And more specifically, we promote the acquisition of know-hows and especially for new luxury. We have a new culture of our trades that we share with our suppliers. And together, we work on our vision of luxury, the alliance between desirability and sustainability, looking after nature because, of course, the very exceptional nature of our products is due to mother nature itself. And our strength is to combine this linked with nature and our traditional and fundamental connection to know-how.

And of course, nature, culture and gestures are things that are deep rooted in time and are shared with all. And I'm proud to announce that on 16, 17 and 18 October next, we'll have the sixth edition of the special day, Les Journées Particulières. This is a chance for the public to go do a deep dive into our houses and discover the fine work of our craftsmen and have a look at the next edition of Les Journées Particulières.

Well, so I hope many of you will attend the special days this year. Over now to our statutory auditors.

Thank you, Chairman. Ladies and gentlemen, shareholders, good morning. I'm pleased to present on behalf of Deloitte and Forvis Mazars, the reports we've drawn up for your attention in respect of 2025. There are 8 reports on the annual financial statements, consolidated financial statements, related party agreements, 5 special reports relating to transactions on the share capital made available to you before this meeting. I propose to summarize them.

The annual financial statements subject of resolution 1 drawn up under French GAAP, and we considered that the assessment of assets and equity investments are key items, technical observation regarding the modernization of financial statements, and these were approved unreservedly. And then the consolidated financial statements, we considered the following 3 key audit matters, valuation of fixed assets, inventories, work in progress, provisions for contingencies, losses, uncertain tax position in our opinion. These give a true and fair view, and we certified them with that observation.

Fourth resolution, we issued a report on related party agreements. No new related party agreement was notified to us and agreements and commitments authorized in prior years remained in force also presented in our report.

Lastly, in respect of the extraordinary part of your AGM. We issued 5 reports concerning authorizations that might affect the future of your share capital, authorization to decrease the share capital, increase the share capital, grant stock subscription or stock options, issuing new shares. Our reports comprise no comments or observations on these operations that are consistent with the Code of Commerce. Ladies and gentlemen, Chairman, thank you for your attention.

Thank you. And I'm now going to give the floor to Stéphane Bianchi to present the answers to the written questions sent in to us prior to this meeting.

Thank you, Chairman. Ladies and gentlemen, shareholders, good morning. As with every year, we've received a great many questions forwarded as part of the scheme planned under the Code of Commerce as well as answers provided were placed on our website before the opening of the AGM.

Amongst the other questions we received, there are 3 broad topics that emerged, and I'll now address with you. A great many of you asked us about the impact of artificial intelligence on LVMH and developments linked to AI.

AI, its adoption and the acceleration of its rollout are, of course, part of our strategic challenges, but also our operational reality. For a great many years now, the houses of LVMH have built their technical foundation and implemented these new tools with a very simple and clear guideline to be at the service of the values of creativity, innovation excellence, spirit of enterprise and positive impact of our group worldwide. We announced at the end of '25, a major transformation plan, AI for all in order to accelerate further the take up of these new solutions within our teams. Maud referred to that a moment ago, and this plan rests on 3 pillars.

First of all, strengthened governance at group level and with our houses, with the framing of our practices, both technologically, legal, ethically and in supporting discussions on this matter that are evolving constantly. For that, we're fully leveraging our partnership with Stanford University in California.

Second pillar is a focus on strategic projects. We're prioritizing the fields of commerce, marketing and operations, always at the service of the customer experience. Many tangible applications are rolled out in the group in order to personalize and fluidify the relations we have. A figure to illustrate. 80% of our sales advisers use AI in their customer loyalty enabler. We've also informed our houses on operational issues. Less visible to our customers mean that we can constantly better meet their expectations.

In jewelry, for example, for certain special commissions and orders increasing in number, we've been able to reduce the cost estimate time from 2 months to less than a day, thanks to AI. However, our customers will always have to wait several months for our craftsmen to deliver their unique project. Ditto for leather goods. We've reduced fivefold the time it takes to estimate the cost of manufacturing a bag from a prototype.

Pillar 3, training, the importance of training and the cultivation of our team so as to onboard all our people in this transformation plan. 15,000 of our people have already been trained on data and AI. We also use and continue to use AI, serving our operational excellence. But of course, the human being remains at the heart of our creativity and know-how. And you'll see that notably once again, as Antoine said, during the special days organized this year.

Second question pertains to the partnership between LVMH and Formula 1 showcasing Louis Vuitton, TAG Heuer and Moët Hennessy. We're very pleased with this partnership that is just entering its second year, but seems to us to have been in place for a great many years given the path already traveled. We benefited from extraordinary visibility in 2025, notably across our 3 Grand Prix, Melbourne that launched the season with Louis Vuitton, Monaco, TAG Heuer and Spa with Veuve Clicquot. Each of our houses found or found once again their place on the circuits on the podium and the incredible ecosystem of Formula 1.

There again, the group's values are showcased to millions of fans worldwide, creativity, first and foremost, with new rituals for those of you who watch Formula 1. There was the cooldown room of Moët & Chandon that pleased Lewis Hamilton no end when he won in Shanghai. The experience a unique experiences offered to fans on social media, but above all, to the guests of each Grand Prix who live a unique experience, allowing our houses to invite their major clients. The money can't buy occasions that are quite remarkable. Demand is strong, and it's difficult for the various houses to select a happy, fortunate guests. So that meets the expectations for this partnership.

I'd like to thank our teams and those of F1 for their outstanding cooperation and their constant ability to innovate together. This year, we're going to surprise you once again, I hope, with new activations that will be unveiled during the '22 Grand Prix, more specifically at Monaco and SPA, where Louis Vuitton and Moët & Chandon will be prominent and the first in Madrid in September with TAG Heuer.

Last year, you asked questions about our continuing efforts in terms of vigilance and overseeing our supply chain, notably in Italy with events that occurred these past few months. We addressed this point at the last shareholders' meeting, and it's a good thing that this matter is addressed once again because the matter is fundamental for our group, and I say that unambiguously. It is mobilizing our ExCo, our teams and our partnership -- partners because we have the highest quality commitment with them. For several years now, we put in place prevention, social, environmental and ethical risks in our supply chains.

The procedures initiated -- proceedings initiated by the courts of Milan in '24, '25, which I won't return because the 2 houses concerned saw the measures lifted in an anticipated way, aimed at strengthening the operational implementation of these schemes, notably with our indirect suppliers. Following these events, the group immediately put in place a short and midterm action plan.

Firstly, an immediate reinforcing of oversight schemes with unprecedented audits in 2025, several thousand audit checks were conducted, a significant portion of which on our indirect suppliers so as to prevent any breach and then heightened surveillance of the full supply chain. These resources were allocated by the group to the houses, the holding company with a strengthened team of internal auditors.

We reinforced our duty of care with the setting up of a vigilance committee placed under my direct supervision whose members come directly from Executive Committee. This committee sets out our strategic policy in terms of ethics, human rights and environment and ensures the consistency and efficiency of existing policy of strengthening risk assessment and rolling out prevention measures across the group's and houses supply chain. It's based on a team made up of the major departments in line with these and coordinated by the Ethical and Compliance Head of LVMH.

Lastly, with the teams and Industrial and crafts division set up in September 2025, operational follow-up close to strategic partners was put in place with systematic regular on-site visits, traceability control, assessing production capabilities and reinforced training plan. Ladies and gentlemen, shareholder, thank you for your kind attention.

All right. Then we can move on to questions from the floor. If there's anybody in the room with a question, please introduce yourselves before asking your questions.

Good morning. My name is [indiscernible]. I've been a shareholder for many years, and we've experienced a number of crises since 1998, and I'm still around. I really do admire Mr. Arnault, your unique talents as an entrepreneur. All of France should be proud of you. But I would like -- first a good start. I have a few questions, LVMH and the Chinese market.

How are you handling the new threats? You have the boom of quiet luxury, luxury shame, the anticorruption and anti-bribery policies of the government, the rising power of secondhand platforms and of course, the negative attitude towards luxury groups. How do you resist this? And then the big question is, Bernard Arnault and his 5 children trying to protect the best interest of the group, how do you propose to manage the ambitions of your 5 talents that are on the highest step of the podium?

And finally, Bernard Arnault on the ground, you've been paying regular visits to shops and boutiques. Can you share with us your checklist of what one should do and what should not do to please your expert eye? And then finally, many thanks in advance to your questions, but then a bonus question, if I may. How is Einstein a mentor for you?

Well, let me take the last question first. Einstein was a genius and probably the greatest genius of all times, at least that's what I feel. But also I love this quote, "imagination is more important than knowledge." Now on China, China is, of course, a very important market. It is becoming, in a way, more professional and the customers are more and more knowledgeable about our products. They are more and more demanding. And this is excellent for LVMH because a few years back, it was easy to go to China, put up a brand on a product and you could sell it no matter what. This is no longer the case. Now you have to come up with quality. You have to have a culture, you have to have the right -- to be at the right place with the right people. And this is a very important work. It's our second largest market after the U.S. And so I'm very confident and not too concerned about future developments of that market where the outlook remains very promising indeed.

Our children, you've seen them. Do they look very ambitious? I do not know. It's for you to tell me, but the outlook -- and since I would like to say this once and all. Last year, I was renewed by the shareholders for another 10 years. So we'll take this up 10 years from now.

And then visits to shops, and this applies for all our people. It is important to be there on the ground, because this is where we can see how things really work and how people really respond to our business. And I see this every day. And every time I learn something new, I meet the people in charge of running the stores, and this is my chance to assess their work discreetly. But then I can also see how customers respond. Many come to talk to me. Sometimes I myself will sell products because there are so many people that you need more salespeople. Sometimes I look after visual merchandising. I've been told I was pretty good at this. Some people want to hire me to do this. I'm afraid I haven't got quite enough time for that, but it's most exciting.

So it's essential to be there in -- not just in stores, but also in workshops. I recently went to visit the logistics platform, Pérou. And believe you me, this is unique. It was all started by Michael when he was running Vuitton. This is something quite fabulous, and we are years ahead of the competition. And likewise, with [indiscernible], with Véronique. So many thanks. Is there another question?

Maybe number one.

Hello, ladies and gentlemen, I come here from Toulouse. Would it be possible to have a shareholders' meeting in our town instead of Paris for local customers.

Well, I suppose next year, we could organize the AGM. I don't know if everybody would be happy with that, but I have no objections. I raised a very possibility with the legal department. There's one nice place in Lille called Diplodocus. And that's where I started my shareholders' meeting back when I took over Dior. There are quite a few people already, but I don't know if everybody wants to go to Lille. But anyway, we could put that to the vote. But every once in a while, why not? Yes, further questions?

I've been a long-time shareholder. Again, congratulations on our past performance. You are certainly keeping up the performance and we'll talk about succession in 10 years' time. On Wines & Spirits, could you give us a comment on acquisitions, M&A activity? You have one of your smaller colleague, [indiscernible], who may comment on that.

Well, I'll ask Jean-Jacques Guiony, who knows about shareholders' operations and M&As and he runs Moët Hennessy now.

Well, thank you for this question. It's a bit sensitive. I mean, you're referring to operations that do not concern us, [indiscernible], but this bears witness to the fact that the Wines and Spirits business is experiencing changes, especially for entry-level players. Even though they cover the entire range, their entry level is quite low, and there is tough competition. And that usually means that people try and come together. There's consolidation to generate synergies, generate savings and remain competitive.

We're not in that entry-level business, our own rating is super premium plus. So the starting price is upwards of EUR 30 or $30. So we are not in that part of the business. And so we are not -- we don't have this concern about cutthroat competition and the obsession with costs. And thank God for that because we have a very successful business model, and we don't need to get involved in such operations.

I see microphone #6.

Good morning, Mr. Arnault. It's a huge honor to be -- to take part in this second AGM and talking with you. It's a very emotional moment. I came this morning from Colmar just to see you. I'm 25 years of age. I hold a few shares, and I'm looking 20 years down the road or more. But my big question is about the future of the group and the desirability of the houses, the acceleration of our group towards a more experiential approach. Can you tell us -- can you comment about the hospitality business and events that would take us away from just physical products?

And on capital operations and share buybacks, the share price came down after the war in the Middle East. In view of the cash flow generated by the group, that would be an entry point for your group to engage in share buybacks that would enable you to acquire these shares at the best time. And then an additional question, could we have a selfie with you at the end of the AGM?

Well, thank you for the question. But about the picture, you may have one, but not everyone otherwise will never be out of here. In the hospitality business, we already have -- I mean, the Cheval Blanc brand was created from scratch, starting with a hotel in the French Alps 15 years ago. And that brand developed. And then we have another brand used to be called the Orient Express called Belmond, and we acquired them and they have outstanding features at Cipriani in Venice, Copacabana in Rio and such like. And so there, you have -- well, it's a humble start, but there, we are diversifying our businesses. And indeed, while this may seem intangible, we are right in touch with our customers.

Our customers, those, for instance, who purchase or buy wines and spirits will be there. And indeed, in these various hotels, we have shops so we can sell these goods. They are Dior Spas in Berlin and such like. And so we are developing that sort of a sideline, but in a gradual way. We are -- well, I won't tell you exactly where, but with Michael Burke, who's been running our group in the U.S. and he's been working with us for some time. And I think he's the longest-standing member of the group working with me for all these years. And now we are looking at a very exciting plan, something to do in Florida, opening a Cheval Blanc hotel in Florida. And if this happens, we can give you details at the next AGM.

It will take probably several years to build that. But still, this is something quite exceptional with a remarkable architect. So what I'm trying to say here, what I would like to do is exceptional things. It's not -- we don't want to buy to acquire Novotel. I mean we do have plans, but they have to be targeted and they have to remain within our own environment, and we have to provide the best of the best in hospitality. We have the Copacabana that we are renovating in Rio. Part of it has been completed. It's one of the finest hotels in the world, and it will be even better with that.

Now share buybacks, we have been engaging in that. We've done this. And by the way, well done for buying shares. This is the best time. So I've been doing this myself at my own scale. So anyway, within the group, we've been -- well, we'll be buying shares? Can we?

Yes, last year, EUR 1.6 billion worth of shares. We canceled some of them and the other -- and then the others were left for the employee share program. And then we have a plan to buy back EUR 1 billion worth, and a part of that will be canceled as well. So even though we have a clear plan, I mean, that all these buyback programs are public.

We'll take a question from the room, the whole next door before moving to the cocktail reception. I understand there is a buffet as a gift. That's for after.

Chairman, I have a question. On this point, India seems to present quite good potential growth. How is LVMH positioned in terms of that opportunity? And is that a strategy planned for the long term?

I'm going to ask Stéphane to answer your question. It's true that it's the most populous country at the present time, and it is quite striking. But there is a problem today. The customs duties that are extremely high for our products as we don't plan to manufacture on site. It's not easy.

Thank you, Chairman. We do already have stores, but you said it all. I don't really have much to add, but it's precisely my answer. Indeed, we have a few stores. Bulgari, that's quite well established in India. Now the Indian market, we're also addressing it abroad because there are great many Indians who buy our products abroad in all our houses. And why? Because in India, when you want to import products there, the taxes are such that it's extremely difficult. So Mr. Arnault indeed has answered your question.

There's one question we haven't had that I'm going to ask because I think it interests many participants. And what are you going to do with La Samaritaine department store? And Mr. Patrice Wagner here present, who's tremendous developed Le Bon Marché in an extraordinary way has just taken it over. And so he said, well, it's going to become one of the finest successful department stores on the right bank. So of course, I mean, there were articles saying that we're not going to keep the Samaritaine store, but don't take any notice of that. In most cases, they're talking through their hat.

But of course, we're going to keep La Samaritaine. That's an extraordinary asset, a wonderful building, and we're going to make it work because up till now, it was a bit weakish on the -- so we -- shall we say. But with Patrice Wagner, I'm sure and his team, of course, we're going to achieve something great. Now vote, please. I'm told that we have to vote on the resolutions. But I think there are a few resolutions than last year. Let's turn to the resolutions.

So first resolution, approval of the financial statements. Please vote now.

[Voting]

Very good. That's a strong majority in favor. Next resolution to approve the consolidated financial statements for FY 2025.

[Voting]

Resolution 3, allocation of net profit for the FY and determination of dividend. Please vote.

[Voting]

Resolution 4, statutory auditor special report on related party agreements. Please vote.

[Voting]

Fifth resolution, renewal of Delphine Arnault's term of office as director. Please vote.

[Voting]

Well done, Delphine. Congratulations. Resolution 6, renewal of Wei Sun Christianson's term of office as director. Please vote now.

[Voting]

Congratulations, Wei. Resolution 7, renewal of Marie- Josée Kravis' term of office as director. Please vote.

[Voting]

Well done, Marie- Josée. Resolution 8, renewal of Laurent Mignon's term of office as Director. Please vote.

[Voting]

Congrats, Laurent. Ninth resolution, renewal of Natacha Valla's term of office as Director. Please vote now.

[Voting]

Congratulations, Natacha. Now appointment of Ariane Gorin as Director and propose before vote to show you an introductory film. Please vote now.

[Voting]

Well done, Ariane. 11, renewal of the position as a lead observer, Diego Della Valle.

[Voting]

Well done. Then renewal of Lord Powell's [indiscernible]. Please vote now.

[Voting]

Well done, Charles. Resolution 13, approval of the compensation of executive officers. Please vote now.

[Voting]

Resolution 14, Compensation of the CEO for 2025.

[Voting]

Resolution #15. Compensation of members of the Board. Please vote now.

[Voting]

Resolution #16. Compensation policy for the Chief Executive Officer. Please vote now.

[Voting]

Resolution #17, authorization to the Board to acquire shares of the company.

[Voting]

Resolution #18, authorization given to the Board to cancel shares. Please vote now.

[Voting]

Resolution #19, authorization to be granted to the Board to award bonus shares without preferential subscription rights for shareholders or shares in issue for the benefit of employees or senior executives. Please vote now.

[Voting]

Resolution #20, authorization to the Board of Directors to award share subscription options without preferential subscription rights to employees or senior executive officers of the company or related entities.

[Voting]

Resolution #21, delegation of authority to be granted to the Board to issue shares and/or securities giving access to the company's share capital without preferential subscription rights for shareholders reserved for members of the company or group savings plans.

[Voting]

Resolution #22, delegation of authority to be granted to the Board of Directors to carry out capital increases without preferential subscription rights for shareholders reserved to categories of beneficiaries comprising eligible employees and executive officers of foreign subsidiaries.

Please vote now.

[Voting]

Well, thank you, ladies and gentlemen. And now you're invited to refreshments -- there are no refreshments. Apologies, no refreshments.

Ladies and gentlemen, good afternoon, and thank you for joining today's conference call. I'm Rodolphe Ozun, Director of Financial Communications at LVMH. And with me is Cecile Cabanis, our Chief Financial Officer.

Cecile will start by taking you through the key highlights of the first quarter, and I will then comment our performance by business group, after which Cecile will conclude, and we'll be happy to take your questions.

As a reminder, certain information to be discussed on today's call is forward-looking, subject to important risks and uncertainties that could cause actual results to differ materially. For these, I refer you to the safe harbor statement included in our press release and on Slide 2 of our presentation.

Turning now to our announcement. Our release was issued a short while ago in French and English and is available on the website, lvmh.com, as are the slides for the call. Let's now move on to today's topic, our first quarter 2026 figures. And passing over to Cecile, who will comment the key highlights for this quarter.

Thank you, Rodolphe, and thank you all for joining our Q1 results call. Starting with a few comments on the first 3 months of the year on Slide 3.

As you see on the chart, LVMH continued to grow organically in Q1 with improved trends across most businesses. The quarter was impacted by the ongoing conflict in Middle East, which had a tangible incidence on demand in the region in March after a good start of the year, and this accounting for a negative 1 percentage point on the growth of the quarter. So excluding this impact, organic growth would have been plus 2%.

On Middle East, I would like to thank all the teams and the partners locally who had an incredible reaction, protecting our teams and consumers, which is our priority, and helping business to continue.

Elsewhere, Q1 saw solid growth in China and Asia at large as well as in the United States. Rodolphe will comment divisions' performance in more detail, but in a nutshell, I would highlight for the quarter. A good Chinese New Year, a good response to product innovation and creative renewal in Fashion & Leather Goods, and particularly a good start for Jonathan Anderson products at Dior. A good performance of our star brands in beauty. An excellent performance of our jewelry, Maisons, with Tiffany's transformation progressing very well, and another good quarter for Bulgari. And finally, a solid momentum across markets at Sephora.

Let's move to the revenue bridge for the 3 first months of the year on Slide 4. Group revenues reached EUR 19.1 billion in Q1, up 1% on an organic basis, down 6% on a reported basis. The euro strength against key currency generated a negative 7% currency impact in Q1, which continued to have also an unfavorable impact for tourist sales, especially in Europe.

Slide 5 details the geographic breakdown of revenues in euros. Asia and Europe both grew in the mix slightly to 32% and 16%, respectively, while France, Japan and the U.S. fell by 1 point and other markets remained stable. This being reported numbers, meaning euro, several changes reflect currency fluctuations rather than underlying, notably when it comes to the U.S. Overall, the footprint of the group remains very balanced.

Let's move to organic performance by region on Slide 6. You can see the strong performance of Asia, excluding Japan, which is up 7% at constant currencies, driven by growth across divisions, in China and North Asia in particular. Europe and Japan are both down 3%, partially reflecting less dynamic tourist consumption, notably in Europe. U.S. momentum improved sequentially to plus 3%, driven by Watches & Jewelry, Fashion & Leather Goods and Selective Distribution.

