Harvard Global Case Competition

Joe Braun | Garret Markey | Morgan Rice | Noah Slade | JacobWhite
Miami University: Farmer’s Five Forces
HARVARD
GLO B AL CAS E COMPETITIONAT
2018 CASE
M&A–LVMH

2Global Case Competition at Harvard – LVMH M&A
Industry Overview
FinalThoughts
Company Overviews
Hermes Due Diligence
Alternative Investments
Appendix
Setting the Scene 3
5
10
14
23
38
41
Table of Contents

Brief History of Case
LVMH Grows Stake Hermes Pushes Back
• Moët Hennessy LouisVuitton began buying shares in 2008 and
has grown its position to 23.1% by July 2014
• Total cost of minority stake was €1.45 Billion
• Position was built through the use of equity swaps, allowing
LVMH to continuously grow their influence without declaring
their share purchases
• LVMH is currently being investigated by French authorities for
violation of disclosure laws
• Hermes Chairman Bernard Puech called for the 23% stake to be
halved
• A limited partnership holding company has been set up,
controlling roughly 50% of Hermes, to make it impossible for
any outside influence to gain control against their wishes
• The bylaws allow Hermes to issue new shares to existing
shareholders in case of a hostile bid, and also give
shareholders who have owned shares for more than four
years a double vote
LVMH Responds What’s Next?
• Bernard Arnault, CEO of LVMH, has repeatedly stated that he
wishes only to be a long term shareholder and his actions are not
malicious
• He stated that he hoped the acquisition of Bulgari, an
Italian watchmaker, would show strength of potential
partnership
• Believes he can greatly boost Hermes’s profitability under
his roof
• Size of stake has executives at Hermes concerned, despite talks of
peaceful intentions
• Hermes CEO PatrickThomas said that the push against control
is a cultural fight, not a financial one
• Luca Solco, Bernstein Research – “Hermes is afraid
LVMH would trivialize the brand and introduce cheaper
products”
• Arnault is said to admire Hermes and wants to acquire them so
that a competitor doesn't
• Has a history of takeovers with companies in turmoil,
like Chateau d’Yquem (dessert wines) and Boussac
(furnishings)
Sources: Bloomberg, Harvard Case Packet

Luxury Goods Industry Highlights
Business Segments
Industry Overview
• Highly concentrated industry with 48.1% of the market
controlled by the top 10 companies
• Historically outperforms the market as a whole, but saw single
digit growth for the first time in 3 years in 2013 at 2.4% down
from 10.4% in 2012
• GenerationY individuals and Millennials increasing luxury
goods purchases
• Reporting revenues largely dependent on currency fluctuations
and discretionary income
Luxury Goods Companies by Sales
Rank Company
Country of
Origin Sales (US$m) Profit Margin ROA
Sales
CAGR
1 LMVH France $23,297 19.90% 11.40% 3.50%
2 CF Richemont SA Switzerland 13,217 12.80% 6.50% 4.00%
3 Estee Lauder Inc. United States 10,780 10.10% 13.30% 2.90%
4
Luxottica Group
SpA Italy 10,172 8.40% 6.70% 3.90%
5 The Swatch Group Switzerland 9,223 16.30% 11.10% 5.90%
6 Kering SA France 8,984 5.50% 2.30% 4.30%
7 Chow Tai Fook Hong Kong 8,285 8.60% 9.10% 5.70%
8 L'Oreal Luxe France 8,239 15.00% 19.10% 5.50%
9 Ralph Lauren United States 7,620 9.20% 11.50% 4.70%
10 PVH Corp. United States 6,441 5.30% 4.00% 21.40%
CAGR 5.7%
Fashion & Leather
Goods
Wine & Spirits Perfumes & Cosmetics Selective Retail
CAGR 0.8% CAGR 11.3% CAGR 5.0%
Watches & Jewelry
*New Segment
Sources: Bain, Bloomberg, Deloitte, EY

