SIMPLIFYING CHRISTIAN DIOR LVMH GROUP STRUCTURES: REGROUPING THE ENTIRE DIOR BRAND WITHIN LVMH

Transcription

1 NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA PROJECT AIMING AT SIMPLIFYING CHRISTIAN DIOR LVMH GROUP STRUCTURES: REGROUPING THE ENTIRE DIOR BRAND WITHIN LVMH AND OFFER BY THE ARNAULT FAMILY GROUP ON PUBLICLY HELD CHRISTIAN DIOR SHARES April 25 TH, 2017

2 SUMMARY OF CONTEMPLATED TRANSACTIONS GREATER COMMITMENT OF FAMILY SHAREHOLDER PUBLIC OFFER ON CHRISTIAN DIOR BY ARNAULT FAMILY GROUP¹ *** ACQUISITION OF CHRISTIAN DIOR COUTURE 2 BY LVMH STRENGTHENING OF LVMH S FASHION & LEATHER GOODS DIVISION BY INTEGRATION OF CHRISTIAN DIOR COUTURE SIMPLIFICATION OF STRUCTURES Notes: 1 Via Semyrhamis, a company of the Arnault Family Group 2 Includes Grandville (100%-owned by Christian Dior) and its subsidiary, Christian Dior Couture 2

3 SUMMARY OF CONTEMPLATED TRANSACTIONS Planned public offer by Arnault Family Group on all Christian Dior shares it does not already own 1 Semyrhamis, a company of Arnault Family Group, intends to file a simplified mixed public offer on Christian Dior shares: 172 in cash and Hermès International shares for every Christian Dior share. This primary offer is complemented by two secondary offers: cash-only and Hermès International shares-only This represents a 14.7% premium over Christian Dior s last share price, an 18.6% premium over its 1-month average 2 and a 25.9% premium over its 3-month average 2 Planned acquisition of Christian Dior Couture 3 by LVMH Enterprise value of 6.5bn, i.e. 15.6x EBITDA 4 Unanimous support of Boards of Directors Christian Dior s Board of Directors is unanimously favorable to Arnault Family Group s intent to file an offer Christian Dior s and LVMH s Boards of Directors are unanimously favorable to the planned acquisition of Christian Dior Couture Notes: 1 Amounting to 25.7% of share capital, after taking into account treasury shares 2 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18 th, Includes Grandville (100%-owned by Christian Dior and its subsidiary, Christian Dior Couture) 4 Adjusted EBITDA last 12 months as of March 31 st, 2017, after accounting for Christian Dior s expenses ascribed to Christian Dior Couture 3

4 EVOLUTION OF GROUP STRUCTURE CURRENT SIMPLIFIED GROUP STRUCTURE SIMPLIFIED STRUCTURE FOLLOWING THE CONTEMPLATED TRANSACTIONS Arnault Family Group Arnault Family Group 5.8% of share capital 74.1% of share capital 84.9% of voting rights 5.8% of share capital Christian Dior May reach up to 100% of share capital² from 74.1%, depending on results of offer 6.3% of voting rights Christian Dior 100% Christian Dior Couture Branch 1 6.3% of voting rights 41.0% of share capital 56.8% of voting rights 41.0% of share capital 56.8% of voting rights LVMH 100% LVMH Christian Dior Couture Branch 1 Notes: 1 Includes Grandville (100%-owned by Christian Dior) and its subsidiary, Christian Dior Couture 2 Voting rights may reach up to 100% from 84.9%, depending on results of offer 4

5 KEY HIGHLIGHTS OPPORTUNITY FOR CHRISTIAN DIOR SHAREHOLDERS TO SELL THEIR SHARES AT AN 18.6% PREMIUM OVER THE 1-MONTH AVERAGE SHARE PRICE, VALUING THE COMPANY AT ITS NET ASSET VALUE STRENGTHENING OF LVMH S FASHION AND LEATHER DIVISION THROUGH ACQUISITION OF ONE OF THE MOST ICONIC BRANDS WORLDWIDE HIGH GROWTH POTENTIAL FOR CHRISTIAN DIOR COUTURE EPS-ACCRETIVE TRANSACTION FOR LVMH FROM THE FIRST YEAR REGROUPING OF THE ENTIRE DIOR BRAND WITHIN THE LVMH GROUP GREATER COMMITMENT OF ARNAULT FAMILY GROUP SIMPLIFICATION OF STRUCTURES 5