Let's now go to the detail of the division with Rodolphe.

Thank you, Cecile. Let's start with Wines & Spirits. Slide 9 shows the Wines & Spirits business group delivered EUR 1.3 billion in revenue for the first 3 months of 2026. This represents a 5% increase on an organic basis and a 2% decrease on a reported basis after taking into account negative 7% currency effect. Broken down, Champagne & Wines generated EUR 663 million in revenue over the period, whilst Cognac & Spirits generated EUR 610 million. And both segments increased 5% on an organic basis.

On Slide 10, we share some of the highlights of the quarter for this business group. Champagne & Wines saw strong performance, notably for Champagne in prestige cuvees from Ruinart; Dom Perignon, which released its 2017 vintage; and Krug with the release of 2013 vintage. Veuve Clicquot also unveiled La Grande Dame 2018 Rose. And Moet & Chandon returned as the official champagne of Formula 1.

The quarter benefited from the early phasing of Easter in Europe and from favorable timing of price increases in Japan. And as a result, Q1 performance should not be extrapolated. But all Champagne brands grew in Q1, inventory levels are healthy, and it seems fair to say this is a good start to the year for our Champagne business.

Rose Wines also delivered a good performance. Chateau d'Esclans released its 20th vintage of Whispering Angels, while Chateau Galoupet achieved one of the world's most rigorous standards for sustainable agriculture with the Regenerative Organic Certified status.

Meanwhile, Cognac also saw improved trends at the start of the year, supported by the phasing of Chinese New Year, which more than offset soft U.S. demand. And finally, Spirit brands unveiled several unique innovations, among which Glenmorangie's oldest single-malt whiskey expression to date named The Thirty.

Now turning to Fashion & Leather Goods on Slide 12. Revenue reached EUR 9.2 billion for the first 3 months of 2026. Organic growth improved sequentially to minus 2%, driven by an improvement in American and Chinese demand, partially offset by the Middle East. After a negative 7% currency impact, the division was down 9% on a reported basis.

I'm now on Slide 13, which lists the key highlights of the quarter by brand. This year sees Louis Vuitton celebrate 130 years of the Monogram designed by Georges Vuitton as a tribute to his father Louis, founder of the Maison and which continues to transcend generation. The brand also continued to progress on strategic retail initiatives with the opening of the LV The Place Seoul, one of the Maison's largest flagships, pictured on Slide 7, which pays homage to the City of Seoul in Korea and to Vuitton's history, creativity and savoir faire through a range of immersive experiences.

Finally, Vuitton also unveiled new and successful collections by Nicolas Ghesquiere and Pharrell Williams.

Christian Dior saw the arrival of the first products designed by Jonathan Anderson. And although they still accounted for a small portion of the mix in the first quarter, they're off to a very good start across regions and product categories. After Seoul and Bangkok, Dior celebrated the opening of a third spectacular concept store, the Bamboo Pavilion in Tokyo, which you have on Slide 23, offering the opportunity to shop, dine and discover the work of local artists and artisans, among other experiences.

Most recently, Christian Dior and UNESCO renewed their partnership, Women@Dior & UNESCO, which fosters women empowerment through concrete actions aimed at education and the transmission of savoir faire.

A few highlights to conclude on Fashion & Leather Goods, from several of our other Maisons. Loro Piana unveiled a new yarn and fabric called Royal Lightness, which complements the brand's range of exquisite fabrics such as the Gift of Kings. Celine continued to improve sequentially, driven by new products and Michael Rider's collection. Fendi, Givenchy and Loewe also all continued to unveil new creative visions. And finally, Rimowa expanded its iconic classic range with a permanent titanium hue.

Moving to Perfumes & Cosmetics on Slide 15 where you have the bridge. Revenue reached EUR 2 billion for the first 3 months of 2026 and was flat on an organic basis and down 6% on a reported basis, after taking into account a negative 6% currency impact.

On Slide 16, more details on the brands. Perfumes & Cosmetics business group saw good performance from its largest brands, starting with Parfums Christian Dior, which continues to perform well, notably in makeup with the recent release of 2 new foundations in its Forever range: Skin Glow and Skin Wear Foundation.

Women's Fragrances also enjoyed strong growth, led by recent launches, the latest fragrance in the J'adore franchise, J’adore Intense, created by Francis Kurkdjian, as well as 3 new Addict perfumes. Lastly, in skincare, Dior saw good growth from its flagship range, Dior Prestige.

A few words on some of our other brands. Guerlain enjoyed a very strong start to the year across all categories and, notably, fragrances, driven by L'Art & La Matiere and Aqua Allegoria collections, and saw continued success of its Rouge G lipstick. Finally, Parfums Loewe and Maison Francis Kurkdjian also continued to deliver strong growth.

Now to Watches & Jewelry on Slide 18. Revenue came to EUR 2.4 billion in the first 3 months of the year, up 7% on an organic basis and down 2% on a reported basis after taking into account a negative 8% currency impact. Our Maisons continued to enjoy a very strong response to the development of their iconic lines, notably jewelry. Tiffany saw a very good start to the year, driven by strong momentum in fine jewelry, in particular, HardWear, Knot and Sixteen Stone collections, which continue to resonate with consumers and expand rapidly.

High Jewelry also enjoyed strong growth with 2 collections in this quarter, Bird on a Pearl 2026 and Love Birds by Tiffany. The store renovation program progresses and yields results according to plan with tangible outperformance from new stores, including New York's flagship store, The Landmark, which opened 3 years ago. Lastly, Tiffany announced Natalie Portman as its new house ambassador and unveiled a new campaign film centered on the Many Facets of Love.

On Bulgari, the brand also delivered another strong quarter of growth, thanks to the excellent performance of its iconic lines: Serpenti, Tubogas and B.zero1, and to a good momentum across all regions. Bulgari unveiled its latest high jewelry collection, Eclettica, which features 128 new high jewelry designs and a selection of exceptional watch creations. Finally, the brand launched a new collection called Vimini, derived from a bracelet designed in 1942. This is the first chapter in a new Bulgari Eternal range, which merges archival pieces with modern creations.

Chaumet unveiled the fresh modern take on its honeycomb-inspired Bee collection and announced a partnership with WWF. And Fred celebrated its 90th anniversary, unveiling 17 new high jewelry creations around its Force 10 collection, which was first created in 1966.

A few words to conclude on watchmakers, starting with TAG Heuer. Once again, official timekeeper of Formula 1. Saw good growth in its high-end Carrera range. Hublot returned as official timekeeper of The Snow League in Aspen and launched a Big Bang Meca-10 Aspen One, which is powered by an in-house movement with a 10-day power reserve. And lastly, Zenith unveiled several new additions to its DEFY collection.

Now looking at our final business group, Selective Retailing, on Slide 21. Revenue in the 3 months period reached EUR 4 billion, representing a 4% increase on an organic basis and down 3% on a reported basis after taking into account a negative 8% currency impact.

Sephora saw solid growth across its markets and continued to expand its store network, notably in North America as well as in more recently opened markets like the United Kingdom with its first store opening in Northern Ireland in February. The Sephora beauty celebration event, SEPHORiA, also brought beauty lovers together in Los Angeles for the first time since 2019.

DFS remained focused on controlling costs and optimizing its store network. As you have seen at the start of the year, DFS and China Tourism Duty Free Group announced an agreement for the latter to acquire DFS business in Hong Kong and Macau, along with intangible assets in Greater China. And more recently, DFS also signed an agreement to sell its travel retail concessions in Los Angeles International Airport and San Francisco International Airport to Duty Free Americas.

Le Bon Marche finally continued to offer its consumers exclusive, distinctive concepts and a diverse range of products alongside a rich array of cultural events.

This ends the business group presentation, and I'll hand back to Cecile for the conclusion of this presentation.

Thank you, Rodolphe. A few words to conclude this presentation before we switch to Q&A.

First, despite the macro context, you can see and you have heard that Q1 showed very good progress across most businesses. First, the quarter highlights the merits of our focus on iconic products, both old and more recent, across business groups, from Vuitton's Monogram 130 years young, to more recent HardWear at Tiffany, which is fast emerging as a brand very large and dynamic franchise.

We also continue to observe that consumers respond well to creativity and newness in product, but also stores and experiences, as demonstrated by an improving conversion rate across our largest brand.

In a context that we can all agree will remain highly volatile in the coming months and particularly disrupted, we remain confident on growth and committed to deliver long-lasting efficiency. Thank you very much, and I will now be happy to take your questions.

[Operator Instructions] The first question is from Anne-Laure Bismuth, HSBC.

Anne-Laure Bismuth from HSBC. I have 2 questions, please. First, can you give us some indication about the performance by clientele for the Fashion & Leather division, particularly for the Chinese cluster given the strong improvement you have seen in Q1 in Asia for the group?

And the second question is about the performance for the Fashion & Leather division by brand. Any brand that you would like to point to that performed much better than you thought? And would it be fair to assume that the Dior brand did better than the average in that quarter and LV brand was in line or slightly lower the average of the division?

On clientele, maybe before I go in the detail, the first point to notice is that, overall, the local clientele are slightly positive and the touristic clientele are mid to high single-digit negative. Then maybe the best way to take you through the evolution is to look versus Q4 last year.

So if you look at the progress we made, we overall, we gained 1 point. And this point is made with 3 tangible moving parts. The first one is on the American clientele that has been improving from slightly negative in Q4 to low to mid-digit positive in Q1, and this accounts roughly for 1 point.

The second one, and you mentioned it, is Greater Chinese, which improved from low to mid negative in Q4 to flattish in the Q1. And in this flattish, you have the local Chinese that are growing very solidly, and then the touristic which is still slightly negative. And finally, the other major impact will be on Middle Eastern turning negative double digit this quarter. So this would be your main movements.

And then if we go through the rest of the clientele: European are flattish; Japanese are down low to mid-single digit; and other Asian nationalities are down mid-single digit. But within that, you have Korean that are positive and Southeast Asia that are below the average. So that would be overall the clientele performance and their evolution and the 1 point improvement that we've been seeing in Q1.

On the brand, for the Q1, both LV and Dior are very close. They are very close of each other, with Vuitton continuing to be more resilient than the average and Dior improving quite a lot versus previous quarters. Then you have Loro Piana still growing double digits. And then Rimowa is also outperforming the average. And the rest of the brands are below the average. So that's for the brand.

The next question is from Zuzanna Pusz, UBS.

So I have 3. So maybe first of all, actually a follow-up on the Middle East. Because you mentioned in the press release that at the group level, there is a 1 percentage point negative impact. But I was just wondering, is it the same case for Fashion & Leather Goods? I'm just wondering if it's not a bit bigger given the -- that you mentioned the cluster is down double digits.

Then secondly, I was just wondering if you could tell us maybe anything about the drivers of sales at Fashion & Leather Goods. So if you can maybe mention what was the more or less pricing year-to-date? Was it, I don't know, up low single-digit mix? And anything you could mention?

And then thirdly, I appreciate it's probably a bit difficult to comment because this is a revenue call, but is there any indication you could tell us how we should think about the margins, especially for Fashion & Leather Goods, in this context? And maybe specifically, I guess we've had some questions from investors if there is any disproportionate impact, any margin difference of Middle East versus rest of the world, specifically again for Fashion & Leather Goods.

Thank you, Zuzanna. On Middle East, overall, if you look at the mix within the group sales, it's around 6%. You're right to mention that it's not for every division the same. So it's much less for Wines & Spirits. It's more for Watch & Jewelry. It's even more for Sephora. And Fashion & Leather Goods is just a bit more than the average, but quite close to the average. So that's for Middle East.

On the growth component of F&LG in the quarter, you have around 2% price impact. The mix is slightly negative and the rest is volume. So the main movement is volume. And if you consider outside of Middle East, volume is improving quite nicely.

And then on your question on the margin, yes, it's a bit early because there are still a lot of uncertainty, especially when it comes to the scale and the outcome of the Middle East conflict. That said, the first element you need to take into account for the margin is the currency impact, which is going to be in line with what we shared in the full year results, around 80 bps negative for the first half.

And then on the organic, we said that we needed 3% to 4% organic growth in order to stabilize margin. We could maybe do it with a bit less. But if you go too flattish or slightly negative, then it will have an impact on organic margin. Obviously, we're working on cost and on mitigation measures.

The next question is from Thomas Chauvet, Citi.

I have 2 questions, please. The first one on the U.S. and the improving trend here. We've seen several data points, including luxury credit card data, showing a strong Q1 spend in the U.S., including in March. Could you comment maybe on the U.S. performance for your key businesses and say whether you've seen changes in March in traffic, in conversion after the war in the Middle East started? And maybe comment also on Europe, whether the European consumer, the local consumer is behaving differently in March and perhaps early April?

And secondly, on Asia ex Japan, plus 7% in the quarter. I think that's the best quarterly performance really since the end of '23. Are you seeing here on the ground any change? You talked about the Chinese cluster for F&L improving nicely. Are you seeing any change in the mood, in the traffic on the ground? Give us some color maybe on the underlying performance of the key division if we strip out the Chinese New Year impact on Cognac.

Thomas, the trend in the U.S. and with the American clientele is quite homogeneous on the quarter. So to your question, we didn't see any specific disruption linked to the start of the conflict. And the improvement has been throughout the quarter. And indeed, on local clientele, we are quite happy with the performance.

On the EU, actually, the Europeans are resisting and quite resilient, because the European clientele is only slightly negative. But you still have the impact on the touristic clientele because of your currencies. And you might have some disruption also, it's very difficult to address, on some specific tourism because of the conflict.

Then your question on Asia, plus 7%, you're right to mention that it's the best quarter since 2023. And it's good because it's broad-based. One thing to -- maybe to notice is that also Sephora is flat this quarter on the Asia cluster and especially China, which was one of the geographical areas that we were fixing for Sephora. So it's good to see that it's rebounding.

And on the underlying in terms of clients, first, in China, we see good response to the newness and the products, especially what we have been starting to put in store for Jonathan Anderson on the Dior side. Second, in Asia, you know that we've opened in Seoul The Place, which is the new flagship from Vuitton. There was a picture, I don't know if you saw it on the presentation. And this has reconnected the Korean and rebounded the growth for Vuitton in Korea, which is an important market. So this is also a very good outcome.

The next question is from Antoine Belge, BNP Paribas.

It's Antoine Belge at BNP Paribas. Three questions, if I may. So first of all, coming back to the impact of the Middle East, I think you said down double digit, but is it possible to be a bit more specific on the month of March? Was it down 30, 50? And also, are you seeing a bit of an improvement early in the quarter? And also if minus 1% is the impact from 1 month, do you think that minus 3% would be the impact on the full quarter?

My second question is about the newness. Is it fair to say that in the second quarter, you expect more availability of product from Jonathan Anderson in stores? And also, can you talk a bit more about the product pipeline at Vuitton? This is the 130th anniversary of the monogram, but what is it translating into? And is there, beyond Q2, a certain pipeline of product to be aware of?

And my third question is about China or Chinese. There is a bit of a disconnect in my view, if I may, between a flattish Chinese cluster on a good Chinese New Year. So I don't know if you could explain a little bit. And also what's your view more broadly about Chinese consumption? There was this idea that comps were easier for 4 quarters, but the macro was still challenging. So any updated view on China for this year?

Middle East, maybe I'll put it simple so that you can have an easy idea of the impact. If you take the group, it's overall 6% of the mix. I've said earlier, there are plus and minuses depending on the division.

When the conflict started in the month of March, there was a shortfall and a deterioration of demand between 30% and 70%, depending on the malls, depending on the businesses. So overall, if you take a 50% deterioration, then you can have the overall impact, which would be indeed 3 points in March and 1 point on the quarter.

I think the outcome, it's anybody's -- probably anybody's guess. What we have not seen yet is repatriation. And what we know is that the wealth has not evaporated. So there will be a time where we'll see that coming probably elsewhere and mitigate the impact should the conflict continue.

On the newness, so the first drop of Jonathan Anderson came in Q1, as we explained it will. It was mostly ready-to-wear and it was not the full collection. So yes, we expect more to come gradually also on the bags and the shoes. So it will continue to come to the stores in the coming quarter.

On Vuitton, actually, the 130 years monogram anniversary was not supposed to be a commercial event, but it did yield quite good results with also a correlated impact on the classic monogram. So it's been having some response. And I think Vuitton has demonstrated that it can nourish its client both with product and with very unique retail experience, which will continue in the Q2.

On China and Chinese, yes, it depends how you look at it, obviously. But if you look at where we came from, the Chinese cluster has improved quite nicely, with Chinese clientele locally being -- growing solid in the Q1. And we have improved quite significantly the touristic part of the clientele, but it's true that it's still negative. And we'll continue to ensure that we do what it takes in order to gradually improve.

The next question is from Edouard Aubin, Morgan Stanley.

So 3 questions, if I may. So the first one, Cecile, on Fashion & Leather Goods. Your comparison basis is getting quite easier in the second quarter. You're going to have less of a Murakami headwind in Q2 versus Q1. I'm not asking for guidance, which you would not provide anyway, but can you just help us, with the kind of tailwinds and headwinds we should have in mind, the technical factors when we are looking ahead at the second quarter, knowing that you don't have a crystal ball last time I checked?

Number two, on [ Dior ], so you kind of indicated that, I guess, the brand came in a bit below the division, so maybe down minus 3% in the first quarter. One of the competing leading luxury brands is kind of enjoying a moment, which seems to have kind of intensified in March. To what extent the exit rate might have been impacted for Dior in terms of the -- because of the competitive dynamics? That would be my second question.

And then lastly, sorry, you gave us -- and thank you very much for the indication you provided big picture by brand for Fashion & Leather Goods in Q1, which basically confirmed that we are a bit in a K-shaped economy where the brands more exposed to high net worth individuals seem to be clearly performing better. And so it's a bit of a difficult question. But in that context, can Vuitton, which is obviously a very large brand, print positive growth if the sector continues to have difficulty recruiting from the middle-income consumer. To what extent is that an issue for Vuitton this year?

Maybe the easiest for you to have an idea on how to look at what could be the sequence in the Q2 would be to give you one data point, which is in March. If you remove the impact of the conflict, Fashion & Leather Goods would have been flattish in terms of growth. There is no other than this one which is quite a big one. There is no other technical impact at this stage to take into account for the quarter. The only thing that you have to take in mind is that, as I said, consumers respond well to the newness, the products, the store.

There are improvements in many markets, especially U.S., as we said, and China. We have local clientele as well, which is positive, and that is a very good signal. And overall, you have a divergence between regions that is decreasing. So it's more homogeneous than what we had seen in some of the previous quarter.

On your question about Vuitton, if your question is current momentum, again, here as well, we have improved trends in many places. We've discussed several recent facts on retail, whether it's the 57th in New York, The Louis in Shanghai, The Place, the 130 years of monogram. And the continuation of the double entry strategy will continue to gradually improve and accelerate, and we will continue to accelerate, at the right pace.

If your question is more philosophical, I think, we really need not to enter into a collective anxiety about Vuitton. Because if we look at the brand, it's been leading in all key markets for many years. It's been more resilient than many in hard times. It has unparalleled competitive advantage on all what matters. And it has always been able to nourish clientele and is continuing to do it with the best operating model -- the best-in-class operating model, the best-in-class inventivity when it comes to retail products and creativity. So we are very confident on Vuitton's ability to continue to improve and we have no worry about the growth at Vuitton.

Just one point on both Dior and Vuitton, we never said they underperformed division average, by the way, just factually.

The next question is from Luca Solca, Bernstein.

My first question is on Dior. When we look at our social media analysis globally, we seem to be getting a bit of a spiky performance in terms of where Dior is now getting traction, with social media in the West reporting better performance than social media in China. The feedback from the field in China is weaker than what we got from the West. I wonder if you could confirm this or maybe disprove it. And if there's anything down the road that could potentially further strengthen the Dior recovery in China.

Then a question on the exit rate as far as the Middle East is concerned. While I realize that this was only a month, so the month of March, we seem to assume, and I would tend to assume that there was a much bigger impact in the first few days or in the first few weeks of the conflict, and that things have gone back to almost normal as we moved into the latter part of May -- the latter part of March and the beginning of April. I wonder if you implicitly were pointing at this trend being correct.

And then last but not least, I assume that there was not a major impact from new stores and new space in the quarter for Fashion & Leather Goods. Please confirm me if I'm wrong or right.

On Dior, we actually see a very nice performance and product reception on both U.S. and China. The performance is a bit less good rather in Japan and Europe, but like a bit everyone else given the impact of the tourism. But on both U.S. and Chinese, it has improved markedly versus previous quarter.

On your mention on the Middle East, well, at the really beginning, there was full closure of stores. What we see today is still that demand is very much down. Remember as well that the retail repartition is not even. So there are very strong touristic malls where some of the brands have stores that used to be in the top 10 or top 20, and these are still very strongly impacted. The one that is resisting better is Sephora, because Sephora in Middle East is also having a big presence in Saudi, and Saudi is better and more resilient in this time. But overall, we still see a significant downside demand in the touristic malls.

And then on the impact of the new stores, I think, all of them are performing quite well. And I mentioned Vuitton because The Place is really doing very well. It's kind of the same impact at The Louis. And The Louis continues to perform very well, by the way. And it's in a very important market where it reconnected the brand also with Korean with a lot of success. So we are very happy with that.

The next question is from Charles-Louis Scotti, Kepler Cheuvreux.

I have 2, please. The first one, on Watches & Jewelry, the growth was solid at plus 7%. But if my estimates are correct, this appears to broadly reflect the embedded pricing impact. Could you please provide more detail by segment between Watches & Jewelry? And in particular, did the Jewelry volumes grow during the quarter?