6.50%
7.00%
7.50%
8.00%
8.50%
9.00%
9.50%
10.00%
10.50%
11.00%
11.50%
12.00%
0.00% 2.00% 4.00% 6.00%
WACC
LTGR
Tumi
Chow Tai Fook
Salvatore Ferragamo
Kering
LVMH
Hermes
Moncler Luxottica
Luxury Goods IndustryTrends and Drivers
NotableTrends and Influences
• Ubiquity v. Exclusivity – Luxury brand reluctance to sell
products online conflict with need to deliver efficient shopping
experience
• Omnichannel – Internet is radically altering customer purchase
path
• Tourism’s Boost on Sales – Industry depends on tourism for
nearly half of sales
• Custom Product Initiatives – Customization allows companies
opportunity to retain exclusivity while still broadening client
base
M&A Drivers WACC & LTGR by Luxury Company
• Globalization – Growing population of wealthy and upper
middle class in emerging markets pushes companies to increase
international presence
• Value Chain Integration – Successful value chains are desirable
targets to help ensure brand-appropriate quality control
• Consolidation as a Growth Strategy – Mature brands like LVMH
too to use expertise and large scale to build smaller brands,
leveraging production facilities and operating systems to achieve
greater market share and cost efficiencies
Luxury Companies
Market Capitalization
(in Euro) WACC Beta LTGR
LVMH €65,304 9.00% 1.01 2.30%
Richemont 39,688 9.00% 1.21 3.10%
Hermes 24,528 8.30% 0.72 3.60%
Luxottica 18,865 7.60% 0.5 3.10%
Kering 18,000 9.60% 0.96 2.60%
Prada 13,657 8.70% 0.83 2.70%
Chow Tai Fook 12,268 10.50% 1.17 3.60%
Salvatore Ferragamo 3,657 9.50% 0.66 3.10%
Moncler 3,217 8.30% 1.01 3.20%
Tumi 1,139 10.40% 1.64 5.4%*
Average 9.15% 0.96 3.05%
Median 9.20% 1.01 3.10%
Richemont
Prada
Sources: Bloomberg, Deloitte, EY

Luxury Goods Industry Macroeconomic Trends
Travel Retail Sales Growth
• MarketValue $63.5B in 2014 and estimated to
grow to $85B by 2020 with a CAGR of 8.4%
• Asia-Pacific region represents largest share of the
travel retail market at 38.6%, followed by Europe
at 32.2%
• 58% of purchases are made in airports, 5 of 7
airports boasting sales greater than $1B are
located within APAC
Asia-Pacific Market Potential Compound Annual Growth by Region
• Market potential in emerging markets in Asia and the Middle
East due to tourism and growing middle class in China
• Japan among top most appealing markets due to increased local
and touristic consumption of luxury goods
• Increase in travel to and from APAC due to democratization of
travel and budget airline booms
Shanghai (PVG)
Hong Kong (HKG)
London (LHR)
Dubai (DXB)
Singapore (SIN)
Bangkok (BKK)
1
2
Seoul (ICN)
4
5
6
3
7
London (LHR)
Dubai (DXB)
Singapore (SIN)
Bangkok (BKK)
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
Middle East & Africa
Asia
Latin America
North America
Eastern Europe
Australia
Western Europe
CAGR
Sources: Coresight Research, Deloitte, Generation Research

Luxury Goods Historical Industry EV/EBITDA
- -
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014
Commentary
Average: 10.2x
• Industry average EV/EBITDA multiples are composed of the luxury goods peer set, included in the peer set are Hermes, LVMH, Moncler,
Christian Dior, Burberry, Prada, Richemont, Luxottica, Kering, Salvatore Ferragamo andTumi
• The luxury goods industry multiples have seen multiple expansion since the 2008 financial crisis
• Industry average EV/EBITDA multiples have continued to rise at a steady state since 2012
Sources: Bloomberg

