Innovations and Startups: LVMH, the First European Company on the Stock Exchange

The French luxury giant is now worth 271 billion euros, 5 billion more than Swiss Nestle.

Thanks to a 1.72% increase in its share price on the Paris Stock Exchange, to 537 euros, the French leader in luxury, on Tuesday, February 9, became the first capitalization in Europe. It overtook Swiss agrifood giant Nestle, whose stock market record is at 113.2 francs per share since September 2019.

According to a note from RBC analysts, the French giant remains a “leading asset” for investors because its growth engines, the Louis Vuitton and Dior brands, are “running at full speed” despite the health crisis.

The performance of the French conglomerate, which is now worth 271 billion euros (as against 264 billion for Nestlé), is crowned with an exceptional stock market performance. LVMH gained 5% in the market share this year after registering a growth of 23% in 2020.

On 23 November, it crossed the 250 billion euro threshold in market capitalization. But at 245 billion from 11 November, it broke the nominal record for the largest capitalization in the history of the Paris market at 244 billion euros. Set by France Telecom on Thursday 2 March 2000, this record will therefore stand for 20 years, 8 months and 9 days.

Since the end of 2015, the performance of LVMH stock has been different from that of CAC 40. This is an increase of 270% in six years, compared to a 22% increase in the benchmark index of the Paris Stock Exchange. The French champion now weighs more than 14% of the CAC 40’s total capitalization, down from 4% at the beginning of 2010.

And while it is true that the group has not survived the global crisis, the results published two weeks ago far exceeded expectations. Despite a 16% drop in its turnover, to 44.7 billion euros, “LVMH showed remarkable resilience in the face of the unprecedented health crisis the world is going through in 2020”, according to its CEO. , Bernard Arnaud believes the group is “in an excellent position to build on the recovery that the world is hoping for in 2021”.

The numbers seem to support that. Sales picked up again in the second half of last year. The situation is improving in China and the US. The group’s star brand, Louis Vuitton, has regained its form. Ditto for Christian Dior, Fendi, Céline, Lowe, and Hennessy.