And my second question, there have been several press rumors suggesting that you may consider divesting some of your beauty brands, such as Makeup Forever or Fenty Beauty. Can you confirm whether you intend to rationalize your beauty brands portfolio?

And also regarding the Wines & Spirits, the sector also appears to be entering a phase of consolidation. Could you participate in this trend in one way or another?

Thank you for your questions on Watch & Jewelry growth. So there have been some price increase, but you need to be careful when you look at it on the facing value because it was on specific range and specific products. So overall, yes, there is volume growth.

And I would really like to take the opportunity to thank the team at Tiffany and at Bulgari. On Tiffany, the transformation is really progressing well. We are now around 60% on fine jewelry growing strong double digit. And in addition to that, the icons that are importantly getting traction are growing even more so. We mentioned HardWear. We mentioned Knot, we mentioned Sixteen Stones. So we are very happy that the transformation of Tiffany is unfolding with success. And Bulgari has done a great quarter after a very strong one as well. So the Jewelry brands are going very well.

On the Watches, it's still negative, but there are quite some difference in the brands and the regions. So it was positive in the U.S., which is good because, for TAG Heuer, it's the biggest market. But overall, it's still negative. You know that Zenith has a very interesting competitive advantage when it comes to manufacturing and industrial. Probably not enough embedded in the brand equity, so we need to make that evolve. But overall, very happy with the Jewelry Maisons and the growth there, the quality of the growth.

On the press rumors, so I have nothing to report and I am not going to comment the press rumors. I can repeat what I say, is that whenever, and it's not specific to beauty, but whenever we have underperforming brand, the first priority is to fix them. And if in some case, like it happened with DFS, like it happened in the past with Stella McCartney, we see or we have a discussion with an operator where we believe it will be the good place for the brand to land, then we make a deal. What happened in the Q1 was we signed, for DFS, the sale of the airport concessions in the U.S., and we closed the deal with China Duty Free, sorry.

On Wines & Spirits, what I can say is that if you look at Moet Hennessy portfolio, it has a unique feature, which is its exposure to super-premium range of products. And I think it's a very strong competitive advantage in a world where people qualify that of drinking less but drinking better. And if you look at other players, any combination somehow would probably lead to a dilution of that portfolio because it's very unique.

Next question is from Carole Madjo of Barclays.

Two questions on my side, please. The first one, just to follow up on the Watch & Jewelry division. Can you come back on how the Jewelry space is evolving in China? So of course, the key brands, Bulgari and Tiffany. From what, of course, we are seeing, it seems like domestic brands over there are taking market share, growing quite strongly. So are you also being affected by this? Or are your brands also being able to see growth despite the new competitive environment? That's the first question.

And the second one, just to come back quickly on FLG and on the comments that you have been sharing so far. So would it be fair to assume that a growth of at least low single digit could be possible in Q2 on the back of the easier comp base and the confidence and the improvement you are seeing across the U.S., China, et cetera?

On Jewelry in China, you know that it was a place where, especially for Tiffany, it has been difficult in the recent quarters. So we are improving, which makes us very hopeful for the follow-up. But we still have work to do in China in terms of making sure that we deploy the icon at the right speed, et cetera. But we are confident that this will come.

And on Q2, I think, we can really repeat what we've been seeing, meaning one data point is that, for F&LG, March would have been flattish outside of the impact of the conflict. Second, the local clientele have continued to improve and are now positive, and we expect it to gradually continue. And the rest is, obviously, that we don't know yet the outcome of the conflict. One thing as well is that we might see if it lasts, some repatriation of some of the wealth in other geographies. So we will make sure that if it happens, we are there to serve the clients.

The next question is from Oliver Chen at TD Cowen.

Regarding conversion rates, Cecile, and your comments, where are you seeing conversion rate differences? It sounds very encouraging. And will that offset traffic? What should we know about conversion in the context of the Fashion & Leather division?

Second, as we look ahead to advertising and promotion, the Monogram campaign has been very exciting, but you mentioned, in some ways, less transactional. Like what's ahead for demand creation in this dynamic environment as you're thinking about innovation with marketing and demand creation?

And third and finally, on Sephora, if we could have color on the, no pun intended, on the comp store sales within cosmetics or other categories. It's been a really nice category, but it's a more competitive market with Amazon and Ulta, et cetera.

So in the quarter, we've seen traffic being down, but conversion improving, as you said. Clienteling is obviously easier to do with high-end and recurring consumers, while often traffic drives recruitment. However, we didn't see any shift in the clientele pyramid. But it's true that we've been working a lot, especially with AI, in how we improve conversion, and it is happening. So we are happy with that.

On demand creation, it's not a menu or a list of things that you will do. It's really around for each clientele being able to resonate with them with the products, with the stores, with the experience, with the service. I think we have demonstrated that whether on newness or product, on retail experience, on exhibition, on our -- on pushing our icons, we've been able to do it. So we will continue to unfold what we are doing.

And then on Perfume & Cosmetics, so we were flat on the quarter. The best-performing brands are our premium brands. And within the premium brands, the best-performing range are the premium products of the range. I think we've been very clear that making sure we focus on maintaining desirability and being exclusive in distribution is going to push for long-lasting performance. And this is happening. So we will here again continue to work on that. There are great opportunities both in makeup and perfumes. So this is where we'll be pushing.

The next question is from Dana Telsey, Telsey Advisory Group.

As you think about locals and tourist customers, how does it differ by region in terms of the performance, stronger in one region than another? And how does it differ by brand?

And then also, given some of your wholesale distribution, particularly in the U.S. in Saks, are you eliminating some of that distribution? How do you think about wholesale distribution versus your own stores? You opened 2 beautiful Dior stores in New York in -- one in New York, one in Los Angeles, in '25. Any showcase stores that we should be thinking about for 2026?

And maybe because I did not answer on the Sephora like-for-like question, so let me start with that. On Sephora, you have several levers for growth. You have the like-for-like, definitely. You also have, and it's growing strongly on the like-for-like, you have to look at the selective division considering that DFS is costing you 2 points of growth. So that will give you a best view of the rhythm of growth for Sephora. A big part of it is like-for-like.

And then you know that we continue to expand where we have underdeveloped exposure. It was a very good success in the U.K. where we continue to expand, and there are still some markets where we have opportunity to continue the geographical expansion. So going forward, the growth of Sephora is relying on several levers, the like-for-like, based on their unique model of self-brand and nurturing and developing those brands and also on geographical expansion where there is still opportunities.

On the question on tourist and clients, the best performing local clientele have been American and Chinese on Fashion & Leather Goods. The Japanese is still a bit down. And the Europeans are quite resilient, but slightly negative -- flattish, slightly negative.

So the biggest improvement in performance has been American and Chinese, which is a very good news that on the American side, a sophisticated clientele like that continues to respond and to be there with a good demand. And on China, it shows that we continue to rebuild the growth there on local and in a qualitative manner. So it's a good outcome.

Saks had some impact in Q1 in the U.S., around $150 million of sales. We are managing that. And Dior 2 openings are really getting very good traction. And they participate also to the fact that Dior has been improving very markedly in the U.S.

Right. Judith, I think we've got another 2 questions.

The next question is from Piral Dadhania, RBC.

So firstly, could I come back to the revenue versus cost equation? I think at the full year results presentation, there was an emphasis on prioritizing margin, let's call it, stabilization. Obviously, some of the assumptions since then have changed in relation to the Middle East. So Cecile, to what extent are you more aggressively deploying cost-saving strategies? Could you maybe give us some flavor as to what areas that might be in? Is it in A&P or perhaps headcount in store? And is it limited to the Middle East or a bit more global in nature?

And secondly, just on DFS, I may have missed it, but could you perhaps just give us a high-level summary of the deal economics related to the Chinese Duty Free Group disposal and also the Duty Free Americas disposal? Should we be penciling in any cash consideration for 2026? And when can we expect those deals to close? And just to be clear, are you intending on selling all of your DFS assets over time so that there will be no duty-free business left once you have found appropriate buyers?

So very concretely on cost, if we look at Middle East impact, of course, when the conflict started, we went into looking at reducing cost. What you have to take into account is that Middle East is quite a profitable market. So what we cut is activation, animation and short-term thing. But overall, the fixed costs are there. So if you lose EUR 1 in sales, you probably lose a bit more in your margin.

We continue to be very disciplined in terms of the cost. However, our first priority is to go back to growth because this is what is going to ultimately give us a lever in a sustainable manner. So the one thing that we don't want to do is cut cost that would be important in order to restore growth. For example, when we started in January with the first drop of Jonathan, we put some animation. And it was very important to do that to create really and continue to have everyone excited, and it worked well.

So it's always going to be a balance. And whatever we can remove and is not necessary for the client, for the service and for the growth, we will, of course, look at it.

Then on DFS. So DFS, there were several things. In January, we discussed around the signature, sorry, of the sale of the Greater Chinese part of DFS business to China Duty Free. This has closed in Q1. So you will start to have some perimeter effects of probably Q2 will be 2 points linked to the closing of that transaction, 2 points on selective distribution, just to be very precise. And yes, there has been some cash, but we have also closed quite a few locations, if you remember. So all in all, it's not going to make a very important impact in the cash.

The next question is from Chris Gao, CLSA.

I have 2 very quick questions. So the first one is a follow-up on Chinese clientele and also hard luxury. I remember Cecile mentioned Bulgari's relative strength in China market in previous questions. Just want to quickly confirm just how the Chinese clientele perform on Watches & Jewelry compared with Fashion & Leather Goods? Is it more outperforming? And also regarding Bulgari's strength, where do you think that Bulgari's market share taking is coming from? So who you are taking share from?

So the second question is coming -- is related to Wines & Spirits. I know we're just entering Q2, but just wondering if there is any preliminary color on the selling sentiments for Wines & Spirits for the following quarter, especially under current geopolitical uncertainties and also like Wines & Spirits also have some like travel retail exposures. Just these 2 questions.

So on Wines & Spirits, maybe I start with that because we didn't talk a lot about it for this quarter. So you've seen that we had solid growth. It was 2 things. First, it was a good stabilization of the Champagne and good performance of Wine.

And on the other side, there was a good Chinese New Year in Cognac, plus a phasing effect because Chinese New Year was in February this year, January last year. So the shipment enabled to count the growth for the start of the year. And this helped to mitigate demand in the U.S. that is still soft and that we don't see moving a lot. So Q2 will not be repeating Q1 overall given this impact, but we are already quite pleased that Champagne has stabilized and that Wine are doing great.

On the Chinese clientele for Tiffany and Bulgari, again, it's been improving in Q1. We had a very strong Q4 for Bulgari. It's still going okay. And on Tiffany, it's improving. The overall response to the icon, the craftsmanship, the high jewelry are very strong. And we will continue to lean on that to gradually accelerate there.

Okay. I think it's the last question, so if you conclude.

Okay. Well, thank you for your attention. Again, we are very pleased with the progresses, even if we are in a moment where there is a lot of volatility. But we trust that we've been having quite a lot of good response on our initiatives, and we will continue to make sure we focus on that.

Have a great evening. Thank you very much for your attention.

Good evening. I'm delighted to present to you the figures for 2025 to begin with a good piece of news. I think we'll make it through the winter. Some commentators had concerns, especially some journalists. I believe we can say more seriously that the results of the group are solid in a rather challenging, disrupted climate economically from the geopolitical standpoint, but we've managed to get through this period. 2026 won't be simple either, but one thing at a time.

So revenue, just over EUR 80 billion. Let's state that it's twice what it was 10 years ago. Organic growth, slightly negative on the year, but positive in the second half. Our CFO will tell you more about the figures.

An operating margin of 22%, way above the average of the last 20 years, a negative foreign exchange impact, an impact that I don't think is going to improve this year for various reasons. And the economic context that is changing swiftly, disrupted, sometimes unforeseeable. And in spite of that, through management efforts, and I'd like to thank the Executive Committee that is with us here this evening for the efforts undertaken both in order to expand the business and to contain costs because -- and this is a metric that is key for us.

Cash flow is up. And in spite of everything that is thrown it is, including the taxes that were set to disappear, but unfortunately won't disappear. We can return to that if there are questions.

But operating free cash flow reaches EUR 11.3 billion. You'll see looking in greater detail the figures that we have an improvement in the trend across our activities. And this is maintained by the strong desirability of our brands, numerous initiatives taken across our businesses.

I'd cite here in no particular order, Vuitton with Pietro Beccari, who has been heading up that business for years at my side in a masterly fashion, and we've taken a great many initiatives. The most prominent and the most outstanding was the opening in Shanghai and I visited a few a while back of the Vuitton Ship museum, that's the ship, not at sea, but on a square that's very successful, very successful for the brand because every week, I think there are about 100,000 people around that ship. Inside, it's magnificent, very refined, high-quality craftsmanship constructed and crafted by the Vuitton workshops and craftsman.

We've also expanded the Dior brand considerably. Last year, we opened 2 houses in the United States, one in New York and one in Los Angeles. Highly creative and refined but also very successful. And more recently, we opened a Maison Dior also in Beijing next to a Vuitton house. So a lot of activity, a lot of creation.

Before going into the specific details of the various activities, I'd like to emphasize here the new progress in the group's commitments, for us it's of prime importance. You have the table on the screen showing everything we're achieving in a great many important areas, climate, biodiversity, the commitment and engagement of our employees.

Well, the engagement, the road map balance '21, '25 is very positive. We've reached all the commitments. Equal opportunities that's borne fruit. Those initiatives, 50% of women in key positions within the group.

Another key initiative, the Institute of Trades of Excellence to preserve craftsmanship has trained over 3,800 apprentices since it was established on the environment. I'll be able to take your questions on that.

The group's leadership was once again recognized because in the CDP, the Carbon Disclosure Project, we've reached the best score, Triple A.

Now circular design, 41% is materials used to make the Maisons' products now sourced through the recycling progress (sic) [ process ]. Recycling raw materials is up, and we've remained mobilized to protect and regenerate all our ecosystems.

Let's now move to a brief but more detailed review of our business groups. Firstly, Wines & Spirits. In Wines & Spirits, our brands are displaying good resilience in a challenging context, difficult, in particular for cognac, which both in China and the United States is affected by tariffs that have exceeded our forecast. So for cognac, we're facing a difficulty during -- due to that development, but we're addressing it. We're trying to reach agreements. We've made progress with China. I hope we'll make progress with the United States, if international relations are restored and that's to be hoped for.

And champagne is holding up well in market that is less buoyant. Perhaps there were fewer celebrations in 2025. But Veuve Clicquot in the largest market, United States and Asia, is growing in volume terms. And also a good year from Moët & Chandon, once again benefiting from high visibility. We've resumed the partnership with Formula 1 Grand Prix races and that's very promising for Moët & Chandon that celebrates every Formula 1 Grand Prix with a bottle of our champagne.

Rose wines are also growing. Well, that was a good acquisition. It wasn't the case of all acquisitions, but that was particularly felicitous. So we're way out in front and we're leader for Rose Wine, be it Château d'Esclans, Minuty or Galoupet. Those -- Galoupet -- those 3 acquisitions are faring very well. As I said, it's a bit more challenging for cognac and that explains the results that you've seen for that business.

Moving now to Fashion & Leather Goods. The event of the week was the Dior show of Haute Couture. Everyone was wondering how it was going to unfold. We have a great creative artist that's never done Couture. Will he be able to do that? We attended the show yesterday. It was absolutely amazing. There were even spectators who were in tears. So moved were they by the creativity, the quality, the craftsmanship of the clothes.

And John Galliano, the former creative artist of the house, whom we invited, who worked previously with Mr. Toledano, very successful too. Well, he was particularly moved to see such a success remotely and so Dior at the start of this year is fully benefiting from this creative renewal that is producing clothes for both men and women. It's the first time since Christian Dior that we have a creative director who produces all these products. And they're very much in demand at the start of the year. We'll see a bit last. We must never be too optimistic, but it's off to a good start.

Vuitton, there again last week, very fine shows by Pharrell Williams, with highly wearable clothes that's always desirable. Sometimes, it drifts off a bit, but these were truly clothes that we wanted to buy and some amazing Vuitton trunks. I won't give you the price. You may not believe this, what's more that most of them have been sold. There's some extraordinary cases, trunks, some of them produced by the same craftspeople who did the stained glass windows of Notre-Dame, and that's a truly unique show. So that was for the events held this week.

Let's also mention that in 2025, Louis Vuitton launched a makeup range that started off well after continuous success and very commendable with perfumes that were created by a great creator, Mr. Cavallier, and continues without interruption to deliver double-digit growth. Yes, we can say that. It's no secret, and his perfumes are quite successful and only sold in Dior stores.

So for Fashion & Leather Goods, yes, we also have hired new designers last year. At Celine with the American Creative Director, Michael Rider who is off to a good start. At Loewe, since Jonathan left for Dior, we have Jack and Lazaro, who previously were in the United States. That's off to a good start. And at Fendi, Maria Grazia left Dior to join Fendi. She wanted to go back to Rome and there she is in the first -- the first show is going to be held in a fortnight, we'll see what -- but I'm very hopeful. So all that's organized.

Let's mention a great success, Loro Piana that continues to go from strength to strength. We have just one problem at Loro Piana that we have to slow the growth. We don't want to go too fast because the quality of products must be maintained, and soon, it gets a bit carried away. We slowed down Loro Piana. I don't know if we've been up but we've just bought a stake of the partners who've been with us since the start. The [indiscernible] Piji Loro Piana, members of their family. We wanted to buy -- we bought a section, they wanted to keep a stake. I think we had 85%. So we acquired half the investment, half their stake because it's good to their family, they're highly connected with the manufacturing techniques, places in the world where we can source excellent products.

Piji Loro Piana goes regularly to Peru to look after the vicuña. We actually saved that species that was totally in decline. And thanks to that activity, I think we have a few thousand hectares in Peru, where we breed the vicuña.Very happy to be there. Otherwise, they would have been extinct. And so we can produce great products with those animals.

Here, we have some numbers experts, and I just want to say that the valuation at which we acquired the shares of our partners, their investment, I think is equal to 10x or 5x perhaps the value of their initial stage. In other words, when we acquired the company, I think we paid to EUR 2 billion for it, right? And today, it's worth about EUR 10 billion. That's about the ratio.

I'm saying that you can talk to other brands when they team up with us. Firstly, the company's progress and they progress very well in maintaining their heritage and the partners. The family partners do get a very good deal. If you could spread the word, that would be useful.

I think I've covered everything. Now I can move to Perfumes & Cosmetics. Well, firstly, Parfums Christian Dior continues to innovate products that the large part world leaders. The Sauvage, the world's best-selling men's fragrance, relaunched some 10 years ago, and far and away, the world's leading men's fragrance. Also makeup and lipstick, Dior, the leading luxury lipsticks globally in the world. One Dior lipstick is sold every 2 seconds. That's a lot of lipstick and they're all manufactured in France with an R&D center that's one of the best in the world, if not the best for cosmetics.

We have other activities with other brands that are less prestigious even if they're less -- they're smaller, less international such as Guerlain. Also has great products. I'm going to answer questions on that if there are any.

Let's move to Watches & Jewelry. Watches & Jewelry, still on more recent acquisition, Tiffany that continues a very impressive record. Tiffany had excellent products, but we redirected the house so that it can develop in jewelry and high jewelry. Fewer silver products, and we gradually renovated and were far from over the rolling out the new store concepts. And Tiffany, if we continue like that, perhaps we'll have to wait another 5 to 10 years, is likely to become the world's leading jewelry brand, which is no mean feat if we get there. But for the time being, we've opened, for example, a new Tiffany store in Tokyo at the end of last year. That was a huge success. It's got off to a very positive start.

Bvlgari at the end of the year posted some quite outstanding figures. You're familiar with the products, the Serpenti, Diva, et cetera, and all these products are very successful. They're iconic and very promising for next year because jewelry is an area, today, we see this in our main peers. Excellent. Cartier is a great company, is expanding well. It's a promising sector. We're also developing jewelry very actively at Louis Vuitton. And it has great potential. You'll see when we opened the store on the Champs-Elysees.

Lastly, Watches. With TAG Heuer, that is also developing very successfully. TAG Heuer benefits like what it does with the Formula 1. It's the official timekeeper for all Formula 1s. Hublot, Zenith, Chaumet have also broader products, notably Hublot with the latest Big Bang collection that's very successful.

Final business that I'd like to mention, Selective Retailing. There are the 2 main department stores in Paris, Le Bon Marché and La Samaritaine. I won't go into detail, but they are iconic stores, and stores that were -- La Samaritaine, not so well, but it's recovering and we're changing the way it was managed because up until about a year ago, it was in conjunction with DFS. It was geared more to the duty-free customers. We're trying to manage that, thanks to Mr. Wagner, like the Bon Marché, they obtained the same results as Le Bon Marché. That will be great. And we're off to a good start.

But the outstanding business brought to Selective Retailing, is Sephora. Well, Sephora in the space of a few years, we acquired it back in '98 or '99, has become the unchallenged world leader for the retailing of cosmetic products, Selective Retailing worldwide.

What's very interesting is we only cover a very small portion of the world. So everything remains to be done even if we're posting very significant revenue. I won't let that secret out. Very good profitability, good growth. So we're very hopeful. [ Mr. Marc ] is managing that in a masterly fashion. DFS, less interesting. We've sold most of it. We'll continue to exit slowly, but surely.

What can we say briefly about 2026, the outlook? I always say that in our businesses, I am optimistic in the medium term. But short term, it's very difficult to provide a serious forecast, so many events and the pace of decisions taken left and right in the various countries. It's extremely difficult control all these geoeconomic impacts on our companies.