LVMH Company Analysis
5Year Price Movements Strategic Focus
• Major player in all five industry segments:
• Wine & Spirits (Dom Pérignon)
• Fashion & Leather Goods (Givenchy)
• Perfumes & Cosmetics (Dior)
• Watches & Jewellery (Hublot)
• Selective Retailing (Sephora)
• LVMH drives growth in new and emerging markets primarily
through acquisitions
• Main core of consumers reside in the high income segment
(higher level of purchasing power)
History Synergistic Impact
• Founded in 1987 through a merger between Moët Hennessy and
LouisVuitton
• Combined legacy of both brands stretches as far back as
1593
• Mission is to drive innovation in the luxury goods space through
elegance and creativity
• Managed since 1989 by Bernard Arnault
• Stock value has increased over 1000% since the genesis
of his work with LVMH
• Diversified portfolio of luxury goods allows for significant
technology transfer between companies
• Implementation of historically effective operational strategies
• Major marketing power and widespread branding influence
through three main avenues:
• Press and television advertisement
• Catwalk
• Presence in events
Sources: Bloomberg, LVMH 10-K
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Link to financial statements

LVMHValuation
Implied EnterpriseValue of $94,213 M
Sources: Bloomberg, LVMH 10-K, Team Projections
$70,000.00 $95,000.00 $120,000.00
DCF EBITDA Exit Multiple
DCF Perpetuity Growth
2014 EV/EBITDA Comparables
2014 EV/Revenue Comparables
2013 EV/EBITDA Prescedents
Link to valuation methodologies

S W
O T
LVMH SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
• Expansion of holdings to cover new
regions and markets
• Consistent sourcing of creative and
visionary talent
• Cross branding between holdings
• Increased presence in online retailing
• Specific geographic trends
• Too much focus on powerhouse brands
• Global currency fluctuation
• Brand deterioration
• Over focus on a specific consumer
markets
• Prestigious brand known worldwide
• Diverse brand portfolio stretching across
multiple industries
• Ability to share operational resources
across brands and companies
• Celebrity marketing and approval
• Low cost imitations
• Intense competition among other
luxury brands
• Global economic and political climates
• Acquisitions among major competitors
Sources: Bloomberg, LVMH 10-K, Team ProjectionsLink to acquisition success

Hermes Company Analysis
5Year Price Movements Strategic Focus
• Hermes has been a dominant player in the luxury goods space,
choosing time and time again to emphasize quality of product
over mass production
• Stuck to core businesses while repulsing attempts to stuff
additional brands under the same label
• Willing to sacrifice potential growth for the sustained
legacy of their offerings
• Core pillars for FY14 are continued operational expertise,
expansions in distribution towards new markets, and realistic
increases in production capacity
History Serious Resistance
• Hermes began in 1837 as a harness maker, evolved into saddles,
and then in 1920 introduced accessories and wider range of
leather goods
• 85% of products sold in stores are made by the 3,500
craftworkers under employ
• Products are sold in 313 exclusive stores and 21
worldwide outlets
• Beginning a pronounced shift into home furnishings - new Paris
store built as a destination to experience luxury, not just shop
• Hermes family shareholders (Puechs, Guerrands, and Dumases)
hold about 73.4% of shares
• Hermes shareholders at large have indicated interest in
selling their positions, given significant interest and
suitable compensation
• Many indexes have dropped their Hermes shares due to a lack of
liquidity – could spur selloffs in remaining shares
• Fear of destabilization from LVMH stake may tip the
scales for many investors
Sources: Bloomberg, RMS 10-K
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Hermes Strategy
Impactful Synergies LVMH ROI
• Pricing power would be highly beneficial to this merger - as two
of the largest players in the luxury goods market, they will be able
to create more brand awareness
• Expansion in the emerging markets is very important to the
future of luxury goods
• With a combined company, research and analysis will be
much simpler and less expensive
• The combined entity will have more bargaining power and more
experience with streamlining costs and improving production and
distribution
• This is an opportune time for LVMH to sell their stake in
Hermes and earn a significant return that they can put to use in
acquiring a smaller company that will offer them ideal synergies
Overvalued Bad Blood
• Hermes is overvalued compared to their peers as of 06/30/2014
• 2014E P/E: RMS 33.7x vs. Peers 22.9x
• 2014E EV/EBITDA: RMS 19.6x vs. Peers 13.3x
• This merger would not make sense at this point in time because
Hermes is overvalued
• We recommend LVMH selling their shares and looking
into different acquisitions that are fairly priced and will
add value for LVMH shareholders in the years to come
• From the beginning there has been noticeable hostility between
the two parties over LVMH’s acquisition methods
• This will only continue to get worse as Hermes continues to
launch lawsuits against LVMH
• Emotions from both sides could cause skewed judgement in the
takeover process and lead to serious gridlock
• Mr. Arnault has continue to acquire smaller brands and build
them into well known brands under the LVMH umbrella while
maintaining stellar profit margins
Sources: Bloomberg, RMS 10-K
2010 2014 ROI
$2,019 $6,238 209.0%
2014 2018 IRR
$27,383 $38,054 9%
Hostile Takeover
Sell Stake
Equity Value
Equity Value
Link to investor returns

