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Perfumes and Cosmetics Watches and Jewelry «Haute couture» and Ready to wear Leather Goods and Accessories 8
Fueled by need to conform Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 JAPAN TAIWAN / S KOREA HONG KONG / SINGAPORE CHINA INDIA Source: The Cult of the Luxury Brand, Rhadha Chadha & Paul Husband, Nicholas Brealey Publishing, 2006 9
Grow th Average Grow th 20% 17% 15% 10% 5% 0% 6% 11% 10% 5% 14% 3% 0% -5% 5% 9% 9% 7.5% 8% -5% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006* 2007* 2008* Source: Bain & Comp., Lehman Brothers estimates 10
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Source: Merrill Lynch & Cap Gemini World Wealth Report 2006 13
Sales % by Nationality 30 25 20 23 18 25 22 26 20 2004 2014 23 15 10 5 0 1 1 3 Other Korean Other European Source: Merrill Lynch Luxury Goods Team 2 American Japanese Middle- East 4 5 11 7 6 2 1 Indian Russian Chinese 14
70 60 50 40 30 20 10 0 50-60 50 32 20 Chinese Americans Russians Japanese Source: World Travel Organization, in million departures 15
MAX MIN AVERAGE CURRENT Ev/Sales 4.8 1.6 3 3.2 Ev/EBIT 30.2 8.4 16.2 14.6 P/E 50.4 11 24.5 21.3 16
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Prestige Prestige & & luxury luxury Identifying worldwide companies that can pretend to enter the universe Ideas generation Potential candidates Company reports Sell-side research Buy-side research Potential investments Validation of investment 19
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LARGE CAP BUY SIDE ANALYSTS Sector themes 9 buy-side analysts INVESTMENT STRATEGY & PROCESS 3 quantitative analysts LARGE CAP FUND MANAGERS and DEDICATED ANALYSTS Country, sector and style 11 fund managers 2 dedicated analysts SMALL and MID CAP FUND MANAGERS and ANALYSTS 3 fund managers 3 buy-side analysts SGAM Invest Secteur Luxe SGAM Fund Equities Luxury & Life style MACRO ECONOMIC RESEARCH SGAM Macro Economic scenarios 5 economists EQUITY TRADING DESK Technical analyses Liquidity test Daily news on stocks 6 people External Sell-Side Research Company analyses 21
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GB 9,2% IT 4,1% SGAM's Luxury universe Others 9,6% US 29,6% GB 3,1% IT 4,4% MSCI Wrld Txt, App & Lux goods Others 10,9% US 32,8% CH 10,4% CH 21,7% DE 11,2% FR 25,9% DE 8,3% FR 18,8% 23
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1 LVMH 7.3% 2 Richemont Financière 7% 3 4 Pernod-Ricard Christian Dior 6.3% 5.8% 5 Coach 4.6% 6 Luxottica 4% 7 Swatch Group 4% 8 Adidas Salomon 3.5% 26
Performance (USD) 1 Year 3 Year Since launch (15/10/02) SGAM Invest Secteur Luxe 29.32% 75.49 % 168.47 % MSCI WLD TEXT. APP. & LUX. GOODS (PI) bench 1 24.37% 73.72% 160.79 % MSCI World (ND) bench 2 20.07% 50.80% 102.81 % 27
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SGAM UK 139 people AuM: USD 17 bn UNITED KINGDOM European Equities (Instit.) Emerging Markets Equities UK Equities CONTINENTAL EUROPE SGAM Paris Global Equities SGAM in Paris & European Equities (retail) Continental Europe European Equities (Small & Mid-Cap) Global Fixed Income 1279 people European Fixed Income Money Market products AuM: USD 255 bn Balanced Funds SGAM AI* Structured Products / Index-Linked Management Hedge Funds Private Equity Real Estate BAREP AM Futures Funds Global Macro Funds TCW GROUP 633 people AuM: USD 137 bn UNITED STATES US Equities US Fixed Income Emerging Debt Total AuM: USD 437 bn (SGD 689 bn) 2,673 specialists across the globe**, including more than 600 fund managers and analysts ASIA Asia Pacific inc-japan Equities Asia Pacific ex-japan Equities Chinese Equities Indian Equities Korean Equities Japanese Equities Japanese Bonds SGAM in Asia 622 people Tokyo Singapore Hong Kong Exclusive Strategic Partnerships China (FSFMC) India (SBI FM) Korea (IBKSGAM) AuM: USD 28 bn * Alternative Investments / ** including the Strategic Exclusive Partnerships in Asia 29
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Exposure to tourism --- Geographic expansion ++ Currency hedging -- Line extension + TOTAL Pricing and mix power 0 Brand image ++ ++ Management quality +++ Innovation capacity + LVMH H1 2004 H2 2004 FY 2004 H1 2005 FY 2005E Sales Growth 5609 8.4% 6872 3.4% 12481 5.6% 6173 10.1% 132820 10.7% LFL growth 14.0% 8.5% 11.0% 12.0% 11.0% o.w. Vuitton LFL 16%e 11%e 13%e 13%e 13%e 2003 LFL growth 1.0% 7.0% 4.4% Vuitton 2003 LFL growth 12%e 16%e 14%e Operating results Growth 982 14.0% 1390 8.9% 2372 10.9% 1090 11% 2700 13.8% 2003 LFL growth 4.0% 12.0% 8.7% LVMH 2004 sales 2005 sales Q1 Q2 H1 Q3 9M Q4 H2 FY Q1 Q2 H1 FYE Inventory chge 10.0% 19.5% 14.0% 10.0% 13.0% 7.0% 8.5% 11.0% 11.0% 12.0% 11.6% 11.0% Currency impact -7.3% -2.2% -4.6% -4.4% -5.0% -4.0% -4.5% -4.4% -2.1% -2.0% -2.0% -0.9% Perimeter -1.0% -1.2% -1.0% -0.6% -0.8% -0.8% -0.6% -1.0% 1.0% 0.0% 0.5% 0.6% Revenues chge 1.7% 16.1% 8.4% 5.0% 7.2% 2.2% 3.4% 5.6% 9.9% 10.0% 10.1% 10.7% 33
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