One thing I'm sure of is that the desire for high-quality products goes hand-in-hand with growing living standards in the world. And that's set to continue even though there are up and downs in certain countries. Some countries that are faring left well, but the global trend is there. So long term, we can be optimistic. And this year, there's no doubt that with continued geopolitical crisis with economic uncertainty, with the policy that certain countries, our own that are against companies to tax them to the hilt and create unemployment. I think there's a reason to be somewhat reserved.

So we'll apply the same technique as in 2025. We'll create some very fine products and sell them worldwide, open up fine floors and manage things very closely, contain costs, do what we've done this year, so that in 2026, cash flow is also up.

Once again, I'd like to that all employees who are with us this evening. This success is down to them. We're confident in the future. I'd like to conclude by saying that one of the advantage of the group is that we're a family group. Family groups and the analysts may not like this, but a family group isn't riveted to the quarterly results. It invests medium term. We create product for the long term and we're not mesmerized by what's going to happen in the coming quarter, even if it's important, but we take the long-term view for the time being. It has stood us in good stead. That's something I don't know if it will please observe as a family group has about 50% of LVMH's capital.

And since now we're at the start of a new year were entitled to acquire a bit more. We were blocked up till now at the maximum. And this year, we'll cross the 50% threshold. So we'll own over 50% of the share capital. So we believe in what we do and we're showing it in that way.

Thank you very much. Madame Cabanis, our Chief Financial officer will go into greater detail than I have for the 2025 financials. Thank you.

Good evening, ladies and gentlemen. Thank you for being here. So let's look into the financial aspects for 2025 in more detail. Some key figures. I shall not remain too long on this slide because Mr. Arnault has given you explanation.

So a few comments on the sales. We're stable or slightly down. Organic growth, minus 1% over the year but an improvement in H2 because we renewed with organic growth to the tune of plus 1% in H2. For the year as a whole, sales were down 5% at current exchange rate and published data because there was a negative currency effect. I mean of course, the main invoicing currencies, the dollar, renminbi and yen were all down.

Operating profit was down 9%, a significant portion, indeed, most of it, indeed, most of the decline is due to currency effects. And as Mr. Arnault pointed out, sound financial position. Free cash flow standing at EUR 11.3 billion, reflecting the discipline that our teams were able to display in a less favorable environment. Cash flow was up 8%, even though profit itself was down.

If you look at the details, starting with sales themselves, minus 5% in published data. There was a currency effect of 3%. The currency effect was not homogeneous over the year. As you remember, we started off in Q1 with a plus 3% positive effect, therefore. And in Q4, the currency effect was negative to the tune of minus 6%. So you have an average over the year, but the -- we're ending the year with a negative effect, 6%. So we have to monitor exchange rates for the rest of the year. And we don't have much of a scope effect. This was just organic growth.

Regarding the geographic balance, things have not changed in main territories, namely in the United States, Europe and Asia account for 26% of our sales. Japan is slightly down to 8% and other countries are up by 1 point to 14%, with the Middle East displaying significant growth.

Looking now at sales by region over the year. On a quarterly basis, you start with the 2 ends, the U.S. and Europe. These 2 markets were stable, a slight decline in Europe, but they have a reverse curve. In H1, there was more growth in Europe because the dollar was high and tourists were buying more in Europe. And there was a reverse trend in H2 because the dollar became cheaper and then people were buying in America itself.

We have a comparison -- a basis of comparison, which explains the difference in Japan. So we had also a favorable starting basis of comparison in the previous year, but not as extreme. And Asia other than Japan enjoyed a similar development, slightly down over the year.

If you look at the organic growth, we have Wines & Spirits down in organic numbers, down 5%. Likewise, Fashion & Leather Good. We have 3% and 4%, respectively, for Watches & Jewelry and Selective Retailing. And if you look at the other side of the screen, you find that the -- well, if you compare H1 and H2, you find that there was a significant acceleration for most of our businesses between H1 and H2.

If you look at organic growth by quarter and by business. Here we have an improvement of organic trends for most businesses in H2. Wines & Spirits, champagnes sales were resilient. Cognac and indeed spirits in general were down, and that is because of the specific circumstances in the U.S.

Fashion & Leather Goods enjoyed a significant improvement starting in Q3, driven by local customers and a resumption of growth in Asia, a less strong basis of comparison for Japan and some areas of improvement, pockets of improvement, reflecting specific initiatives, new creative initiatives, but also outstanding Louis Vuitton stores and other initiatives taken by all the houses.

On Watches & Jewelry, there was a significant acceleration in H2, especially in Q3, we had a resumption of growth for the Watches business with an acceleration of Bvlgari, but also a transformation plan on Tiffany, which is now bearing fruit. There's still the weight of legacy, but we are gaining ground quarter-after-quarter.

Selective Retailing has enjoyed, of course, Sephora's significant growth in H2, and Perfume & Cosmetics were stable, with a very sustained innovation policy, and we were highly selective in our retailing business, and that made a big difference on our profits.

If you look at the profit from recurring operations, so we're slightly down 9% in published data. I was saying earlier on that most of the negative effect was currency effect and you have the illustration right there. We have a EUR 1 billion effect due to exchange rate fluctuations. Without this, the decline would only be 4% on profit from recurring operations.

Regarding the various business lines and again on current operating profit. On Wines & Spirits, no surprises there. That is the one business suffering the strongest decline. There was a currency effect. There's also lower volumes and lower mix. And the first effects of trade tensions with China and the U.S.

Fashion & Leather Goods also significantly down, mostly because of the currency effect together with lower sales, but profit from recurring operations sitting at 35%, very high and much higher than the group's long-term history.

Watches & Jewelry displayed profit from recurring operations stable, even though there's a significant currency effect and other headwinds related to tariffs and the price of gold. And the cost of Tiffany's transformation, significant capital expenditure there. But that plan is, as I said, bearing fruit.

Perfumes & Cosmetics, as I was saying earlier on, there is an improvement up 8%. So there's a double positive effect, a, we're being very selective in investment to remain -- to keep our brands attractive, and there was significant work on the models' effectiveness, and that's certainly paid off.

And then a significant positive effect on Selective Retailing. There are 2 effects there. As I said, Sephora's performance, which has been growing both in terms of volume and margins. So a double effect there. But also, we were able to redress the balance for DFS. You may remember that we were losing hundreds of millions of euros on DFS and now we are breaking even at long last.

And then if you look at the structure of our profits proper, starting with the gross margin is slightly down, down 80 basis points over the year, but in H2, it was up EUR 40 billion. The 2 reasons for that. We found on a number of categories, there was some organic growth that made it possible to absorb costs. And there are a number of nonrecurring factors that we had in 2024. The currency effect at the end of the year was higher than it was in H1, but the improvement of organic profit more than compensated that negative effect.

Regarding operating expenses, they were down 4%. That reflects the agility, the responsiveness, the discipline of our team in a less favorable environment, but also our ability to manage costs and be more selective in our expenses.

If you look at the development, general marketing expenses or selling expenses, you have selling and marketing, you have -- selling expenses were stable on a constant rate basis. Marketing expenses were down. But if you look at the ratio over the revenue, the ratio remained stable regarding marketing expenses.

And then G&A were down 5%. There's a double effect there. There was, well, a cost saving discipline and then some costs of 2024 were nonrecurring, in particular, the Olympic Games that, of course, was nonrecurrent. And now if you look at all that, the profit from recurring operations stood at minus 9% at EUR 17.7 billion.

If you look at other operating income and expenses, well, by definition, these are not recurring expenses. Now here, you have mostly costs related to the disposal of Greater China for DFS and a number of other markets for DFS. Now that is an accounting expense. It has no cash effect.

The financial profit, I'll get back to that in a moment, financial expense rather. And then our tax stood at EUR 5.5 billion, up 4 percentage points, and that is, of course, that's the effect of the supposedly exceptional tax that was -- that is now being renewed. Anyway, there is this special tax in France for big companies. Anyway, the net profit group share stood at EUR 10.9 billion, down 13%.

Net result, now they are 4 lines there. The cost of net debt of EUR 348 million. So that was down well, lower rates but also lower volumes of debt outstanding for the year. The interest on lease liabilities, and that is the accretion expense, and that's because of an accounting standard that is, as you may remember, IFRS 16. And because rates were up, that accretion expense was up.

The cost of our currency hedging was stable, slightly increased in the context of highly volatile exchange rates. And of course, there are some currencies that suffered a decline vis-a-vis the euro.

And then there is another issue of volatility in our net profit and that is the fair value adjustment of our financial assets. Now on these assets, there's a mark-to-market in accounting terms. So we have this adjustment at 31 December. There was an EUR 800 million appreciation. So this has a positive effect on the result. Now these are unrealized capital gains. These are -- this is an accounting exercise, but this issue comes up, we assess these capital gains or losses, but this has no economic or cash effect.

On the balance sheet, nothing new. The changes in exchange rates had an effect on most items of the balance sheet because they are denominated in euros, both on the assets and liability side and because there was no major operation, very few mergers or acquisitions, there's not much. Of course, there was the acquisition in Loro Piana, but we mentioned that earlier. Other than that, nothing to mention.

So a few words about operating free cash flow. As we said early on, it stood at EUR 11.3 billion, up 8%, even though profits were down, and that is because as you can see, we managed our WCR very carefully. We're very selective on capital expenditure.

On the tax paid, this is down. That reflects the effects of provisional tax payments and the settlement of the final tax, but of course, lower profit, but there was the One Big Beautiful Bill Act. You may remember that changed the depreciation schedule, and this had a positive cash effect for us.

Capital expenditure accounted for 5.7% of sales. So this is in line with our long-term historic average. And then, of course, there was a significant generation of cash flow, reflecting our financial soundness, but also the group's responsiveness. We were able to generate more than adequate cash flow in a less favorable environment while still keeping capital expenditure where it should be to remain competitive.

Now as you can see, the net debt was down in 2025 for the third year running standing at EUR 6.9 billion, so slightly below 10% and indeed in line with the year 2020, that was the year before we acquired Tiffany.

And then finally, and this will conclude my presentation. We will propose at the AGM in April, a dividend of EUR 13 per share. This is stable compared to last year. As you know, the group's dividend policy is to maintain a dividend at a stable level when we face challenging times.

And of course, when we have more favorable periods of growth, then, of course, the dividend grow in line with our profits. There was an interim dividend of EUR 5.5 in December. The balance will be EUR 7.5 that will be paid out April. Thank you for your attention.

Very good. We're available to answer a few questions, kindly introduce yourself when you ask your question.

Antoine Belge from BNP Paribas. Three questions, if I may. Firstly, would it be possible to return to the performance of China in Q4 and also to know a little about what are your perhaps not forecast, but how you view the developments of the Chinese market that has turned down slightly since the summer.

Second question, Fashion & Leather Goods business. Could we have some metrics on Louis Vuitton. Dior has gone above the average of the division's end point. One of the great surprises today is the margin increases with very good cost control.

Mr. Arnault, you mentioned that with exchange rate impacts that the improvement is going to continue. The impact was quite high on the operating income, but thanks to currency hedging, there should be a slightly more remote or postponed effect with the euro-dollar rate that has moved, I think, to 120 today.

Regarding the development of China in Q4 and Chinese clientele, if you look at the change between Q3 and Q4 on customers, to make it simple, I mean we had more or less the same numbers. There was a slowdown in American customers, but basis of comparison was a bit complicated if you compare with Q4 of last year. So the improvement trends that we noted in Q3 remained stable, and we have a positive development in our Chinese customers, constant in local customers and improvement in offshore.

On Christian Dior, well, on Dior, difficult to give you forecast, less than a month, we resumed selling products by the new Creative Director. It's off to a good start. But if I say that it's off to too good a start, you're going to anticipate astronomical figures. If I say that it's so-so, you're going to think that it's not working. So let's wait until the next meeting.

But for 2025, I mean, there's nothing new. We find that the numbers are slightly above average. But if you look at the 2 brands, they are both growing quarter after quarter from Q1 to Q4. These improvements are worth noting.

As regards to exchange rates and the margins, regarding exchange rates, next year, we expect effects, the same currency effects, but the timetable will be reversed. In other words, what you saw in the numbers I gave you will be more or less the same, but probably in terms of time line, it will be the reverse order. There are hedging effects, but they won't be very different from this year. So in terms of the financial impact, this won't make much difference.

Erwan Rambourg from HSBC. Three questions from my side, if I may. On Louis Vuitton, you saw quite major initiatives. Any further possibilities for diversification in hospitality or other growth drivers going forward for Louis Vuitton.

Secondly, a question on Moët Hennessy, when you appointed Jean-Jacques with the help of Alexander for that asset, you mentioned restructuring of about 18, 24 months, we're about halfway there. How do you view the situation and the future.

And lastly, an update on Tiffany. Fine acceleration in Q4, perhaps more Bvlgari than with Tiffany. I may be a mistake. An update on where you are on the retail overhaul. Mr. Arnault, I recall you mentioned that the before and after, you increased the revenue by about 25% like-for-like. Don't know what percentage of the real estate you've overhauled and could you talk about productivity in the brand at '26?

I'll answer on Vuitton. We have a great many initiatives. For example, you mentioned I didn't mention that at Seoul where we're going soon with the Vuitton teams. We have a quite remarkable achievement there that links the history of Vuitton, and museum example of what we've been doing at Vuitton since the 19th century together with new products in a quite spectacular space and it's off to a flying start.

Concerning Vuitton, it's not a brand that we really want to diversify. We already have a great many products. We have a great many lines. We have 2 creative designers, I repeat. It's also the view of Pietro and Damien Bertrand, unlike Louis Vuitton, it's not a matter of fashion, it's of leather goods, cases and trunks, and we're focusing on that.

Instead of diversifying somewhat erratically, we're remaining focused. It's not because from time to time, there's a hotel room as we have a deal at Avenue Montaigne a room that's of interest to hospitality that's interesting. It means we can receive VIPs and give them certain advantages when they're in the house, but Vuitton's not going to go in the hotel business, we've agreed on that.

Vuitton is focusing instead of diversifying. We have already many product lines to develop to refine further. You see this image here. This -- we have the latest campaign. That's very compelling image for Vuitton. It's the iconic product of Vuitton. This campaign has yielded truly remarkable results and yet it's a product that's been around for some 50 years.

So Vuitton is a truly historic brand with a high focus on quality in which we seek to bring technical refinements. The trunks that we saw at the show last year, Vuitton is the only one that can do this. With the glasses that are the same as the stained glasses at Notre-Dame. The same craftsman, if you call it diversification. But for Vuitton, it's truly, it's core business from Vuitton. Cecile, you like to answer?

Do you have a mic on for Jean-Jacques? So I would have been disappointed not to take the floor. Listen, where do we stand on restructuring? It's -- well, it's not really restructuring as such. Together with Alexander, we took up this business, knowing that it would take some time to return to growth. There's the matter of what you have to offer a number of initiatives commented by Mr. Arnault especially around Formula 1 but there is also Pharrell Williams. It might be Moët & Chandon. Likewise, Hennessy, we are trying to improve our offer, improve creation, like our brand is more desirable.

There's also the issue of demand. Demand is not particularly geared towards us. If you look at main market in the U.S., vodka, tequila, whiskey are down. The only category that is growing at all is the ready-to-drink, so there's more cans sold at EUR 3.5. At times of crisis, we said that's the end of it. This is a structural thing. But no, we can see this is cyclical.

The only thing that is growing in the market is the quality of spirits selling at $3 or $4 . And of course, these are small amounts, but this reflects low demand. So maybe 18, maybe 24 months. But of course, demand should be there. It's not quite there yet. It is not in the U.S.

Over to Stéphane for Tiffany.

On Tiffany, as you said, we're right in the middle of the transformation plan that started out since 2021, and we'll continue into the out-years on the stores. But over and above the stores, it's also a transformation in terms of product. Tiffany was hugely focused on silver products, and we're now pushing gold. We are pushing high jewelry. The high jewelry has tripled in 4 years. The high jewelry rates tripled in 4 years. That's what's happening. Silver, however, has declined by over 1/3 since we took it over. And this to sell more icons as Mr. Arnault mentioned and icons based on gold, diamonds, platinum.

So it's a mammoth transformation plan that's underway between the old and the new mix. The former mix, silver, bronze, we're negative. And on the new mix, we're growing double digit. The problem is that the new mix for the time being is still relatively weak as compared to the former Tiffany. That's the first thing.

The second thing in terms of the new store concept, the new concepts represented about 1/3 in terms of number of stores at the end of 2025 and about 42% of sales, so again 31% the previous. So it's growing, but it remains less than half of our sales, and it only represents 1/3 of the network.

I know a wonderful store that was revamped on Fifth Avenue, which in 2024 we never achieved record in terms of sales. And that has taken away in the December mix that's quite considerable because it's almost doubled its mix in December compared to the rest of the year. So the stores are working extremely well. The difference just to end on your question, the difference between the former concept's performance and the new concept is between some 15 and 20 points. So it's hugely promising for the future.

My name is Luca Solca from Bear Sterns (sic) [ Bernstein ]. We find that you're doing fine work to keep costs under control to have targeted capital expenditure to monitor WCR. What are the opportunities for 2026? Can you keep this effort? Is there also a scope effect to take into account? Is that on the menu as it were? And could there be possible disposals? You have disposed of a number of DFS stores already.

Now the question number two, and this may be also related to what Jean-Jacques really just told us. What's your thinking on demand by segment from consumers. We find ourselves in a market where the middle class seems to be slowing down compared to the well-off. At least people have been spending money on the stock exchange, but for the sort of the middle class, these customers. Do you -- is there more work to do to stimulate the demand from them?

And then about watches, we saw TAG Heuer's leadership at the beginning of the year. This seems to be changing. How is that business changing? Are you remaining dedicated to these various brands of watches because this seems to be a challenging business right now.

Well, to answer your first question. One can't speak of a menu cut. We work à la carte. So it's very difficult for me to answer your question except when we come to the desired dish. Actually, there are 2 segments. It's always the same. And that's been the case for a long time now. There's the segment of the affluent customers, customers who have the means, very wealthy customers. And then there is the affluent customers. It's both. We have both customer segments, sometimes the most well-off customers stand out for various reasons.

When the stock market is up, indeed, or when they need to invest in products that are more attractive than others. And yet we work a great deal with those customers, especially in the big luxury brands in jewelry, in the most iconic watches. In this regard, I'd like to mention that at Louis Vuitton, over a few years, with La Fabrique du Temps, we managed to produce what is considered by all watch connoisseurs as some of the finest watches in the world that are indeed very successful.

And we could organize one day if you're interested, a visit for some analysts who are fond of watches, a site visit to show it's truly fascinating. And that's what we do with other activities. And of course, these watches with complications, these manual watches is so complicated to manufacture that they're very expensive, and that's for the very high-net-worth customers, but also at Vuitton, on our stores, we try and attract the kind of entry-level customers, so to speak. The range doesn't start at 0 because the entry price remains quite high. So we know that those customers can then move to these higher counter. The younger they start, the more attached they'll be come to the house.

Well, when the economic climate in a country is not so good, obviously, it's firstly, the affluent customers who disappear a bit. That's a fact. But it doesn't mean that the rich are not progressing either because there's no trickle down there. I mean it's a different development.

And on the watches, on TAG Heuer, Mr. Bianchi will tell us about the watches, but we're very confident on TAG Heuer, in particular. And on the watch business, when I see what we've achieved with Vuitton, there's huge potential for the group. But you know TAG Heuer very well.

Well, what I can say is that we've just completed LVMH Watch Week in Milan. We had this Napoleone stores and the Louis Vuitton shop and the Tiffany for Guy. We have the Zenith in Tiffany. Anyway, we meet our retailers, and that is -- that week was very successful indeed.

In any case, we started the Formula 1 partnership. We have it going for another 9 years. We invested in Jean Pierre. We took a minority interest last year. We started the Hublot manufacture to extend production of watches through Hublot. We did [ Saignelégier ] for Bvlgari last year. We bought L'Epée.

So all this goes to show that we're very confident in the watch business, and we keep investing. There's no question of stopping that and indeed we denied -- formally denied a rumor that went around regarding we were going to dispose of Zenith. There is never any question of selling Zenith.

So what else can I say? We remain very confident on the watch segment. That segment, well, the time piece segment at large. As you can see with the exports of Swiss watches is experiencing challenges and some of our subcontractors are also experiencing challenges, and we find this in some of the households. We remain confident, and we keep investing.

Yes, Mr. Number two.

Edouard Aubin from Morgan Stanley. I had a couple of questions for Mrs. Cabanis. Number one, to my knowledge, you don't have a crystal ball, you don't give us any guidance, and it's not going to start today. But still, can you give us some color on the sensitivity analysis for margins in leather goods, assuming you get a 4% margin. Do you think the margin is going to go up or down? I mean you mentioned the currency effect, but there are also tariffs. There is cost of materials. So that's my first question on Fashion & Leather Goods.

The other question on the cost structure that Mr. Arnault mentioned, some of your competitors, some of your peers are cutting down on their stores. Are you cutting costs on payroll? Or are you also working on cutting in the payroll? And then on the corporate income tax, what's your expectation for the coming year?

Well, there are a lot of crystal ball questions there, but I'll try and see if I can answer on question number one, that is the expected level of profit margin on Fashion & Leather Goods, where we are working on costs, of course.

Now to -- in order to stabilize our profit, we need to find renewed growth, and that's what we want to generate. We want to keep costs under control. But what else can we say? We need some growth because, of course, with our gross profit margin we'll be under pressure in organic terms.