Hermes Valuation
Implied EquityValue of $27,383 M
$15,000 $20,000 $25,000 $30,000 $35,000
2014 Revenue Comparables
2014 EBITDA Comparables
2014 Net Earnings
2013 EBITDA Precedents
EBITDA Exit Multiple Method
Sources: Bloomberg, RMS 10-K, Team Projections

Hermes Discounted Cash Flow Analysis
Unlevered Free Cash Flow Calculation WACC Calculation
DCF Implied EquityValue DCF Sensitivity Analysis
$32,316$29,536$27,280
$31,258$30,490$29,722
Perpetuity
Growth
Implied
EquityValue
EBITDA Exit
Multiple
Implied
EquityValue
Bear Base Bull
Capital Structure
Debt 0.09%
Equity 99.91%
Beta 0.70
Equity Risk Premium 6.27%
Risk Free Rate 2.89%
Cost of Equity 7.28%
Pre-Tax Cost of Debt 1.23%
Corporate Tax Rate 33.27%
Cost of Debt 0.82%
WACC 7.27%
WACC Calculation
*Dollars in Millions
Discounted Cash Flow Analysis
2014E 2015E 2016E 2017E 2018E
Revenue $5,547 $6,154 $6,776 $7,352 $7,889
Less: Operating Expenses 3,772 4,185 4,607 5,000 5,364
Operating Income $1,775 $1,969 $2,168 $2,353 $2,524
Tax Effect 591 655 721 783 840
NOPAT $1,185 $1,314 $1,447 $1,570 $1,685
Plus: D&A 144 160 176 191 205
Change in Working Capital 53 (42) (43) (40) (37)
Less: CapEx (233) (258) (285) (309) (331)
Unlevered Free Cash Flow $1,149 $1,174 $1,296 $1,413 $1,521
30,490.0 12.0x 12.2x 12.4x 12.6x 12.8x
6.3% $30,977 $31,380 $31,782 $32,184 $32,586
6.8% $30,341 $30,734 $31,127 $31,520 $31,913
7.3% $29,722 $30,106 $30,490 $30,874 $31,258
7.8% $29,120 $29,495 $29,870 $30,245 $30,620
8.3% $28,534 $28,900 $29,267 $29,633 $30,000
Exit Multiple
WACC
29,535.5 2.0% 2.3% 2.5% 2.8% 3.0%
6.3% $33,434 $35,145 $37,081 $39,289 $41,832
6.8% $30,036 $31,375 $32,869 $34,547 $36,447
7.3% $27,280 $28,352 $29,536 $30,849 $32,316
7.8% $25,000 $25,875 $26,832 $27,884 $29,046
8.3% $23,083 $23,808 $24,596 $25,455 $26,395
Perpetuity Growth
WACC

Hermes PrecedentTransactions
EBITDA Margin TV/LTM EBITDA
Valuation Commentary Implied EquityValue
• Based off recent M&A activity we derived an implied equity value
for Hermes between $27,369 - $30,175 M
• The averageTV/EBITDA multiple was used to generate the bull
case for the equity value of Hermes
• Equity value was calculated by finding enterprise value and then
subtracting net debt
• The average transaction value is $1,612 million
• The average LTM EDITDA is $99 million
• The average LTM revenue is $567 million
- - 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x
Loro Piana SpA
Handsome Co.
Volcom
HUGO BOSS
Heilan Home Garmet
Camaieu International
RMS 2013 EBITDA $1,753
EV/ EBITDA Multiple 14.1x ---------------- 16.1x
Enterprise Value $24,723 ---------------- $28,230
Implied Equity Value $26,142 ---------------- $27,895
- - 5.0% 10.0% 15.0% 20.0% 25.0%
Heilan Home Garmet
Loro Piana SpA
Handsome Co.
HUGO BOSS
Volcom
Average: 16.1xAverage: 18.1%

