Apr 25, 2017 - Planned public offer by Arnault Family Group on all Christian Dior shares it does not already own1. ⢠S
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA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 25TH, 2017
SUMMARY OF CONTEMPLATED TRANSACTIONS GREATER COMMITMENT OF FAMILY SHAREHOLDER PUBLIC OFFER ON CHRISTIAN DIOR BY ARNAULT FAMILY GROUP¹
STRENGTHENING OF LVMH’S FASHION & LEATHER GOODS DIVISION BY INTEGRATION OF CHRISTIAN DIOR COUTURE
*** ACQUISITION OF CHRISTIAN DIOR COUTURE2 BY LVMH
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
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SUMMARY OF CONTEMPLATED TRANSACTIONS Planned public offer by Arnault Family Group on all Christian Dior shares it does not already own1 ♦ Semyrhamis, a company of Arnault Family Group, intends to file a simplified mixed public offer on Christian Dior shares: – €172 in cash and 0.192 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 average2 and a 25.9% premium over its 3-month average2 Planned acquisition of Christian Dior Couture3 by LVMH ♦ Enterprise value of €6.5bn, i.e. 15.6x EBITDA4 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 18th, 2017 3 Includes Grandville (100%-owned by Christian Dior and its subsidiary, Christian Dior Couture) 4 Adjusted EBITDA – last 12 months as of March 31st, 2017, after accounting for Christian Dior’s expenses ascribed to Christian Dior Couture
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EVOLUTION OF GROUP STRUCTURE CURRENT SIMPLIFIED GROUP STRUCTURE
SIMPLIFIED STRUCTURE FOLLOWING THE CONTEMPLATED TRANSACTIONS
Arnault Family Group
5.8% of share capital 6.3% of voting rights
Arnault Family Group
74.1% of share capital 84.9% of voting rights
Christian Dior
100%
Christian Dior Couture Branch1
41.0% of share capital 56.8% of voting rights
May reach up to 100% of share capital² from 74.1%, depending on results of offer 5.8% of share capital 6.3% of voting rights
Christian Dior 41.0% of share capital 56.8% of voting rights
LVMH 100%
LVMH
Christian Dior Couture Branch1
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
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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
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PUBLIC OFFER BY ARNAULT FAMILY GROUP ON CHRISTIAN DIOR SHARES
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KEY TERMS OF OFFER ♦ Offer initiated by Semyrhamis, a company of Arnault Family Group, targeting 25.7% of share capital – Primary mixed offer: €172 in cash, and 0.192 Hermès International shares per Christian Dior share – Secondary offer in cash: €260 in cash per Christian Dior share – Secondary offer in shares: 0.566 Hermès International shares per Christian Dior share
PUBLIC OFFER ON CHRISTIAN DIOR SHARES
– 14.7% premium1 over Christian Dior’s last share price, an 18.6% premium over its 1-month average share price2 and a 25.9% premium over its 3-month average share price2 ♦ “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
INDICATIVE TIMETABLE
♦ Conclusion of financing under satisfactory terms ♦ Clearance (décision de conformité) by French Financial Markets Authority (AMF)
♦ Filing of offer: late May 2017
Notes: 1 Based on Hermès International closing share price as of April 24th, 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 18th, 2017
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ESTIMATION OF CHRISTIAN DIOR’S NET ASSET VALUE Christian Dior Couture enterprise value
Value of 41% stake in LVMH
Based on LVMH’s 3-month average¹ share price
Others3
€40.4bn
+ Based on LVMH’s 1-month average¹ share price
Net financial debt2
€6.5bn
+
€(1.5)bn
+
€(0.2)bn
€42.7bn
Christian Dior NAV
Christian Dior NAV / share
€45.2bn
€251
€47.5bn
€263
=
Notes: 1 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 2017 2 Net financial debt at Christian Dior level 3 Other assets and liabilities at Christian Dior level
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ILLUSTRATION OF OFFER TERMS In € per share
For each Christian Dior share:
Offer represents premium of:
€2601
€251-2633 + 14.7%
+ 18.6% + 25.9%
€227 €172 in cash
€219
€172
€207
+ 32.8%
€196
and 0.192 Hermès International shares
€881
Offer
Spot share price
1-month 2 3-month 2 6-month 2 avg. avg. avg.
Christian Dior NAV
Notes: 1 Based on Hermès International closing share price as of April 24th, 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 18th, 2017 3 Range according to market value reference used for LVMH (1-month and 3-month average share price)
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AN OPPORTUNITY FOR CHRISTIAN DIOR SHAREHOLDERS
♦ Offer price represents: - a 14.7% premium over the April 24th, 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
♦ Christian Dior shares currently trading at all-time-highs LIQUIDITY ♦ Liquidity opportunity for Christian Dior shareholders
Note: 1 Volume-weighted average share price, adjusted for dividend distribution for share prices up until April 18th, 2017
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STRENGTHENING OF LVMH’S FASHION & LEATHER GOODS DIVISION BY ACQUISITION OF CHRISTIAN DIOR COUTURE
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KEY TERMS OF TRANSACTION
ACQUISITION OF CHRISTIAN DIOR COUTURE1 BY LVMH
♦ Enterprise value of €6.5bn, i.e. 15.6x EBITDA2 ♦ Vendor loan3 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
♦ Information / consultation of Christian Dior employees’ representative bodies PRIOR STEPS BEFORE TRANSACTION
♦ 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 2nd 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 31st, 2017, after accounting for Christian Dior’s expenses ascribable to Christian Dior Couture 3 At an interest rate of 1% per year
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CHRISTIAN DIOR COUTURE KEY FIGURES
Revenue: €2.0bn (Last 12 months at end March 2017)
EBITDA: €418m1 (Last 12 months at end March 2017)
COP2: €270m3 (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 growth4 since 2000
ENTERPRISE VALUE: 15.6x EBITDA5
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 2017
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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
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AN ICONIC BRAND CHRISTIAN DIOR, THE WORLD’S MOST WELL-KNOWN FRENCH NAME
RENOWNED DESIGNERS
Christian Dior
Yves SaintLaurent
Marc Bohan
Gianfranco Ferre
John Galliano
Raf Simons
Maria Grazia Chiuri
Hedi Slimane
Kris Van Assche
Victoire de Castellane
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
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A BRAND EXPERIENCING STRONG GROWTH 2011-2016 REVENUE1 (€bn) +14% per year²
2016 REVENUE BREAKDOWN BY PRODUCT LINE1 Watches & Others Jewelry 3% Shoes 6%
1.9
9% Accessories 10% Fashion 26%
1.0
2011
2016
2011-2016 COP1,3,4 (€m) +24% per year²
2016 REVENUE BREAKDOWN BY REGION1
252 Asia 45%
85
2011
Leather 46%
2016
Europe & Middle East 43%
America 12%
Notes: 1 Actual figures as of December 31st 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
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A STRATEGIC ACQUISITION FOR LVMH
STRENGTHENING OF BRAND PORTFOLIO
HIGH-GROWTH PLAYER
♦ Integration of one of the most iconic brands worldwide ♦ Regrouping of the entire Dior brand within the LVMH group
♦ Exceptional creative momentum ♦ Numerous investments completed over the last years to accelerate development in America, China and Japan
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KEY FINANCIAL IMPACTS FOR LVMH 2016 PRO FORMA EARNINGS PER SHARE
2016 PRO FORMA GEARING¹ (Unaudited)
(Unaudited)
+2.7%
35%
€8.11
€7.89 12%
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
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NEXT STEPS
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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
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