Then on the currency effects, as I said, we expect same effect as last year, but the timetable will be reversed.

Regarding the cost structure, per se, well, there's no one big rule saying we'll cut down on, on this budget line or that. it's always a case by case. We may have exceptional initiatives. Nonetheless, we still have to manage the rest of the network. So we keep our discipline stringent on the network.

As a whole on Perfumes & Cosmetics, the profit margin was up 8%. It was a remarkable work on POSM marketing expenses. And so there's no clear-cut answer. It depends on where we stand, where we need to work on to improve the effectiveness of our business model, but everybody is applying the same discipline on costs. But of course, we will -- we expect growth to resume and then we will be in a position to expect better profit margins.

On the tax rate, well, it depends on when you asked the question, last week, 3 weeks ago. It looks as though 2026 will have a tax rate identical to 2025 because the extra tax will be renewed in 2026.

Well, on the -- are there any final questions at all asks Bernard Arnault. I see no further questions. Well, yes, here you go.

I'm Boris Ivanov I'm a journalist at [indiscernible]. To my knowledge and unless I'm mistaken, you did not mention the effects of tariffs, what is the currency effect, but could we have some details on that? I imagine that higher tariffs will have effect on your business?

Well, I did mention tariffs in my presentation, looking at the gross margin regarding especially Wines & Spirits because you had an effect right there. This is only a partial effect because we had pushed stocks inventories at the beginning of the year. So the real effects will be felt in 2026 over the full year. They will also an effect on Fashion & Leather Goods and Watches & Jewelry. But of course, the pricing power is not the same as in Wines & Spirits. So of course, the bottom line will be different. Anyway, thank you for your attention.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Ladies and gentlemen, good afternoon. I hope you are well. I'm here with Rodolphe Ozun, who is our Head of Investor Relations. And together, we are very pleased to welcome you on our third quarter sales call. As usual, I will start with the highlights of the quarter, then Rodolphe will take you through the details of the division. I will conclude, and then we'll be happy to answer your questions. Before we start, I kindly ask you to read the safe harbor statement on Page 2 of your presentation before I move to Page 3 and start the presentation.

LVMH showed good resilience in the first 9 months of 2025 with improved trends in Q3 across all business groups. Fashion and Leather Goods, in particular, benefited from solid local demand in its key nationalities with Mainland China turning positive in Q3, solid growth in the U.S., which improved sequentially compared to Q2 and positive growth with Europeans in line with previous quarter.

The euro strength against key currencies generated a highly negative minus 5% impact in Q3 and currencies also remained a strong headwind to offshore demand in Europe and in Japan. Finally, all divisions continue to innovate and move forward with their strategies. Q3 has been a notable quarter for the Fashion and Leather Goods division, in particular, with pockets of excitement, including new retail concepts, successful shoes and looking ahead to several new creative designers.

Next on Slide 4 with the sales bridge for the 9 months, which shows the group recorded around EUR 58 billion in revenue, down 2% on an organic basis and down 4% on a reported basis after taking into account a negative 2% currency impact. For the third quarter, the LVMH Group returned to growth, up 1% organic and down 4% reported after taking into account the negative 5% currency impact.

Slide 5 outlines the geographic breakdown of revenues in euros. Our regional mix remains well balanced over the first 9 months of the year, with Europe, including France, at 26%, up 1 point; U.S. is stable at 25%; Asia is down 2 points, to 27%; and Japan down 1 point to 8%. And finally, other markets increasing 2 points to 14%.

Moving on Slide 6, which highlights the improvement in trend in Q3 in our key regions. And as you see, improvement is visible across most of geographies. Both the United States and Asia, excluding Japan regions turned positive in Q3. Japan also improved significantly sequentially, reflective of a basis of comparison, which remains high, but less challenging than in the first half of the year. Europe remained broadly stable, albeit slightly impacted by tourism in Q3.

Slide 7 outlines the organic improvement of our businesses in Q3. Fashion and Leather Goods saw the greatest sequential improvement versus Q2 with improved performance in nearly all the key regions and notably Japan, Asia and the U.S. This reflects the recovery of the basis of comparison as well as pockets of improvement and it reflects continued progresses made by the brands in terms of desirability, innovation and execution.

All other divisions recorded positive growth in Q3. Selective Retailing up 7%, continues to perform well with very strong performance by Sephora and continued improvement in DFS. Watches and Jewelry up 2%, continues to see a good performance on iconic lines and renovated stores. Perfumes and Cosmetics, up 2%, also improved slightly, and Wine & Spirits, up 1%, returned to growth in Q3 with improvement in Champagne, good growth in Rose Wines and still soft demand in Cognac. Rodolphe will now share further information by business group before I conclude and we open for Q&A.

Thank you, Cecile, and good afternoon, everyone, and we'll start, as usual, with Wines & Spirits. Turning to Slide 10. The Wines & Spirits business group recorded EUR 3.9 billion in revenue in the first 9 months of 2025. This represents a 4% decrease on an organic basis versus the first 9 months of 2024 and a 7% decrease on a reported basis after taking into account a negative 2% currency impact. The numbers don't fully add up due to rounding, but they are correct, just to be clear.

Broken down, Champagne & Wines generated EUR 2.2 billion in revenue in the first 9 months, a 3% increase on an organic basis and revenue was up 1% on a reported basis after taking into account a negative 3% currency impact. Cognac & Spirits recorded EUR 1.8 billion in revenue, a 12% decrease on an organic basis and a 14% decrease on a reported basis after taking into account a negative 2% currency impact. For the third quarter, specifically, the Wines & Spirits division rose 1% organic with Champagne & Wines up 7%, while Cognac & Spirits declined 6%.

On Slide 11, Champagne & Wines continue to benefit from resilient demand in Champagne, driven notably by -- sorry, solid depletions in the U.S. year-to-date and by good performance of Rose Wines. Beyond these positive elements, Q3 also benefited from Champagne restocking in the U.S. and as a result, year-to-date growth is probably more indicative of underlying performance for this business group.

Moving on to brand initiatives. Moet & Chandon was the title sponsor of the Belgian Grand Prix as well as Monza and also celebrated its return as the official champagne of the U.S. Open. Veuve Clicquot continued to deliver solid volume growth and to gain market share, contributing to the good performance of the U.S. market I was referring to and unveiled a new limited edition for its 2018 La Grande Dame vintage in collaboration with Simon Porte Jacquemus. Maison Ruinart, which also gained tangible market share, appointed Caroline Fiot as its new Cellar Master. Frederic Panaiotis, who held the role since 2007, sadly passed away earlier this year. And Caroline, who has worked alongside Frederic for nearly a decade, will continue to build on Ruinart's commitment to innovation.

In Cognac and Spirits, cognac performance continued to be impacted by trade tensions and soft depletions in the U.S. and in China, although China did benefit from restocking in VSOP in the third quarter, hence, the sequential improvement in trends. Elsewhere, the division saw promising innovation from Belvedere and Eminente, Glenmorangie's partnership with Formula 1 and the new hospitality and whiskey experience at Ardbeg.

Next to Fashion & Leather Goods on Slide 13. Revenue for the division reached EUR 27.6 billion for the first 9 months, down 6% on an organic basis and down 8% on a reported basis after taking into account a negative 2% currency impact. For the third quarter, Fashion & Leather Goods was down 2% on an organic basis.

I'm now on Slide 14, which shares some highlights by brand. Louis Vuitton continued to display its creativity across a wide range of initiatives, starting with highly desirable fashion shows by Nicolas Ghesquiere set within the summer apartment of Anne of Austria at the Musee du Louvre, while Pharrell Williams drew inspiration from India with the Centre Pompidou as backdrop. The Maison continued to innovate in its core leather goods line and benefited from the enduring appeal of its monogram and monogram [indiscernible].

In retail, the opening of the Louis in Shanghai, which is pictured on Slide 12, has attracted incredible attention and traffic whilst highlighting the depth of the Maison's heritage, craftsmanship and creativity. And anecdotally, I would add it's quickly become one of Louis Vuitton's best-selling locations for suitcases. And finally, true to illustration of innovation at the end of August, Louis Vuitton officially unveiled La Beaute Louis Vuitton, which has been very well received and includes 55 Rouge lipsticks in a nod to the roman numeral, LV.

Christian Dior saw the inspiring first men's and women's shows designed by Jonathan Anderson and folding a contemporary expression of Christian Dior's new look. The Maison also inaugurated House of Dior New York, just steps from the location where Christian Dior established his U.S. subsidiary in 1948 and inaugurated the House of Dior Beverly Hills on Rodeo Drive, celebrating Dior's history and its collections to Hollywood. Christian Dior also saw the launch of the new Diorigami jewelry collection designed by Victoire de Castellane and inspired by the Japanese art of folding.

Two key highlights on other brands. Firstly, the successful debut collection or runway shows of several designers. Cecile was referring to it, Michael Rider at Celine, Jack McCollough and Lazaro Hernandez at Loewe, Sarah Burton at Givenchy, and we're pleased to have announced the appointment of Maria Grazia Chiuri as Chief Creative Officer of Fendi. Also worth highlighting this quarter is the excellent performance of Loro Piana despite challenging comps and the continued growth of Rimowa and Berluti.

Moving on to Perfumes and Cosmetics on Slide 16. Revenue reached EUR 6 billion, stable on an organic basis and down 2% on a reported basis after taking into account a negative 2% currency impact. For the third quarter, specifically Perfumes and Cosmetics was up 2% on an organic basis.

Slide 17 shares some specific highlights by brand, starting with perfume, Christian Dior, which unveiled a new campaign for Sauvage as well as its new fragrance for women, Miss Dior Essence. The Maison also celebrated the history of Miss Dior with an exhibition in Shanghai. Makeup outperformed in Q3 for Christian Dior, supported by successful innovation, including Rouge Dior on Stage and Backstage, while growth in skin care was driven by the Prestige line.

For the Perfume & Cosmetics business group as a whole, the third quarter was marked by balanced growth across product categories, driven by the good performance of Guerlain, which performed well in all segments as well as Givenchy Acqua di Parma and Maison Francis Kurkdjian in fragrances. In makeup, Benefit successfully launched a new foundation, capitalizing on the reputation of its iconic Porefessional franchise and Make Up Forever rolled out novelties in crayons and foundation in its HD skin liner.

Moving on to Watches & Jewelry on Slide 19, where revenue for the first 9 months of '25 reached EUR 7.4 billion, up 1% on an organic basis and down 2% on a reported basis after taking into account a negative 3% currency impact. For the third quarter, watches and jewelry was up 2% organic.

Next on to Slide 20, we outlined some of the initiatives of our watch and jewelry Maison, starting with Tiffany, which enjoyed double-digit growth from its iconic lines with a particularly encouraging momentum from [indiscernible]. Renovated stores continued to increase in the mix and to outperform and now account for a bit more than 30% of the total, in line with our plan. And this quarter saw the reopening of 2 stunning flagships, one in Ginza pictured on Slide 18 and another one in Milan. Finally, Tiffany also enjoyed record sales in high jewelry, which continued to outperform in Q3 and year-to-date.

Moving on to Bvlgari, which also enjoyed great success in high jewelry in the third quarter with its Polychroma collection. In core jewelry, the Serpenti line continued to perform well, and the brand expanded its historic Tubogas line. Also worth highlighting is the very good performance of Bvlgari's jewelry watch in Q3 and year-to-date. Finally, Bvlgari also presented its largest ever exhibition in Japan called Kaleidos and took its Serpenti Infinito exhibition to Mumbai in October. Likewise, Chaumet unveiled an exhibition at Osaka Kansai World Expo and Fred continued to grow, thanks to the strength of its core Force 10 line.

In watches, TAG Heuer enjoyed a high-profile presence at the Grand Prix races and saw strong outperformance in its Formula 1 range, while Hublot continued to innovate on materials with Titanium watch and Zenith celebrated its 160th anniversary.

Now to discuss our last business group, Selective Retailing on Slide 22, which shows revenue reached EUR 12.6 billion, up 3% on an organic basis and flat on a reported basis after taking into account a negative 3% currency impact. For the third quarter, Selective Distribution was up 7% on an organic basis.

Moving on to Slide 23. Sephora delivered solid organic and like-for-like growth across all key regions, Americas, Europe and the Middle East and successfully launched Rhode, which debuted in-store and online at Sephora early September in the U.S. and Canada and is a new record brand launch for Sephora.

Finally, Sephora also announced its global beauty event, SEPHORiA, which enables consumers to discover the newest products and trends, attend masterclass and experience Sephora's playful and socially driven approach through a local lens with 3 destinations this year: Shanghai, Paris and Dubai as well as the U.S. early next year. Elsewhere, DFS benefited from strong traffic in Hong Kong and Macau in Q3, while Le Bon Marche continued to deliver excellent growth and distinctive cultural events such as the Rock'n'Drole exhibition, which is on until the end of this week. This concludes the business group presentation, and I'll now pass back to Cecile.

Thank you, Rodolphe. And a few words to conclude the presentation on Page 25. Q3 shows quite a few positive beyond the comp base, and we are happy with the decision made. We are encouraged by the pocket of improvement that we see in all businesses. Q4 is going to be tougher when it comes to comp base, and we need to keep that in mind. When we turn to next year, we will have easier comps, and we are solidly building self-help. So all in all, we are confident while we remain conscious of the macro environment, which is still challenging and continues to be pretty volatile.

Thank you very much for your attention, and we are now ready to take your questions.

[Operator Instructions]

The first question is from Zuzanna Pusz, UBS.

I have three. So first of all, maybe to follow up on the performance by consumer nationality and specifically the Chinese, Europeans and America. Just to get an idea of what's driven most of the improvement sequentially. If I'm not wrong, I think the prior quarter, Chinese were down mid-teens, and I think Europeans and Americans were up low single digits. So please correct me if I'm wrong, just so we know what we are comparing it to.

Secondly, very quick question on pricing and the U.S. tariffs. Can you remind us, please, if you've taken any incremental pricing in the last quarter, just so that we understand if there's been a bit of a pricing benefit sequentially for fashion leather goods? And then finally, sorry, I know this is probably your least favorite question, but on the exit rate, especially as you mentioned that the comparables are getting tougher, just -- so we get an idea of how we should think about the next quarter? I mean, I guess maybe if I can put it differently, if every month this quarter was sequentially better?

Thank you, Zuzanna. So on your first question regarding the performance by nationalities, maybe as an introduction, let me step back for the quarter. If we look at it broadly, there are 2 things. First, we have totally recovered the comp base, which is in itself a good news. And in addition to that, we've been seeing pockets of improvements beyond the comp base. The improvement was most tangible with Southeast Asian that improved materially -- still negative, but that improved materially without any effect of comp base, the Chinese that accelerated a bit slightly beyond the comp base, and there were some improvement here and there. Americans locally is one. There were also an acceleration for Middle Eastern. So we've been seeing this sequential improvement in quite a few nationality.

Then on your question regarding the U.S. and price, if we look at Fashion and Leather goods, overall, the improvement -- the sequential improvement was mostly made through improvement of traffic and volume. Price was not very different from Q2 and mix was around neutral. So you can consider that the bulk of the improvement is really around traffic and volume.

On Q4, we know and you know as well that we will have tougher comps. So it will be easier for Japan, but it will be tougher for Asia, Europe and U.S. If we want to simplify, it will be a 4-point tougher. But at the same time, if we go beyond Q4, we know that the first half of next year will, on the contrary, have easier comps. And we know that all the decision and the actions that we are taking, especially when it comes to creative renewal, we start to hit the stores next year and gradually impact H1. So that's where we stand when we look ahead.

The next question is from Antoine Belge of BNP Exane.

Three questions. So first of all, coming back on China and the Chinese. So if you did better than just the comps, and you mentioned that Mainland China was positive, but what was the Chinese cluster, flat or slightly negative? And beyond that, can you comment maybe a bit in terms of like new behaviors that I wouldn't say changes, but maybe things that make you particularly confident.

Second question regards the -- this time, the sequential acceleration was more by brand. Was it more sort of like catching up more or any color on that would be extremely helpful.

And thirdly, with this sort of, I would say, good news, what's your attitude towards cost? I mean sometime in the past, LVMH proved a bit countercyclical, so happy to reinvest a bit ahead? Or are you still in the same mindset as end of July and looking at a lot of areas? And in other words, also, would you expect the margin in H2 '25 to be able to be above H2 of last year? I remember there were quite a few one-off or with trends still being negative and maybe some of the countercyclical elements that I've mentioned, you would still guide towards second half margin being lower than second half last year?

And finally, if you could comment maybe on the FX impact from hedging on next year because we saw quite a big sort of negative impact, especially in Q3 at the top line, but probably protected for this year margin-wise?

Thank you, Antoine. On your question regarding the Chinese cluster, what we are seeing is that we're getting very close from stabilization. So we are low single-digit negative, but improving a lot on the whole cluster, and this is done through 2 things. First, Chinese locally are now growing mid- to high single digit. And second, the Chinese tourist part of the purchases is improving a lot, but still double-digit decline. So that's around where we get in terms of Chinese.

You asked about what makes you confident when it comes to client and signs. I think it's -- it will be different between the businesses. But overall, what we see is whenever we are bringing an initiative or an innovation or a new retail disruption initiative, it creates immediately a bound and interest and excitement and consumer rebounds very quickly. So this is very interesting.

We could also comment on the feedback of the shows, but that is still to be materialized next year. But there are many things. I mean Sephora is doing -- is growing twice the market. So there are many things that put us in confidence with what we're doing and the decision we've been taken.

On LV versus Dior, both have improved in line with the average, a bit more, I would say. We still have Vuitton that is a bit above average and Dior a bit below, but both are very close to the average. And we've been seeing improvement in Dior in all key nationalities and really great progress. The attitude towards cost, maybe I need to remind everyone that the priority for us is to invest behind desirability of our brands, behind retail, behind execution, behind quality because this is what matters.

And often in downward cycles, some people tend to cut investments so that they can protect margin. It can work on the short term. It's probably not the right call for the long-term and sustainable performance. So for us, it's very clear in the cycle, ups or downs, we need to continue to make sure that we invest the right amount of focus and money behind the brands.

Now it's not exclusive from being efficient, meaning that in everything we do, we need to make sure that whatever we spend goes to the customer and the clients, that there are no hidden costs, that we always find a way to be more efficient to do it. But that's the overall philosophy, and there's no reason that this is changing.

So if I go straight to -- and bridge with your question on the margin in H2, obviously, margin in H2, we will discuss in detail in January when we have closed the books. Bear in mind that even if we've seen a gradual improvement, we still have pressure from top line because top line remains negative versus previous year. So this is continuing to have some pressure and deleverage on gross margin. We are very much disciplined on the cost. We discussed in H1, the overall OpEx development, and we continue to be very mindful on the cost, but it will not be to an extent that it fully compensate the deleverage of gross margin as long as growth is negative. So in order to stabilize and grow the margin, they will need to be back to growth cycle.

On the impact of FX, next year seems very far. Maybe a comment on H2. However, on the top line, what we see is that Q4 will be probably stronger in terms of negative FX impact than Q3. When it comes to margin, given the way the evolution of the exchange rates are going, we will have a higher impact, both in translation and in transactional. However, we will also benefit from hedging gain that we didn't have in H1. So if we look at it net-net, we probably will have a slightly higher impact from FX for H2.

The next question is from Erwan Rambourg, HSBC.

Congratulations to the team on such a visible improvement. Three questions as well, please. Can you qualify the Chinese psychology right now at the consumer level? You talked about an underlying improvement beyond the base effect. I'm a bit biased because I happen to be in China this week. I'm wondering if beyond LV, which everyone is talking about here, what other assets are picking up meaningfully in this market?

Secondly, can you talk about the performance of Tiffany in Q3 and maybe give us an update on where you are in terms of the store revamp, the percentage of stores that have gone to the new concept? And any comment on potential pricing that you might take into consideration for both Tiffany and Bvlgari given the price of gold right now?

And then thirdly, maybe help us understand the path for Dior. I understand men's collection is coming in December, women's probably late -- mid or late January. What are the big [indiscernible] to expect over the next few quarters to accompany the pickup of that brand?

Thank you, Erwan. On Chinese psychology, I'm not sure I'm fully competent and qualified to look at -- to discuss and analyze Chinese psychology. What I can say is that -- and you probably noticed is that overall, the macro has not changed fundamentally in China. We still have the real estate market, which is complex. We still have a high unemployment. So it will -- we consider it's still going to take time until we have a rebound on China as a whole.

However, in terms of performance, you mentioned Vuitton, and it's true that we have been having very steep improvement for Vuitton. [indiscernible] is one very noticeable action that we've been taking and that has encountered success because if you look at [indiscernible], it's really a mix of different things. First, you come from the external and then you see these big shifts. There's a lot of fun, a lot of excitement, a lot of traffic. People want to get their picture. And even all our neighbors are very happy that it's driving so much traffic.

Then if you enter into the ship, you change totally the world and then you're thrown into a travel within Vuitton brand, very sophisticated, very authentic around travel and DNA of the brand. And then you exit through a store, which has quite a small surface, but is compensating with a lot of productivity and especially when it comes to gift, but also luggages. So it's a very interesting place.

The thing is it's not about -- we are not going to do 400 ships. But there will be here and there in cities and where there is halo that we can get also on the brand and on traffic, there will be some opportunities. Next will be Korea [ serum ], very different, but probably a very interesting one to wait for and to get the ticket to. Other than that, all the other business have progressed in China. So it's not only Vuitton. Dior has made a significant improvement also with China locally. We have also a better performance from Sephora. There was some also sell-in, probably it's more a phasing topic, but in China for VSOP because we were also stocking for the Mid-Autumn Festival.