6 PUBLIC OFFER BY ARNAULT FAMILY GROUP ON CHRISTIAN DIOR SHARES 6

7 KEY TERMS OF OFFER PUBLIC OFFER ON CHRISTIAN DIOR SHARES Offer initiated by Semyrhamis, a company of Arnault Family Group, targeting 25.7% of share capital Primary mixed offer: 172 in cash, and Hermès International shares per Christian Dior share Secondary offer in cash: 260 in cash per Christian Dior share Secondary offer in shares: Hermès International shares per Christian Dior share 14.7% premium 1 over Christian Dior s last share price, an 18.6% premium over its 1-month average share price 2 and a 25.9% premium over its 3-month average share price 2 Mix & match option, giving shareholders the possibility to opt for either more cash or more Hermès International shares, within overall offer limit of 8.0bn in cash and 8.9 million Hermès International shares No intention to implement a squeeze-out procedure within 3 months after completion of offer Intention unanimously well received by Christian Dior s Board of Directors Appointment of one independent expert to assess financial terms CONDITIONS Conclusion of financing under satisfactory terms Clearance (décision de conformité) by French Financial Markets Authority (AMF) INDICATIVE TIMETABLE Filing of offer: late May 2017 Notes: 1 Based on Hermès International closing share price as of April 24 th, 2017 adjusted for planned detachment of balance of 2016 dividend 2 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18 th,

8 ESTIMATION OF CHRISTIAN DIOR S NET ASSET VALUE Value of 41% stake in LVMH Christian Dior Couture enterprise value Net financial debt 3 Others 4 Christian Dior NAV Christian Dior NAV / share Based on LVMH s 3-month average¹ share price 40.4bn 45.2bn bn + (1.5)bn + (0.2)bn = Based on LVMH s 1-month average¹ share price 42.7bn 47.5bn 263 Notes: 1 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18 th, Net financial debt at Christian Dior level 3 Other assets and liabilities at Christian Dior level 8

9 ILLUSTRATION OF OFFER TERMS In per share For each Christian Dior share: 172 in cash and Offer represents premium of: % % % % Hermès International shares 88 1 Offer Spot share price 1-month avg. 3-month avg. 6-month avg Christian Dior NAV Notes: 1 Based on Hermès International closing share price as of April 24 th, 2017, adjusted for planned detachment of balance of 2016 dividend 2 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18 th, Range according to market value reference used for LVMH (1-month and 3-month average share price) 9

10 AN OPPORTUNITY FOR CHRISTIAN DIOR SHAREHOLDERS Offer price represents: - a 14.7% premium over the April 24 th, 2017 closing share price PREMIUM - an 18.6% premium over the 1-month average share price¹ - a 25.9% premium over the 3-month average share price¹ Value offered in line with net asset value LIQUIDITY Christian Dior shares currently trading at all-time-highs Liquidity opportunity for Christian Dior shareholders Note: 1 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18 th,

11 STRENGTHENING OF LVMH S FASHION & LEATHER GOODS DIVISION BY ACQUISITION OF CHRISTIAN DIOR COUTURE 11

12 KEY TERMS OF TRANSACTION ACQUISITION OF CHRISTIAN DIOR COUTURE 1 BY LVMH Enterprise value of 6.5bn, i.e. 15.6x EBITDA 2 Vendor loan 3 granted to LVMH for a maximum of 24 months, allowing timing flexibility for refinancing Boards of Christian Dior and LVMH unanimously favorable to planned acquisition, based on work of their respective financial advisers PRIOR STEPS BEFORE TRANSACTION Information / consultation of Christian Dior employees representative bodies Confirmatory due diligence Finalization of the legal documentation, to be submitted for approval to the Boards of Christian Dior and LVMH as related-party transaction Review of key financial terms of the transaction by two independent experts (one appointed for Christian Dior and another appointed for LVMH) INDICATIVE TIMETABLE Closing of the transaction expected during 2 nd half of 2017, subject to statement of compliance on public offer on Christian Dior shares Notes: 1 Includes Grandville (100%-owned by Christian Dior) and its subsidiary, Christian Dior Couture 2 Adjusted EBITDA last 12 months as of March 31 st, 2017, after accounting for Christian Dior s expenses ascribable to Christian Dior Couture 3 At an interest rate of 1% per year 12

