Family businesses report strong first quarter results
The year has started well for family-controlled businesses in Europe, with many reporting strong growth in the first quarter of 2011.
French family-controlled luxury goods company LVMH, headed by Bernard Arnault, said in a statement that its revenues for the first quarter of the year rose by 17% to €5.2 billion, when compared to the same period last year.
Controlled by the family’s holding company, Groupe Arnault, the Paris-based business reported growth across all its divisions, and said that “the United States, Europe and Asia enjoyed a strong momentum.”
Positive results don’t come as a surprise, as LVMH showed its upbeat cash position with the acquisition of a 51% stake in family-controlled jewellery house Bulgari in March (Continue reading here).
The purchase came in the wake of a battle between LVMH and another family-controlled luxury goods company Hermes. In November 2010, LVMH had built a 20% stake in Hermes, which led to the founding family creating a holding company to prevent a possible takeover (Continue reading here).
Fellow family-controlled Dutch brewer Heineken also reported strong results helped by not only acquisitions but also cost and job cuts. In line with its reputation as the third-largest brewer in the world in terms of volume, the company announced a 44% growth in its beer volume for the first quarter of 2011 – which it attributed to the consolidation of its beer operations.
Revenues for the quarter rose 22% to €3.5 billion, the company said. But its sales in Western Europe grew by less than 1%, which wasn’t taken kindly by the market. The group’s share value dropped to €37.78 on 20 April – a 1.1% drop.
The group said in a statement that strong performance in the emerging markets of Africa and Asia helped boost its growth. Its January acquisition of five breweries in Nigeria has paid off as volumes in its African market rose by 12%. But the growth didn’t come easy for the group, which cut a large number of jobs in Western Europe over the last year in an attempt to cut costs.
Another French group, cosmetics giant L’Oreal, also witnessed a rise in sales in its first 2011 quarter. Controlled by second-generation Liliane Battencourt, the world’s largest beauty company reported a 9.3% quarterly increase in sales to €5.16 billion. Its primary growth came from a boost in sales in North and Latin America.
This strong start is good news for the company, which saw its three-year acrimonious clash between Battencourt and her only daughter Francois Battencourt-Meyers come to an end in December 2010 bringing some stability to the company (Continue reading here).