So there are a lot of things that were happening that make us think that we are having weak signals that whenever we are able to connect, we are creating excitement and people are responding. So it's very encouraging once again, even if the macro environment has not changed in Q3. On the performance of Tiffany, there was a good quarter with an acceleration in the U.S., which is very nice because it's a big mix of Tiffany activity.

In terms of the transformation agenda, we continue to progress on icons. They are now around 60% of fine jewelry, growing double digit. So we continue to push on that. There was also the launch of a collection, Wings and Birds inspired from Glenmorangie that is starting very well. So it's really around craftsmanship and with an average price that is higher than the rest of the collections. Then we still have the legacy, a bit less than 30%, but down high single to low double digit. So that's for the product. So we are very happy with the progress and the continuation.

On the store network, we have now, as Rodolphe mentioned it, we have now renovated around 30% of the network. All the new stores are doing much better than the legacy stores. So again, it's a tribute to the fact that we've made the right decision. We continue to do it progressively because it's also very costly. But on top line, we are very confident that the agenda is really embarking acceleration of growth. And Ginza that started just last time we talked is also having a very good start.

On Dior calendar and [indiscernible], I think we had a few important [indiscernible], both men and women. So as you mentioned, the men collection will start to hit the stores in January. Then it will be gradual with some capsules for women, but probably more towards -- the women collection will be more installed towards the Q2 than the Q1. Then if you've seen, we have not waited for that. There is a very nice Lady Dior campaign that just started to rejuvenate the Lady Dior. And that with a commercial effort that we did has led Lady Dior to find its natural floor, and we are very optimistic about the reigniting of the growth of the Lady Dior. And in addition, Dior Toujours continues to perform very well. We've launched different format. So it's also now a material part of the line when it comes to bags for Dior.

So overall, we are pretty happy, both on the signals, but also on actions. And we've opened House of New York and the House of Beverly Hills, as Rodolphe mentioned, and the start is very good.

The next question is from Thomas Chauvet of Citi.

I have 3, please. The first one on Asia ex Japan turning positive at plus 2%. I assume China was also positive. Can you comment perhaps on the Golden Week holiday, which ended the middle of last week. We saw some very strong government data in categories like jewelry or beauty. Did you see an acceleration during Golden Week relative to your China performance in Q3 that encourages you?

Secondly, on Japan, which was the region, if I'm not mistaken, seeing the biggest sequential improvement on a year-on-year basis, but also on a 2-year stack basis, I think more importantly, what was the magnitude of decline you saw in Q3 in local Japanese spend versus the tourist spending decline from Chinese and Koreans notably?

And finally, on the U.S., can you comment on the division that drove the bulk of the improvement and more generally, your assessment of the health of the U.S. consumer given wealth effects, but also weakening labor market. Did you see some pull forward of demand over the summer, either wholesale or retail in anticipation of tariffs and price increase. I think Rodolphe mentioned during his presentation that Champagne had a bit of a tailwind, if I understood correctly. Was it advanced shipments? Was there any other division where you saw that phenomenon that drove perhaps a bit of an improvement in the U.S.?

Thank you, Thomas. So if we look versus last year in terms of performance, if you take the -- if we take Fashion and Leather Goods, minus 2%, and we break it down, minus 3% negative comes from Asia. It's overall 1 point from Southern Asia that improved materially, but still declining. Another point is from Greater Chinese that are much smaller than Southeast Asia, but declining more. And then Mainlanders, obviously, 1 point, a bit less actually. And this is what I mentioned, meaning it's now -- the cluster is now single-digit negative with Mainland China mid- to high single positive, sorry, and offshore still double-digit negative.

Then you have 1 point positive, mainly coming from Americans that are slightly up. Europeans are not moving so much and it's natural. And then on the rest, you have Japanese slightly down that is offset by the rest of the world that is slightly up, but Japanese are improving quarter-on-quarter. So that's the overall year-on-year performance when it comes to nationalities.

U.S., we saw an acceleration. Is there an anticipation of tariff or not, there might be, as you said, in some case, in the stocking of the distribution of Champagne, but we also saw some real improvement in Champagne, which is not what we see in Cognac. So overall, I'm not sure tariff is the main explanation of the progress that we've been seeing in the U.S.

The next question is from Edouard Aubin, Morgan Stanley.

Congratulations for the strong performance in a difficult environment. So just to follow up on Fashion and Leather Goods. So you have 3 important brands, Dior, Fendi -- sorry, Celine and Fendi, which have appointed a new creative director this year. And as Rod just mentioned, Fendi was announced today. So all 3 are very well regarded by fashion experts in terms of the new creative director.

So I'm not going to ask you to obviously give any figures, but how much of a commercial impact could it have on the Fashion and Leather Goods division next year? And would it be fair to say that you would be really significantly disappointed if this brand turnover didn't increase versus a decrease we are expecting for '25. So that's question number one.

Question number two, on the jewelry, the Watch and Jewelry division. So you reported a plus 2% at constant FX. I guess it's fair to say that the watch brands remain negative. And therefore, should we understand that both Tiffany and Bvlgari are both in line to slightly above the 2%? Would it be fair to say that? And more specifically, if you can comment on -- regarding jewelry brands, Bvlgari and Tiffany, on the performance in Greater China in Q3 versus Q2?

And then last question is on the group scope. So you have over 80 brands today, last time I counted versus about 2025 when the group was initially founded. I know you don't have a crystal ball, and it's going to depend, obviously, on opportunities you might or you might not have next year. But Cecile, is your best guess that the group will have likely more or less brands next year?

Thank you, Edouard. For your question, on Fashion and Leisure Goods and the impact that we will have and the confidence that we have in terms of impact when it comes to the renewal of creativity for Dior, Celine and Fendi. First, you have to understand that the timing of each one is very different. The first one in terms of products hit in the store are going to be with Celine, where we're now having the first bags coming to the stores, and then we will continue with the collection that will be in stores in November.

Second, for Dior, we already discussed that. So you have the timings in mind. And then Fendi, as you said, we just announced today. Maria Grazia gave the date of our first collection. So it will take time. So overall, the way you need to look at it is really around gradual and sequential improvement rather than a big giant difference, but we are very confident with the decision that we made. We are very confident because we had great feedback from the different shoes.

So we are now making sure that all this will be executed and we'll see when they will materialize in terms of top line. On [ F&LG ], yes, you're right. The plus 2% is a mix of watches improving, but remaining slightly negative. So yes, Tiffany and Bvlgari are outpacing the average of the growth for watches and jewelry for Q3.

In terms of the performance in China, it's been a bit different. It's been quite an improvement for Tiffany. Bvlgari is having soft trend. And at the same time, Bvlgari has accelerated in the U.S. where it still have a good opportunity for growth because from a low base, so we are happy with that. And then on your question regarding the group scope, 80 brands, more or less, I will not comment on that. Again, more seriously, we are looking at the portfolio on a continuous basis.

If there is something that -- or an asset or brand that makes sense for the group to have in terms of talent, in terms of brand and would be a good add-on, we will look at it. If on the other hand, there is a brand or an asset that we believe for the next cycle will be better with someone else, then we will look at it. So there is no dogma on the portfolio. It's a process that is continuous, and I have nothing more to report on this call.

The next question is from Carole Madjo, Barclays.

A couple of questions from me, please. The first one to come back on the margin of the division FLG. I think you talked about for '26 need to see a growth cycle to return to a margin improvement. So is the view of a growth of 3% to 4% top line still enough in your view to, I guess, have a flattish margin, thinking about next year in, let's say, normal environment? That's the first question.

And second question, can you also talk about the health of the more entry price as traditional consumer and mostly in the U.S. Do you feel that they are also getting a bit stronger at your brands? And again, back on the U.S. market, there could be also a bit more inflation coming up in the fourth quarter on the back of the tariff adaptation mitigation. So how do you feel the consumer can be resilient on the back of all of that news flow?

Thank you. On your question regarding margin, I think it's fair to say that in order to stop to deleveraging in gross margin, we will need some growth. And I think we've been very consistent in saying that. So on your question on Fashion and Leather Goods, at some point in order to stabilize the margin, yes, we will need growth to come back.

On U.S. market prices, as far as our brands are concerned, we've always said that we would only use very moderate price increase if we had to look at inflation, tariffs, but that wouldn't be a big driver of the price because at the end, what comes for us is really around the mix and the value and that the first and foremost priority is really to ensure that whenever we increase price, we have increased the value. So we have increased the quality, we have increased the functionality. So that's really how we work. Now probably in the U.S., there will be moderate price increase in order to compensate for tariffs.

The next question is from Oliver Chen, TD Cowen.

Congrats, Cecile and Rodolphe. Nice to be with you here. As we think about U.S. and the fourth quarter comparison, what should we note in terms of it getting a bit tougher? And then as you look at the U.S. ahead, any color on regions or the nature because the consumer confidence has been volatile. And obviously, it's very dynamic here as well.

And then, Cecile, on your earlier comment on negative double-digit declines in tourism as it applied to the China cluster, what do you see ahead for that in terms of, are there a lot of aspects out of your control? Or what are you monitoring? And then third, I think you mentioned this theme a few times, but self-help for next year. Would love your context on what you mean by self-help. I think it's related to the creative changes and different timing of different stories at different creative initiatives.

Thank you, Oliver. In terms of basis of comparison, I don't know if you recall, but last year, so we said -- if we simplify, it's around 4 points for the group point tougher than it was in Q3, if you want to do a very simple exercise. It's going to be easier in Japan because we continue to have a basis of comp versus last year when the yen was weak and there was so many tourists purchasing and making the growth in Japan is going to subside. So we are going to have an easier comp base here.

But it's true that U.S. last year with the election, there was a kind of rebound with the election that created the kind of surge of consumption, and it was quite big. And as well, you have to remember that dollar last year end of the year was wonderful, which created quite a lot of tourism in Europe for the festive period. And that situation is not exactly the same this year given the strength of euro this year.

Then on the Chinese offshore, this is the part where it's mostly linked to the basis of comparison. And if you want to look at it in a simple way, you can make the assumption that last year growth in Japan was mainly tourist. It was mainly Chinese. So you can reverse [ January ] just like that to look at the Chinese performance of offshore double-digit negative. So it's really a reversal and an effect of base of comparison from Japan last year.

Self-help is many things. So yes, it's around the creative renewal, but it's also around retail initiatives. If you look at the retail initiative and the retail store, and I don't talk about the Louis, but all the flagships that we've been opening. So for Vuitton, it would be New York, Montana [indiscernible] Season and some other. For Dior, you have the 2 new house in the U.S. For Tiffany, you have Ginza that opened recently. You will have a flagship of Louis in Ginza as well opening at the end of the year. So we continue to really invest and give priority to reinvent and recreate excitement with the retail as well, and that's an ongoing part.

And then on products, you've seen that we had the launch of La Beaute at Louis Vuitton. Again, it created excitement, traffic. It also was very selective. So it's not something that is supposed to be core at any point in time, but it gets quite a good traction and a good start. And then I mentioned the Lady Dior a bit earlier with the campaign of GWA with commercial focus and effort, and it has improved a lot.

So it's not only -- we shouldn't only -- even if it's an important one because it's in many brands, and it's a big step, we shouldn't only look at creative renewal. There are also plenty innovation, retail initiative. Sephora performance deserve also quite a big applaud and it's everywhere in its both traffic and average basket. So I think it's really a lot more versatile that only focusing on when the creative designer will be ready in stores.

The next question is from Ashley Wallace, Bank of America Merrill Lynch.

I have 3 questions, please. The first one is just on soft luxury versus hard luxury. When you look at the consumer trends, I was wondering if you see any relative shift in appetite for soft luxury versus hard luxury. You mentioned that Fashion & Leather 7-point improvement is mainly coming from traffic or volumes. Do you also see a volume uplift in Watches and Jewelry? Or is this acceleration driven by something else, maybe some more pricing considering where gold is?

The second question is just on Perfume & Cosmetics. If you could talk about what drove the small sequential acceleration in the division, maybe by region or product category, especially in light of some of the pure-play fragrance companies bagging a softening outlook in the second half?

And then my last question is just on the kind of self-help and easier comps that you bagged on your outlook for next year. For Fashion & Leather specifically, I was wondering if you could help us think about which drivers of growth you're most excited about for the year overall, if it's price mix or volumes? And then actually -- sorry, if I can sneak one clarification in. I think there were 2 questions on Golden Week and maybe I missed the answer. So if you could maybe just repeat what you said on Golden Week?

Yes. So maybe I start with Golden Week. Overall, it's very fresh. So we don't have the full feedback, but it seems that it went according to expectation. So that's for Golden Week. On the Mid-Autumn Festival regarding Wine and Spirits, given the structure of the business, it's too early to say. So we can comment that next time.

On the trajectory on soft luxury, the average basket hasn't changed so much. So we are really looking at traffic and volume when it comes to improvement. And soft versus hard luxury, for me, it's always a complex question because it's different categories altogether with different comparable basis and dynamics. What we are seeing in watch and jewelry is, as I said, you have an improvement in the U.S. You have improvement in Japan and in China. And overall, it's a mix of volume, but it's also a mix effect because, as you know, we are in the middle of the transformation of Tiffany. And so the idea is really to push the icons that are more priced, and that's why it also creates a mix effect at the same time and price is very moderate.

On P&C, we had some acceleration in the Q3 and quite a good performance. It was very similar in the different categories, so whether you take fragrance, makeup or skin care, but difference between the brands. So Dior outperformed on makeup and skin care given many innovation. I mean, Rodolphe named a few, so I will not come back on that. And then we had a very strong performance on fragrance from some other Maisons like Guerlain, Maison Francis Kurkdjian [indiscernible] with Givenchy. But overall, as a division, it was quite comparable between the different categories.

Easier comp next year. So first, we are going to do the Q4 that we will discuss in January. And I think the macro being still very challenging and volatile. I prefer not to talk at this stage about next year, but we'll have ample time to discuss it. What we know is that the base of comps will be easier. And I mean, you've seen the performance of this year. So it's quite natural to have that in mind and quite mechanical.

But rather than that, because it's not what interest us the most, what interests us is really to capitalize on the fact that within the improvement, local clientele are strong. And for us, it's very important because it's where the quality of the growth lies and it's where we can really capitalize on our assets in order to build brand desirability and continue to make sure that the local consumer is bonding with the brands. So we'll continue to do that, and we'll do that consistently for next year.

I think we have another 2 questions on the list. So I suggest we take these last 2 questions and then we can wrap up.

The next question is from Piral Dadhania, RBC.

So 3 quick ones from me, please. On Sephora, I believe earlier in the year, there was comments around the competitive environment, particularly online and the pricing competition from Amazon Beauty in particular. Could you provide an update as to how that's evolving and perhaps what Sephora has done to counter that given the positive commentary you've made in relation to traffic and volumes in that business?

The second is on the Louis in Shanghai. I'm not sure if you can share this, but could you perhaps help us quantify the contribution to the minus 2 F&LG number in Q3 was or perhaps to the mid- to high single-digit positive Mainland Chinese organic for F&LG was from the Louis given the high traffic and the better-than-expected performance of that initiative?

And finally, just following up on the M&A question. I was just wondering if you're able to provide any comment on Giorgio Armani and whether anything you could say on that in relation to the provisions that were put in his will and LVMH being specifically mentioned?

Thank you, Piral. On Sephora U.S., Sephora U.S. performance was very strong. You have to keep in mind that Sephora is everything, Amazon is not, because Sephora -- the model of Sephora is really it's a destination. It's where you can find brands 1 over 2 only at Sephora. And it's where you have beauty consultants where you have a brand. People that don't say, I will buy some Amazon, but they will say, I go to Sephora. So it's a very different model.

And again, we have a Q3 where -- and also in the U.S., both the traffic and the average basket have increased. And we've been launching Rhode in the U.S., in the U.K. and in Canada, and it's been a record-breaking launch. So today, for us, it's very simplistic to compare us to Amazon because we are very different. We are very different, and we are overperforming in all our stores. It's all about stores and destination for us.

On the Louis, so the Louis contribution, I think if you look at the numbers, it's not the biggest part of the number. What is interesting and what is very important in the Louis is that you have so many visitors, it creates a halo. But also it's a space where with a very small store are much smaller than the one that you can have, especially the one that we recently opened, you compensate with productivity. And what is quite -- I don't know if it's anecdotical, but it's very interesting, is that it's now the first -- one of the first store when it comes to luggages. I'm looking at Rodolphe so that I don't say something wrong.

And so when you think about they came out from the museum looking at the travel relationship with the brand and then you buy a luggage, I think it tells you something very interesting about the way you want to activate beyond transaction and bond with the consumer. Then on Armani, we were very honored obviously, to have been named as partners. Other than that, I have no comment to make.

And the next question is from Chris Gao at CLSA.

Congrats on the resilient results. I have 2. So firstly is regarding the Chinese demand pickup. I have one quick question. Is it mainly coming from existing consumers coming back? Or is it more contributed by the new high-quality spenders are coming in? So this is a breakdown by consumer profile.

And the second question is regarding the Tiffany's improvement in China. So could you please share more with us about which press segmentation has been seeing more outstanding versus others, if there's any specific signals on that? And maybe one quick follow-up is regarding Tiffany versus Bvlgari. Tiffany has been showing stronger trends versus Bvlgari. So basically, what metrics is comparing the 2 labels? Do you see on Tiffany as stronger? Is it traffic conversion or the ticket size on Tiffany has been growing stronger than Bvlgari?

Thank you. On the Chinese acceleration, overall, it's -- when we say it's volume and traffic, there is no distortion of the pyramid. So what we are seeing is not changing the pyramid and it's fairly consistent. Again, the average basket has not changed from one quarter to the other, and it's fairly consistent.

On Tiffany versus Bvlgari, I think it's very difficult to compare brands that have a very different story and maturity. For example, if you look at the brands, whether it's in China or whether it's in the U.S., they don't have the same history. They didn't start at the same time. Tiffany is very much -- a big part of the mix is U.S. Bvlgari was bigger in China and is now going quite heavily with a lot of progress in the U.S. from a smaller base.

So your paradigm between where you are in terms of maturity portfolio is a bit different. So I'm always not very at least to compare things that are not fully comparable. What we can say is that the brands are improving. It's true that Bvlgari has a bit softer trend in China, with Chinese. But overall, Bvlgari is improving in Japan. It's improving in the U.S. So there's not really something to conclude on that. It's just a game of basis of comparison and impact from tourists Japan last year.

Have a great evening. And as usual, we are fully at your disposal to have follow-ups and go into more detail if need be. Have a great evening. Thank you very much.

Welcome to our H1 results conference call. I'm here with Rodolphe. We are very happy to have you with us, and we will start now. What we'll do is I will start with the key highlights, then Rodolphe will give you a bit more details in terms of the divisions and activities performance. Then I'll go through the key numbers, and we will open for Q&A. Maybe before we start, I invite you to go to Page 2 and read the safe harbor statement. So I give you a few seconds to do that.

And then I propose we start with Slide 3. LVMH showed good resilience in the first half of 2025, recording EUR 40 billion in revenue, down 3% on an organic basis with disparities by region, as I will explain later. In terms of profit, the profit from recurring operations is EUR 9 billion, down 15% versus the first half of 2024, although operating margin remains excellent at 22.6%, which is 150 basis points above the first half of 2019. Finally, very strong financial situation with the free cash flow increasing to EUR 4 billion and gearing at EUR 15.2 billion.

Turning to Slide 4, a few qualitative comments on the key highlights of this first half. The start of the year has been disrupted by several layers of macro uncertainties, as you are well aware, as well as currency swings impacting short-term performance, albeit with a pocket of resilience. More specifically, we saw solid local demand in Europe and in the U.S. and a tangible sequential improvement when it comes to Mainland China in the second quarter. In addition, we saw very abrupt currency swing in Q2, which eroded the purchases of American and Chinese consumers abroad and especially in Japan, where we faced a very abnormal growth of 57% in the same period last year.

In this context, we focused on the qualitative development of local clientele as well as on the following priorities; continued emphasis on product innovation, coupled with the start of new creative chapters in certain Maisons, selective investments in retail project to continue to build long-lasting competitive advantage for our Maisons. And on cost, we capitalize on current context to initiate long-term structural efficiencies beyond short-term mitigation efforts in order to maximize also profit fall-through when the headwinds subside. Rodolphe will now comment on numbers and initiatives by business group, and I will come back on financials in more details after that.

Thank you, Cecile. We'll start with Wines & Spirits. Turning to Slide 7. The Wines & Spirits business Group recorded EUR 2.6 billion in revenue in the first half of 2025. This represents a 7% decrease on an organic basis versus the first half of 2024 and an 8% decrease on a reported basis after taking into account a negative 1% currency impact. Broken down, Champagne & Wines generated EUR 1.4 billion in revenue in the first half, representing a 2% increase on an organic basis. Revenue was unchanged on a reported basis after taking into account a negative 2% currency impact. Cognac & Spirits delivered EUR 1.2 billion in revenue in the first half, a 15% decrease on an organic basis and a 16% decrease on a reported basis after taking into account a negative 1% currency impact.

Finally, profit from recurring operations reached EUR 524 million for this business group, down 33% year-on-year, with the operating margin for the division coming to 20.3% in the first half of '25, slightly above the second half of 2024. On Slide 8, the first half performance of Champagne & Wines benefited from improving trends in the second quarter in Europe, driven by stronger sell-in for Champagne and in the U.S. by improving trends at Veuve Clicquot and Dom Perignon as well as continued international expansion of Rose Wines. Champagne also benefited from improved sell-in in Japan in the second quarter.