13 CHRISTIAN DIOR COUTURE KEY FIGURES Revenue: 2.0bn (Last 12 months at end March 2017) EBITDA: 418m 1 (Last 12 months at end March 2017) COP 2 : 270m 3 (Last 12 months at end March 2017) 70 years of know-how 198 stores 5,000 employees Present in more than 60 countries 93% of revenue from retail +12% annual revenue growth 4 since 2000 ENTERPRISE VALUE: 15.6x EBITDA 5 Notes: 1 Adjusted EBITDA, after accounting for Christian Dior s expenses ascribable to Christian Dior Couture 2 Current operating profit 3 After accounting for Christian Dior s expenses ascribable to Christian Dior Couture and for net income from associates 4 Compounded annual growth rate over the period 5 Based on adjusted EBITDA (see note 1) last 12 month at end March

14 A UNIQUE ASSET 1 AN ICONIC FASHION HOUSE, ONE OF THE MOST PRESTIGIOUS BRANDS WORLDWIDE 2 AN UNPARALLELED POSITIONING IN LUXURY 3 GLOBAL NETWORK OF DIRECTLY OPERATED STORES, ENSURING COMPREHENSIVE CONTROL OVER DISTRIBUTION AND BRAND IMAGE 4 UNIQUE PORTFOLIO OF STRATEGIC REAL ESTATE ASSETS 5 GENERATED REVENUE OF 2bn, DOUBLED SINCE 2011, WITH HIGH GROWTH PROSPECTS 14

15 AN ICONIC BRAND CHRISTIAN DIOR, THE WORLD S MOST WELL-KNOWN FRENCH NAME Christian Dior RENOWNED DESIGNERS Yves SaintLaurent Marc Bohan Gianfranco Ferre John Galliano Raf Simons Maria Grazia Chiuri Hedi Slimane Kris Van Assche Victoire de Castellane

16 93% OF REVENUE GENERATED IN OWN STORES GLOBAL NETWORK OF 198 STORES 33 in North America MAIN REAL ESTATE ASSETS 71 in Europe 20 in China Avenue Montaigne, Paris New Bond Street, London Omotesando, Tokyo Ginza, Tokyo 16 in Japan 53 in Asia 5 in Latin America (excluding Japan and China) Seoul 16

17 A BRAND EXPERIENCING STRONG GROWTH REVENUE 1 ( bn) 2016 REVENUE BREAKDOWN BY PRODUCT LINE 1 +14% per year² Watches & Jewelry Shoes 6% 9% Accessories 10% Fashion 26% Others 3% Leather 46% COP 1,3,4 ( m) 2016 REVENUE BREAKDOWN BY REGION % per year² 252 Asia 45% Europe & Middle East 43% America 12% Notes: 1 Actual figures as of December 31 st 2 Compounded annual growth rate over the period 3 Excluding Christian Dior s expenses ascribable to Christian Dior Couture and including net income from associates 4 Current Operating Profit 17

18 A STRATEGIC ACQUISITION FOR LVMH STRENGTHENING OF BRAND PORTFOLIO Integration of one of the most iconic brands worldwide Regrouping of the entire Dior brand within the LVMH group HIGH-GROWTH PLAYER Exceptional creative momentum Numerous investments completed over the last years to accelerate development in America, China and Japan 18

19 KEY FINANCIAL IMPACTS FOR LVMH 2016 PRO FORMA EARNINGS PER SHARE 2016 PRO FORMA GEARING¹ (Unaudited) (Unaudited) +2.7% % % Before transaction Pro forma Before transaction Pro forma Note : 1 Net financial debt / equity ratio EPS ACCRETION FROM THE FIRST YEAR LIMITED IMPACT ON FINANCIAL STRUCTURE: Gearing of 35% post transaction 19

20 NEXT STEPS 20

21 INDICATIVE PUBLIC OFFER TIMETABLE FILING OF OFFER Late May 2017 AMF CLEARANCE (DÉCISION DE CONFORMITÉ) AND LAUNCH OF OFFER June 2017 OFFER DURATION 3 weeks 21