Moving on to brand initiatives. Moët & Chandon

celebrated the 75th anniversary of the Formula 1 championship as its official partner and collaborated with Pharrell Williams for the global launch of a limited edition collection to elevate the birthday celebration experience. Ruinart and Veuve Clicquot gained market share on their key markets and Veuve Clicquot continued to support its strategy -- its value strategy, sorry, with the launch of La Grande Dame 2018 vintage. Dom Perignon launched a new brand platform and unveiled a communication campaign, highlighting its values and ties with artists. In cognac and spirits, the uncertainties related to tariff weighed on cognac demand in the U.S. and China, although Hennessy depletions were better than sell-in in the U.S. Hennessy also highlighted the versatility of its VS quality to enhance cocktail recipes with a communication campaign called Made for More. Elsewhere, a new marketing campaign for Glenmorangie featured Harrison Ford and the Maisons Distillers.

Turning to Fashion and Leather goods. On Slide 10, revenue reached EUR 19.1 billion for the first half of 2025, down 7% on an organic basis and down 8% on a reported basis after taking into account a negative 1% currency impact. Profit from recurring operations has reached EUR 6.6 billion, down 18% year-on-year, notwithstanding good control of operating expenses, which were further reduced compared to the first half of 2024. As a result, operating margin reached 34.7%, well above long-term average of about 30% in the first half.

Moving on to Slide 11, which details performance by brand. Louis Vuitton continued to display its pioneering mindset and exceptional craftsmanship through a wide array of initiatives, including a new collaboration with Takashi Murakami as well as spectacular fashion shows from Nicolas Ghesquiere and Pharrell Williams presented at the historic Cour d’'Honneur of Palais des Papes and the Centre Pompidou. The Maison also unveiled a unique new space in Shanghai, drawing amazing interest well beyond the city itself and highlighting Louis Vuitton's ability to express its DNA, the art of travel through a wide diversity of differentiating experiences. Louis Vuitton also continued to innovate in its core leather lines and announced the launch of La Beauté Louis Vuitton, its new cosmetic segment with first products available this autumn. Lastly, Louis Vuitton kept building on its involvement in major sports, including as official partner of Real Madrid.

Moving on to Christian Dior. The brand began a new chapter in its history with the arrival of Jonathan Anderson as Head of Creation for Men's and Women's Couture and accessories with the [indiscernible] show achieving more than 1 billion views on social media. This follows the presentation of the final collections designed by both Maria Grazia Chiuri and Kim Jones for women's and men's, respectively. Dior also saw good success of new bag innovation, including the D-Journey and Dior Toujours, which was complemented with new shapes and the unveiling of its new high jewelry collection, Diorexquis designed by Victoire de Castellane.

Moving on to share some highlights of our other brands. Loro Piana continued to perform well, capitalizing on its icons and exceptional fabrics, including a new on in wool and silk. Celine enjoyed a successful debut show by its creative designer, Michael Rider, just a few weeks ago as Givenchy's new Creative Director, Sarah Barton, whilst Loewe announced Jack McCollough and Lazaro Hernandez as the Maisons new creative directors with their first runway show upcoming in October. Loewe also celebrated the 10th anniversary of their puzzle bag with a number of limited edition designs, while Fendi saw the successful launch of the Mamma Baguette a larger softer version of the icon created by Silvia Venturini in 1997. Finally, Rimowa continued to elevate its retail network, inaugurating a new flagship store on New Bond Street in London, and Berluti announced its partnership with French actor Victor Belmondo.

Moving on to Perfumes & Cosmetics on Slide 13. Revenue remained stable on an organic basis at EUR 4.1 billion and decreased 1% on a reported basis after taking into account a negative 1% currency impact. Profit from recurring operations came to EUR 425 million, down 4% year-on-year, leading to an operating margin of 10.4%.

Now to Slide 14 and to look at some specific brand highlights. Parfums Christian Dior remained resilient and maintained its leadership in its strategic markets with good growth, notably in China, Americas and the Middle East. The new Eau de Parfum version of the iconic J'adore and the launch of Dior Homme reinterpreted by Francis Kurkdjian contributed to this resilience, along with La Collection Privee high perfumery line and reach with a new Bois Talisman scent. In makeup, the Maisons enjoyed the global success of its Forever foundation as well as rising demand for the latest additions to the Juradict and Backstage ranges.

Parfum Christian Dior also pursued its sustainability initiatives and committed to rewilding large natural habitats in partnership with the Worldwide Fund for Nature. A few comments on our other brands. Guerlain benefited from strong growth in Europe, the U.S. and the Middle East as well as from good performance in key franchises such as [ Rouge ] in makeup, L'Art & La Matiere and Aqua Allegoria in fragrances. Also doing well in fragrances were Givenchy with its 3 key franchises, L'Interdit, Gentleman Society and Irresistible as well as Maison Francis Kurkdjian and Acqua Di Parma, which opened the door of its newest flagship, Rue Saint-Honore in Paris.

[indiscernible] also delivered significant outperformance. Finally, in makeup, Benefit successfully launched BADgal Bounce mascara, one of its historical bestsellers and consolidated its leadership in brow care.

Next, turning to watches and jewelry on Slide 16, where revenue for the first half of 2025 reached EUR 5.1 billion, unchanged on an organic basis and down 1% after taking into account a negative 1% currency impact. Profit from recurring operations came to EUR 762 million in the first half of 2025, down 13% year-on-year. EBIT margin reached 15%, improving sequentially compared to the second half of last year.

On Slide 17, we showcase some of the initiatives of our watch and jewelry Maison, starting with Tiffany, whose iconic lines, Tiffany T, Lock, HardWear, Knot continued to achieve strong growth and to rise in the mix. The Maison also continued to move forward with its store renovation plan with nearly 1/3 of the network now featuring the new store concept and outperforming and enjoy the recent opening of its latest flagship store in Europe on Via Monte Napoleone in Milan. Tiffany also unveiled its latest high jewelry collection, Sea of Wonders inspired by Jean Schlumberger's iconic designs.

Bulgari kicked off celebrations of the Year of the Snake in China with a unique art exhibition in both Shanghai and Seoul inspired by one of its most iconic and successful designs, Serpenti. Bulgari also continued to capitalize on its very strong legitimacy at higher price points with its Polychroma collection in high jewelry and a new record for the world's thinnest tourbillon watch with the Octo Finissimo Ultra Tourbillon, marking its 10th world record in fine watchmaking. The Maison also unveiled its new flagship store in Milan on Via Monte Napoleone And its newly expanded manufacturer in Valenza.

Finally, Chaumet and Fred continue to innovate on their iconic lines, Bees for Chaumet -- Bee for Chaumet and Force 10 for Fred. In watches, TAG Heuer returned to Formula 1 as official timekeeper in 2025 and titled Partner of the Grand Prix Monaco, the Maison complemented its Formula 1 line of watches and launched a new design-to-win marketing campaign, taking inspiration from one of its most legendary ambassadors, Ayrton Senna. And finally, Hublot celebrated the 20th anniversary of its Big Bang collection and its 160th anniversary.

Now moving on to our last business group, Selective Retailing. On Slide 19, you can see revenue reached EUR 8.6 billion, up 2% organic and flat reported after taking into account a negative 2% currency impact. Profit from recurring operations rose to EUR 876 million in the first half of 2025, an increase of 12% year-on-year, with the operating margin rising 110 bps to 10.2%. Final slide of our business group, turning to Slide 20. Sephora had a good start to the year with solid growth in Americas, Europe and the Middle East, supported by the excellent performance of its store network, where Sephora continued to gain market share in its key geographies as well as in more recent ones like the United Kingdom.

All product categories contributed to growth with notable momentum in fragrances. And Sephora, of course, continued to cultivate its selection of exclusive brands as well as its commitment to diversity and inclusion. DFS showed improving profitability. In the first half of 2025, it undertook a series of measures to reduce cost and streamline its operations, including the decision to close the Galleria in Venice. And finally, Le Bon Marche once again posted revenue growth driven by its differentiated range of products and rich array of cultural events. The group also strengthened the organization of its department stores by implementing a shared governance structure for La Samaritaine and Le Bon Marche.

This concludes the business group presentation, and I will now pass back to Cecile for financial results.

Thank you, Rodolphe. Moving on Slide 22. First half revenue reached EUR 40 billion, down 3% on an organic basis and down 4% on a reported basis, including a negative 1% currency impact. If we move to Slide 23 on the geographical balance, you can see that our regional mix remains well balanced with Europe, 25%, U.S., 25%. Asia is down 2 points to 28%. Japan is down 1 to 8% and other markets increasing 2 points to 14%, which I will explain further on the next slide so that you understand the geographical move of the performance sequentially. Moving to Slide 24. Here, you have a good illustration of the regional disparities that I highlighted in my introduction, and it deserves a bit of observation. Europe and U.S. are flat, whereas trend in Asia are much more negative, which is not particularly surprising in the context of a downturn in China, but it's worth highlighting.

The impact of currencies I was mentioning in the introduction on tourism is very visible and require a few explanations. In the West, the impact of tourism is measured, but visible. Euro strength penalized touristic purchases in Europe in Q2, whereas the U.S. region improved modestly. In Asia, the impact of tourism is much more significant as Japan benefited from exceptional demand last year driven by the yen weakness, and we saw the reversal of this in Q2. Outside Japan, Asia improved in Q2, driven by local consumption.

Turning to Slide 25, which summarizes organic revenue growth by business group. A few comments here. Wine & Spirits and Fashion & Leather Goods are both down 7%. In the case of Wine & Spirits, it is mostly driven by demand in cognac. In the case of Fashion and Leather Goods by Asia and weaker tourestic business. Perfume and Cosmetics are flat. Here, too, there are significant contrast between local markets, which are positive and Travel Retail which remains negative. Watches and jewelry are flattish with modest growth in jewelry offset by watches. The contrast with fashion and leather goods come from Asia and Japan, where jewelry brands face much easier comps. Europe and U.S. are not very different.

Finally, Selective Distribution delivered 2% organic growth, driven by Sephora and with DFS improving sequentially versus the second half of '24, but remain, of course, impacted by tourism. Slide 26. Organic growth in Q2 was close to the first quarter at group level, but with 2 big moving parts. The first one we discussed is fashion and leather goods. We faced more difficult comps than group average in Japan in Q2 last year, and this market explains most of the sequential slowdown. divisions improved sequentially. Wine & Spirits mostly driven by better selling in Champagne in Q2 and selective distribution driven by better trends at both Sephora and DFS.

Let's now move to operating income by division on Slide 27. Wine & Spirits saw the most significant drop driven by negative volume and mix impact, along with continued inflation in cost of goods sold. Fashion and Leather and Watches and Jewelry are close to group average, but with different situations. In Fashion and Laser, top line evolution led to gross margin deleverage while we managed to contain OpEx. And in watches and jewelry, profits are resilient in jewelry despite continued investment in the renovation of distribution network at Tiffany, watches saw a more pronounced decline in percentage terms. Perfume and Cosmetics reflect contrasted trends, modest decline overall, driven by the brands which are more exposed to Asia and Travel Retail. Parfum Christian Dior was less exposed to these headwinds given its particularly selective distribution strategy. Finally, Selective Distribution delivered a very good performance driven by Sephora which is growing both in revenue and profits and very tangible efforts to reduce the losses at DFS.

A few comments, Slide 28 on the income statement. Firstly, gross margin delivered as a consequence of a sales decline, including under utilization of capacity and some inflation in cost of goods sold. Operating expenses also contributing to the decline in profits, but were contained with a 2% decline in marketing and selling expenses and a 5% decline in G&A, which reflects the discipline in cost in the current context. I will comment the financial results on a specific slide. Maybe stop on the tax rate, which increased by 4 points to 30.9%. 100% of this increase is connected to the booking of the first part of the tax in France. So we've booked EUR 317 million. The overall amount is a bit more than EUR 700 million, and everything will be paid at the end of the year.

Finally, minorities declined in line with profit at MH, partly offset by the reduction of losses at DFS. Slide 29, a few comments on operating income constituents. As you can see, perimeter impact was very negligible. Currencies had a negative EUR 225 million impact, reflecting limited transactional and translation impact from currencies, but also the anniversary of relatively significant hedging gain in H1 last year. In the second half of the year, we will have higher transactional and translation impact if we extrapolate the rates that we have today, and we should benefit from stronger hedging gain.

Moving on Slide 30 on the financial result. The cost of debt is broadly unchanged. The main evolution is linked to the revaluation method in mark-to-market of our investment financial portfolio, which led to an increase in value, but smaller than the one we had in the year before. So it creates a negative contribution to the financial results. It's not a profit or loss. It's purely theoretical, and it's the way we've chosen to account for this financial investment. A few words on the structure of the balance sheet. Currencies had a significant impact on most balance sheet lines in euro terms, and this applied both to assets and liabilities. So the structure of the balance sheet is, as a result, quite similar to end of last year. Inventories remain under control and stable versus end of December at 16% of assets.

Slide 32 illustrates the very strong financial position of LVMH with, as I said in the beginning, a EUR 4 billion cash generation in H1, up 29%. This evolution is explained by a strong improvement from working capital, offsetting fully the decline from profit. Taxes contributed a bit more than EUR 500 million. This is not including the French tax that we will pay at the end of the year. And finally, investments also decreased modestly in euro terms in the tune of EUR 370 million. Overall, this leads us to an H1 where our net debt declined by almost EUR 2 billion and gearing now stands at 15%. And we are proposing an interim dividend as a consequence that will be stable.

Maybe a few words to conclude the presentation, and then we will move to Q&A. If we look at H1, we can see that the performance was distorted by a macro context with a significant impact on touristic demand. Whilst the situation has weighed on our gross margin, we were able to contain deleverage on OpEx, and we will continue not with a view to do less. It's very clear that we will continue to invest, but with a view to do and manage to find more structural efficiencies. Currency moves allows us also to focus more qualitatively on our local consumers. And we believe it's a healthy situation to build a closer and qualitative relationship locally with our customer, and it has proven on many initiatives, it has proven important and successful.

Product innovation has been and continue to be a key focus with tangible successes across all of our brands. There is more to come in retail product offering and new creative chapters as commented by Rolf Finally, we have been selective and demanding, but we have kept investing in the most promising projects, and you have a good illustration of this dual mindset in the delivery of the free cash flow in the first half. Investments remained elevated, but we were able to generate incremental cash through lean management of inventories in particular. Against this backdrop and beyond the current macro disruption, we are very confident for the future in the ability of our Maisons to continue to build desirability and build on their competitive advantages when the macro headwinds subside.

Thank you very much for your attention, and I propose that we move now to Q&A.

[Operator Instructions]

And our first question is from Louise Singlehurst from Goldman Sachs.

I just wonder if I could follow up on a couple of the early points that Cecile you mentioned at the beginning of the presentation. I think you mentioned that you're seeing a tangible improvement in China. And I wondered if you could just give us some color around what you are seeing, particularly within the Fashion & Leather division, but also just broadly across the business given the scope of the offer within the LVMH portfolio?

And then secondly, I think you touched upon long-term efficiencies. And again, I wonder if you could give us some color around where is the most opportunity? What are you looking at within that and divisional color would be very helpful.

Efficiencies.

Thank you, Louise. On China, yes, we have seen tangible improvement locally. We've seen that in Q2 mainly. And this has been driven also by some initiatives and some repatriation of the big drop that we've been seeing in touristic demand from Japan. So overall, it has improved a few points in terms of growth. It's still negative, but it's high single-digit negative and much improved. So that's on the part of the Chinese. What we see in China is that whenever we do and we come to create initiatives as Louis Vuitton has done, for example, you take the boat in Shanghai, very unexpected. It's a space that is absolutely unusual that mixes both exposition around the story and the culture of the brand, retail space lifestyle, something that only Vuitton can do.

And this is creating a lot of traffic. There are many visitors. The retail space is starting with a very strong start. And overall, it creates also a halo on the brand. So you might like it, you might not like it. We are not going to build 400 boats. But overall, we see that we are able to create connection and qualitative development on the local clientele. We mentioned China because it was your question, but it's much beyond China. Then regarding the question on efficiency, I think the context is opening a door.

And as a CFO, I tend to take that door in looking at how we can become more efficient structurally. And this is not in order to manage the cost, but it's really to be able to unleash some resources and continue to push investment behind our brand and behind their competitive advantage, which is absolutely key for the future and for the growth. And we have been having different conversations. So it can range from looking at different retail equation in terms of how we define the cost per square meter on the CapEx we do and depending on the type of store. It can be around how do we manage the relationship with the agency when we do a show and where it makes sense to have margin for the agency, where it makes sense to use our own suppliers.

So it's a lot of different things. Overall, there are many opportunities, I believe. It will take time. So it's not like shortcuts. And I think you should be happy that it's not easy cuts because easy cuts tend to go for less investment. And the idea is really to create and to go for efficiency opportunities.

Our next question is from Charles-Louis Scotti from Kepler Cheuvreux.

The first one is on your store network. I think the selling expenses were still up year-on-year in H1, but A&P declined in line with the organic sales growth. So a question regarding your store network. Last year, there were still 125 stores openings across the fashion leather goods and watches and jewelry divisions. What should we expect in 2025? And some of your peers have started to rationalize their retail footprint. Should we expect a similar approach for some of your brands?

And could you please also -- the second question, update us on the progress of the restructuring plan at Moët Hennessy. And when the related savings are expected to be visible in the P&L? And should we consider the 20% EBIT margin reported in H1 as a trough for the division? Or could the continued decline of cognac sales keep weighing on the profitability?

Thank you. On store network, there are different realities behind the different activities. So you know that on Tiffany, we continue to renovate the network, and we are done at 30%. So there's still a way to go. And by the way, every execution of store is the proof that it's a right investment because stores are overperforming when we open them. The latest one was very early or not it was 1 week ago probably in Ginza. It's a beautiful store. I invite you to go there if you have the chance.

On stores, we have a certain number of projects. If you look at Vuitton, Vuitton has been opening stores in New York, 57th. We've opened Dubai. We've opened Macao Four Seasons. And all these stores are growing strong double-digit. So it's really around execution, having them at the right place. In the meantime, it doesn't mean that we keep opening the stores, and we are not managing the network. So if you look depending on the countries, depending on the brands, there are also closure of stores that we believe are not going to create value or growth for the future.

So it's a very close management between opening and closings. There are still big projects. There will be some in H2 for the year in New York and Rodeo Drive. But we are also very mindful in order to ensure that when we open, we close and we are monitoring the more -- the one you don't see, let's say, very closely in terms of efficiency, productivity at the store. So we'll continue to do that. So there will be openings, there will be some closing. But all in all, we are continuing to develop our retail network.

A&P is decreasing, yes and no because what you see decrease is marketing cost, but as a percentage of net sales, it doesn't. So there is an absolute value decrease, but not necessarily in percentage of net sales. And in marketing, you have different things. So it's not all A&P. It's not all media. If you take, for example, perfume and cosmetic, you will find in your marketing expenses all the management of POSM, which is all the furniture you have for the store plus the samples, et cetera. On that, we are going for efficiency because we believe it can be further optimized. So when you look at the number, don't go straight into shortcut into saying, okay, they cut communication. That's not the case.

In terms of Moët Hennessy and the plan, we've been having a review of the plan that has been worked by Jean-Jacques, Alexandre and the team. It's not a restructuring plan. It's a full plan to restore both the growth and the efficiency of Moët Hennessy. It's not a plan that is going to deliver overnight and in the next quarter. So it's rather going to be a plan for several quarters. And I think we start to see the impact not before the second part of '26 because when you go for structural change and efficiency, you need to take the time to do it. So we don't expect any significant impact this year on that front, but we are very confident that the team has got the plan under control and is delivering.

We will now move to our next question from Antoine Belge from BNP Paribas Exane.

First 3 questions, if I may. First of all, it's a bit like the previous quarter. So there was a deceleration of 4 points in Fashion & Leather. In Q1, it was almost all due to the Chinese. So is that still the case because you pointed to the improvement locally, but also the tough comp and the tourism. So yes, maybe the -- how can we explain 4 points of deceleration by cluster? Is it all Chinese or also some other nationalities?

Second question is still on Fashion & Leather. So in the previous quarter, Louis Vuitton was doing a bit better. So I mean, in terms of the different performance between LV, Dior and maybe Celine, any changes and maybe one that has been a bit more resilient and maybe another one a bit less?

And finally, still on Fashion & Leather. So you mentioned -- I think you didn't want to use the word cost cutting, more efficiency. So is there maybe a willingness to protect a 35% margin in that division, something that you achieved in both H2 last year, but also in H1 this year?

Thank you, Antoine. My English is not that good, but I knew the term I wanted to use, and it was efficiency exactly for the reason that for me, efficiency is sustainable, cost cutting is not sustainable. So the difference is not a detail. But having said that, on your question on the sequence the deceleration for Q2 on fashion and leather goods, let me share what we see in the different nationalities. What we see is that European are unchanged versus Q1. Americas locally broadly unchanged, decelerating a bit, but broadly unchanged. But tourism decelerated for Americas because you know that we started the year with the U.S. dollar at EUR 1.04, and we are now at EUR 1.17. So there was a big swing that created a slowdown on that part, but it doesn't make a big impact to the overall picture.

So the bulk of the decline comes, as you said, from Asia and more specifically from tourism in Japan, which is the reversal of what we saw last year. And this is really true for Chinese and to a lesser extent to other Asian clientele. And at the same time, we saw some repatriation, meaning that Chinese local demand improved, but this did not fully offset the weaker demand in Japan. So that's the overall qualitative comment on the move in terms of nationalities.

Then your question on brand performance and LV having been a bit better. Is it still the same? What we've seen in Q2 is really what I explained around nationalities and geographical mix. We don't see any big change in -- between Maison, meaning LV is still a bit better is still a bit less than average. But overall, we don't see a distortion in the Maison performance. What we see is really the distortion which is driven by Asia and the overall macro around Asia and currencies.

On your question regarding Fashion & Leather Goods. So first, you've seen that first semester, we continue to have a very high margin level at 34.7%, which is a great result given the deceleration on sales. Philosophy is very clear. We need to ensure that we invest what we need to invest behind growth, and we need to make sure that we are able to mitigate and maintain a high level of margin. Now if you look at short term, it's very difficult to predict because it will mostly depend on top line because if you look at your gross margin, the mitigation of your gross margin deleveraging is pretty linked to the pace of your growth. So we hope there will be good news. We have a lot of initiatives. We have a bit of easier comp in China. Macro is still full of uncertainty until it's not anymore, and we continue to work on costs. So that's what I can say on margin for fashion and leather goods, but we are very committed to maintain the level of margin high.

We will now move to our next question from Thomas Chauvet from Citi.

My first question on the U.S. Could you comment on the drivers behind the U.S. growth improvement beyond the repatriation of tourist spending? I mean what were the main division or the key initiatives that contributed? Was there also a slight benefit in your U.S. growth figures from the U.S. tariffs uncertainty given you have quite a few wholesale businesses there with champagne, cognac, perfumes or watches? Or was there some advanced shipments? That's my first question.

The second question on Dior. There's been a lot of management changes at the house over the last year with, in particular, Pierre-Emmanuel Angeloglou, [ Benedetta Petruzzo ] now working with [indiscernible] on top of, obviously, Jonathan Anderson for the creative leadership. Where do you see the key opportunities now that you have a full house to adjust product strategy, distribution, communication? And do you have any further feedback from the first show that was held in Paris a few weeks ago beyond what we read in the specialist fashion press.

And just finally, on FX, when you mentioned the second half outlook, so greater hedging gains expected, but at the same time, probably worsening translation transaction impact. Where does that leave you in terms of the potential margin dilution in the second half from FX? It wasn't very material in the first half.

Thank you. Looking at the U.S., maybe the U.S. performance and improvement. several drivers. First one on Wine & Spirit, where we had some improvement in Champagne globally, but also in the U.S. The second one is that sequentially, we had a better performance and an acceleration of growth at Sephora. So that played a role there. And the last one, to a lesser extent is the sequential improvement of the performance at DFS even if they are still impacted by tourism. So all this effect lead you to the improvement because, as I said, on the rest, the American demand overall is broadly unchanged a bit less. And then there was tourism, but which doesn't impact US.

On your question regarding advanced shipment in tariff, we don't have that. We have not pushed shipment to distributors or wholesale. We have -- we might have some stocks on our balance sheet in the U.S., but we have not put some advanced shipments. On Dior, I think it's a mix of a lot of things. First, your question on Jonathan Anderson, yes, the feedback were very positive. Also, you've seen that it reached 1.1 billion views after the show and more than 200 million lives. If you go into the stores, which I encourage you to do and you meet with the salespeople and the clients, everyone is very excited, very impatient. So I think we'll all have to be a bit patient because going from the first men show until the collection actually in the stores, it will take a bit more time.

Short term, we have some initiatives and catalysts. We have especially the 2 opening I was mentioning in New York and Rodeo Drive that are coming soon. And in terms of product, we continue to have some success on the Dior Toujours and the D-Journey that we discussed already for a few quarters. So it's a sustainable success and ramp-up. So we are very confident both in terms of product communication. You've seen that Jonathan will be in charge of men, women in terms of ready-to-wear and bags, sorry, and leather goods. And I think it's also a good way to ensure full consistency on the brand vision on the brand communication. So we are eager to see all that as you are and as the clients are.

Then on FX, I think given the evolution during the first semester, it's indeed very difficult to predict an improvement in terms of FX impact in margin because, as you said, both translation and transaction will probably be higher. We have opportunities in hedging gain, but probably it won't lead to an improvement between H1 and H2. So the best we can expect is the same and probably a bit more impact.

We'll move now to our next question from Luca Solca from Bernstein.

My first question is on pricing. I wonder if you feel that your major fashion and leather goods brands, Vuitton and your have the right price architecture. I'm asking this because we've seen smaller and more expensive brands, take Cucinelli as an example, growing significantly faster, but also cheaper brands like Ralph Lauren or Coach growing faster. So I was wondering whether you're experiencing possibly a need to fine-tune your price architecture.

And in this slide, my question would be on dissecting the minus 9% that you produced in Fashion & Leather goods in the second quarter. If you could tell us a bit more about the drivers there in terms of price, mix and volume, that would be ideal. Thirdly, on the senior management organization, we saw that recently, Michael Buerk has been coming back to a role in the U.S. I wonder if you could update us on how the senior management organization is developing and on Michael's new responsibilities, please?

Thank you. Is the price architecture right was your first question, Luca. What we are seeing in terms of short-term performance, let's all be clear, it's really around macro and currency swing. When it comes to price architecture, we had a lot of debate post COVID where we had a very specific demand and there was a debate around industry pricing. For us, pricing is very clear. It needs to come with an improvement in the product, whether it's quality, whether it's an adding functionality. We had a meeting the other day with and they're doing some innovation on the puzzle, and they were adding functionalities material. And in that case, it makes sense. And by the way, the clients are responding very well.

So this is the core of what we do in price. We might do moderate pricing when it comes to offsetting some inflation or in certain case, tariff, but it's not the core of it. You mentioned Cucinelli. We have the fastest-growing quiet luxury brand in the group. So we know what you're referring to. And then on more specifically price architecture, if you look at the way Vuitton execute the portfolio of product, you have a first very focused approach on elevating the brand. I remind you that some people tend to say Vuitton has a very dispersed portfolio. More than 60% is leather goods at Vuitton. So you can also say it's the most focused brand.

But having said that, the brand is very much focused to elevate on their many important clients and upper level, bringing every time more sophisticated product very high quality, very desirable. But you also need to connect with the younger generation. You also need to have some offer where you can meet them, onboard them and then they can go through your value ladder. And we refuse to do that with cheap bags. So the way we do it is Vuitton. And Vuitton is always the best desirability, always the best quality. And so you use accessible product category in order to do it perfume, small leather goods, and there are a few other. So that's really how we work on portfolio.

We don't work on price segmentation. We are not Coca-Cola, but we are working on bringing the best product. And with that, making sure that the value that is in the product is recognized by our clients. So that's really what we do. And this is what we will continue because when you look at it, Louis Vuitton has continued to gain market share. And this is, if you remove the current context, something where Louis Vuitton has been leading for a while in the industry. 9%, so maybe let me put it in numbers.

If you take Greater China, it's around 35% and Mainlanders are down mid-teens and Greater China is a bit more. The rest of Asia is 15% of your sales, down mid- to high teens depending on countries. So if you sum that up, you should get very close to 9% and then Japanese played a bit of a role. So that's on the mix. And then on Michael Buerk, sorry, you asked about the drivers on price mix and volume. Price very moderate when it comes to the evolution of sales for fashion and leather goods in Q2. Mix flat. So the bulk of it is volume, which is not surprising because if we say it's a reversal of very specific purchase made last year by tourist, it's quite consistent that came from volume.

And then on Michael in the U.S. I think we have -- we are very lucky in this group to have people with a lot of experience who have been there for many years, having done different Maisons and they can go and make sure that they transmit experience and help the team. So in the case of Michael, I think everyone is very pleased to see him join the U.S. and the teams over there.

Now we will move to our next question from Zuzanna Pusz from UBS.

Just 2. So maybe on margin, now I appreciate it's obviously a bit tricky to comment ahead of that time. But in the context of the recent currency moves, I was just wondering -- and I'm also looking at consensus, which expects margin for Fashion & Leisure goods up 70 basis points next year. Can you tell us if it's actually doable to have the margin, I don't know, flat next year? Or if you can at least help us quantify the potential margin headwind at current rates?

And then second question, I guess, just on current trend. Again, I know it's probably a bit of an annoying one, but you've just delivered 9% sales decline in fashion leather goods. I think consensus is looking for roughly minus 1% in H2 for the division. So I'm just wondering how we should think about it? What are you seeing in terms of current trends? It's a little bit difficult for us because as you say, there is that unwind of tourism in Japan in Q2 last year. And I think it wasn't there anywhere anymore in Q3. So if there's any way you could help us a little bit how to think about Q4 -- Q3, that would be very helpful.

Thank you, Zuzanna. And I start with that probably. Also, we are not going to give a precise number because given the macro, it will probably be wrong. So let's get the macro out. It's still -- we still have a lot of uncertainties until everything is settled, it's not. So on macro, I wouldn't make any guess in what we know and what we -- what is under our control. In terms of comparison basis for the Chinese, it starts improving in July. So Q3 will probably recycle easier basis of comparison. Japan was indeed less growing in Q3, but still growing 20% last year.

And then you have also to keep in mind that in Q4, we had a strong rebound in the U.S. because of a surge in demand post election. And so we will also face that comparison basis. So having said that, we still have a certain number of initiatives in all our activities and Maison and Fashion & Leather Goods. And we are confident that the initiatives will bear fruit. But the question is more on the macro and the speed at which it will recover, acknowledging that Chinese macro has not recovered yet and will still take a bit time. So yes, we see improvement, and we are very happy. Yes, basis of comparison will ease. But Chinese macro is probably not out of the wood yet.

Having said that, we are very confident because, as you know, we don't work for the next quarter. So we are very confident that once this headwind subside, we can regroup with growth, and we are preparing that.

We'll now move to our next question from Edouard Aubin from Morgan Stanley.

So just 2 questions for me. On the Selective Retailing, which I guess top line was a bit better than expected, and it was the biggest beat in euro terms for the group in terms of division. As you mentioned, if you could please elaborate on what you mentioned earlier, Sephora and DFS. I think you talked about Sephora doing better than expected or accelerating in terms of what you're seeing in terms of market share and how you explain that? And in terms of DFS, if I understood correctly, the losses kind of narrowed, but you're still not at breakeven. So that would be helpful. So that's question number one on Selective Retailing.

And then the second question is on scope. And I think in the late '80s, you had about 25 brands. I think you have over 80 brands today. I'm sure you're not going to give us in terms of an indication on a brand-by-brand basis of what you intend to do. But philosophically, are we more likely to see an expansion of your kind of portfolio of brands? Or are we more likely to see a reduction over the next 1, 2, 3 years? Just wondering where you see the group? How you see the group evolving in the next 2, 3 years on that respect?

Thank you. So on selective retailing, I'll start with DFS because it's probably shorter. The losses are narrowing, as you mentioned. We are still not breakeven, but the work that has been done by the teams is very important in terms of putting the cost under control and closing a few destination in Gallerias. So we are going towards breakeven, but we are not there yet. On Sephora, Sephora accelerated in Q2. Sephora's model around exclusive brand, differentiation, great experience in terms of shopping together with the development of the network in the U.K. and in some other countries is working very well. So we are very happy with the performance, gaining market share in brick-and-mortar nearly everywhere, resisting well on the Internet, but you know that the model of Sephora is absolutely to provide the right experience and exclusivity of brands. So it continues to deliver.

And on top of that, they've been managing cost very well. So you also see an improvement both in the top line, but also in terms of profitability, and that's a great job done by the teams there. On scope, it's -- do we intend to increase the number of brands? I think it depends on opportunities. We will probably not miss good opportunities if there are. And at the same time, we will not keep brands if we believe they are not a good add-on or we are not the right operator to operate them. You know we did sell Off-White and Stella McCartney last year. I think portfolio is a living organism. And I think it really depends on opportunities. So difficult to give a theoretical number in terms of number of brands. This is not the way we look at it.

We will now move to our next question from Erwan Rambourg from HSBC.

Most of my questions have been answered. Well done on defending margins despite the context. Maybe 2 follow-ups on locals versus tourism flows. I understand Japan's basis of comparison is easing. Can you maybe remind us of what happened around the Olympics in Q3 last year? I had the sense that tourism was quite active in Europe at that stage, but not really luxury purchasers. How does that help move from Q2 to Q3 with a bit better Europe potentially? So that's my first question.

Second question on tariffs. I think, Cecile, you were quoted saying 15% would be a good outcome. I'm not asking you to guess what the outcome will be, but what have you been working on mostly? Is it intercompany pricing? Is it end consumer pricing? Is it possibly developing the supply chain further for Vuitton in the U.S.? What are you spending most of your time tariff related on before we get the outcome?

Thank you, Erwan. On the basis of comparison and your question around Europe, specifically for Q3 -- we don't see much movement in terms of basis of comparison there. The real change in Q3 will be around China. And the real impact in Q4 will be on the surge of the growth of Americans last year. But, we don't expect a very big impact on comparison basis. On the tariffs, I think we're working on a lot of things with or without the tariffs. And when it comes to efficiency in the model, trying to rebuild some oxygen agility in the it can be sought for the tariff, but it can also be sought for other situation.

To answer more concretely your question, and I think we had this discussion in Q1, there are several levers. Not all our activities have access to all levers. So we could do some moderate price increase in some activities, fashion and leather goods. We wouldn't do that in wait and see because we don't want to increase prices there. In terms of supply chain, there are a few activities where we have levers to optimize the flows and the supply chain versus the topic around tariffs. So Vuitton, we mentioned we have some local production in the U.S., and we can increase that. If you take Tiffany, you have production in Europe, and production in the U.S. There are ways to optimize the flow so that U.S. serve U.S., Europe, serve Europe. So there are different levers. It's different between brand and Maisons. Probably the one that will be the most difficult is wet because it has the less levers because you can't move the production by definition. And your prices, you can't play too much with your prices. So probably that's where there might be an impact on margin.

So we still have 3 questions. I suggest we take these 3 and then we can wrap up the call.

We will now move to our next question from Oliver Chen from TD Securities.

Regarding your operating margin containment, it's been really solid. What should we know about the fixed versus the variable key drivers in gross margin and OpEx and also marketing dollars or rate as a percentage of sales, particularly within the Fashion and Leather division?

Second point, you made a lot of really helpful comments on innovation plans ahead. Just how would you compare or contrast Dior relative to Louis Vuitton and what you're doing to continue to electrify the brands and innovate at all price points? And then finally, the U.S. Sephora business, it's been a more competitive market in the U.S., particularly with Amazon and Beauty and other players like Ulta. Just what were you seeing with Sephora U.S. as well? It sounds like you're very encouraged. And I know you had mentioned some of those competitive pressures previously.

Thank you. On operating margin, it's overall on selling expenses because we gave a comment last year when we were talking about Japan around fixed and variable in terms of rents. Except for Japan, it's more fixed than variable, a bit less so in China, but it's around half. So that would be for the selling cost. Japan was really an exception as to the depth of variable rent that it bears. Then marketing, it depends how you see it. If you have a specific initiative and you need to push your communication, it will increase, but it's also partly variable. If you have less, then you probably -- depending on your market, you can -- there's part you can adjust.

But I think ultimately, the way to look at that and the context is opening the door for that is how can we create more efficiencies. And there are opportunities to create efficiencies. And it's a bit everywhere. It's -- if you take -- so marketing, I mentioned POSM. So when you decrease marketing, it's not necessarily that suddenly you stop to communicate. When you look at fashion shows and you work with agencies, to look how you structure and decouple the different pieces of the cost so as to pay margin only on the creative part and make sure that you have the most efficient possible on costs that are not related to client experience or creativity is something you can work on.

So there are many ways you can work on. And I think fixed and variable is a bit theoretical because the idea is really how you get the most efficiency out of your cost in order to get the most of investment behind your brand. On innovation, I wouldn't compare Dior and Vuitton honestly. We have -- we are in different cycles, but we are very lucky in LVMH to have very best talents and very best creative directors. It's different journeys. But overall, I think we are opening a new chapter as we discussed in terms of creation. The innovation that I mentioned are working well. And both brands are great, honestly, and they don't have the same role and the same life, and it's good like that.

And then when it comes to Sephora in the U.S. Sephora is everything Amazon is not actually. because Sephora is about experience, differentiation, exclusive brand, enjoyment of shopping experience. And that's really what is Sephora, and that's what we are pushing in terms of competitive advantage and that's bearing results because of the growth and the market share. So yes, there is competition. But at the end of the day, where we invest and our model is continue to deliver very strong results. So we are very happy with that.

Cecile, you said Sephora U.S. was positive. Did I hear that correctly?

Yes.

We're going to move to our next question from Daria Nasledysheva from Bank of America.

I have 2. First question is on Fashion and Other margins. Could you please help us contextualize how much pressure out of the contraction came from gross margin versus operating expenses, particularly for this division in the first half?

And then my second question would be on the beauty market. Could you please share an update on trends that you saw by region or category in Perfumes & Cosmetics?

Thank you. On the P&L, the biggest impact came from the gross margin deleveraging connected to the decline in sales, underutilization of capacity and also depreciation in inventory and in some cases, still some inflation in cost of goods sold. The OpEx were contained in terms of percentage because as you -- as we mentioned, we decreased sales and marketing OpEx by around 2% and G&A by 5%. So you have your order of magnitude and then you can make the calculation on the deleverage. So we are containing OpEx, but not to the extent that it compensates the deleverage of gross margin, which is not a surprise. On Perfume and cosmetics, we see overall good performance on local markets. and on different countries.

Then what you see in Perfume & Cosmetics is that perfume is the best performing categories, then it would be makeup and skin care a bit less. And in terms of geography, the brands that are the most exposed to travel retail, especially in Asia are the brands that are the less growing versus the average or sometimes having a decline in sales. So that's the way to look at it. But overall, we have Parfum Christian Dior, which is the biggest one. Given the fact that they've been choosing to be very selective in distribution, this headwind they can resist better. And they've been doing quite some innovations in makeup that worked particularly well. So they've been performing very well in makeup in the first part of the year.

And we'll now move to our next question from Carole Madjo from Barclays.

Just 2 questions from my side. The first one, back on Loro Piana and the news flow you saw that the supply chain concern. Can you give us your take on the situation? How you're thinking about fixing this issue? And have you seen or do you expect to see some impact on the brand perception in the key markets? That's the first question.

And then the second one, maybe to conclude and think about more longer-term perspective on, again, FLG and mostly LV. How should we think about the future growth drivers of the brand Louis Vuitton in the future as it becomes bigger and bigger. And as China to become, I think, more mature as a market? So do you still view price mix as the main driver in the future? I think you're launching beauty in the fall. Should we expect like more of these new ventures coming up in the future to diversify and drive more growth in the business? So just some color on the long-term growth prospects of LV could be interesting.

Thank you. So on Loro Piana, we were not satisfied with the situation, especially because we've been working a lot since last year on reworking on all the processes, making sure that we had more audit in place. So we've done like 5,000 audits last year. And what happened in Loro Piana overall is a subcontractor of a supplier that was hidden from us. So we couldn't know, let's say. It's not that we cannot do better in terms of control, but we didn't know. And the day we knew we stopped the relationship with the supplier. This topic is beyond Loro Piana. It's a topic that the full industry in Italy is facing.

And it's something that we will have all to manage collectively with the association, with the government as a whole. In the meantime, for us, it's very clear. We are reinforcing control. We are reinforcing the way we look at the relationship and the way we are going to control both in terms of how we do the audit, how we look at the grid of audit. But it's not a European issue. So to your point, it's not going to create and it shouldn't create an impact on the image because it's not what happened. Still, we need to make sure that collectively with everyone, we can solve or at least improve the situation of the industry that should be a very fair practices and clean supply chain.

So we need to continue to work on that. And obviously, there are still progress to be done. And long term for Fashion and leather goods and LV, if we look at the fundamentals of Vuitton continue to lead in many markets. Why? Because first, Vuitton is totally dominating the retail space. I mentioned the recent stores that have been opened, growing strong double-digit. I mentioned the kind of unexpected spaces like do we like it or we don't, but it's -- you need to go and see that place. But it's unexpected. It's something only Vuitton can do. It's not -- we are not going to do 400 of those, but there might be a few down the road. In terms of product, there is absolutely no topic around changing pricing or changing strategy.

The strategy of Vuitton is focusing on always delivering the most sophisticated and qualitative product to retain the most important client and get some other from the upper segment. And the other one is connecting and continue to recruit from the younger generation. And that is not around down trading or doing cheap products, but it's around using the firepower and the DNA and the desirability of Vuitton and replicating it on more on accessible categories. So you mentioned beauty, which is one, perfume is one, small leather goods is another one. Then the third big competitive advantage of LV and I think this audience would like it because we like numbers. It's the financial muscle and the firepower best productivity, best profitability, best cash generation and leading to an unparalleled firepower to invest, invent and continue to lead.

So we are very confident on the long term once we go through the short-term headwinds on Vuitton, but also on our other brands. But because you mentioned about Vuitton, this is my answer. So it's not about price mix. If you look at Vuitton in the past 4 or 5 years, volume was 1/3 of the growth in terms of drivers. So we need to really understand the fundamentals and the way this brand has been growing year after year. And I think we need to extract a bit from the quarter because volumes have been fully part of Vuitton story, and they will continue to be.

There are no other questions in the queue.

Thank you very much. I hope it was helpful. And obviously, Rodolphe and the teams are here to answer any follow-ups, and we'll be happy to see you all soon. And if we don't, have a great summer. Thank you very much.

Thank you.