Hermes Comparable Companies Analysis
2014E EnterpriseValue/Revenue 2014 E EnterpriseValue/EBITDA
2014 E Price/Earnings Valuation Commentary
• Hermes is overvalued compared to their peers based on relative
industry multiples
• LVMH would be poorly advised to purchase Hermes at this
point in time due to their overvaluation compared to their peers
• The majority of Hermes equity is owned by family members and
is currently in a holding company
• This would cause the acquisition of Hermes to be quite
pricey as LVMH would have to pay a premium for each
share
Average: 3.5x Average: 13.3x
Average: 22.9x
- - 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x
Hermes
Michael Kors
Prada
Tiffany & Co.
Hugo Boss
Salvatore Ferragamo
Burberry
Kerig
- - 5.0x 10.0x 15.0x 20.0x 25.0x
Hermes
Michael Kors
Tiffany & Co.
Salvatore Ferragamo
Hugo Boss
Kerig
Prada
Burberry
- - 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x
Hermes
Michael Kors
Tiffany & Co.
Salvatore Ferragamo
Burberry
Prada
Hugo Boss
Kerig

S W
O T
Hermes SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
• Strong brand name and global presence
• Markets their products across the world in
315 exclusive stores, 200+ of which are
directly operated
• Large portfolio of products allows for quick
pivots alongside emerging trends
• Long term relationships with suppliers
allow for expedited distribution processes
• Limited ecommerce presence with high
up-front costs
• Replenishment of quality raw materials
can be costly
• High exposure to Asian currency
fluctuations
• Utilize LVMH’s extensive resources to build
a burgeoning ecommerce platform to
compete with direct competitors
• Expand brand presence in emerging
countries
• Growing distribution network into new
locations and markets
• Intense competition in the luxury goods
industry
• Widespread online sales due to
ecommerce that could harm retailer stores
• Sensitive to large-scale economic shifts
outside of company control

LVMH would have to pay a
hefty premium to acquire
shares from the family
Management ego would cause
discrepancies in acquisition
talks
LVMH would be overpaying
for Hermes at their current
valuation
Hermes KeyTakeaways
Why
Hermes
is not the
Answer

Moncler as a Potential Target
1. Moncler offers long term value to the LVMH brand with strong revenue growths
❖ Moncler has enjoyed solid revenue growth (CAGR 2007-12) of 35%
❖ Double-digit growth performance was recorded in all international markets for
2013 providing strong evidence for international sales in the future
❖ 31.3% of Sales from Asia and other emerging markets
2. Moncler shows promise for new market and product line expansion
❖ During 2013 there were 24 directly operated stores opened in diverse market places such as
Paris, Milan, Shanghai and Hong Kong, allowing for increased global market share
❖ Expansion into new product markets such as knitwear and handbags provides confidence for
brand growth in the specialty apparel industry
3. Commitment to sustainability in line with LVMH goals and values
❖ Moncler directly purchases the sustainable high quality raw materials used in its garments, and
uses independent third parties to audit sustainability measures pursuant to a corporate
Sustainability Plan
4. Synergistic Benefits: Cost Reduction and Brand Outreach
❖ Combined fur, leather, and down supply chains for overall reduced costs
❖ Moncler US-based marketing initiatives would increase brand awareness for LVMH in the
United States
5. Brand alliance and LVMH mentorship
❖ Moncler is looking to increase retail sales to become more in line with top luxury goods
companies, something LVMH could help achieve
Sources: Bloomberg, MONC 10-K, Team Projections

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Retail Wholesale
About Moncler
Company Overview Sales Breakdown by Distribution
Brand: Moncler’s brand merges high fashion and high
performance using top quality sustainable materials
Business Segment Focus: Apparel & Accessories
Products: High-end down outerwear, shoes, bags and
suitcases, hats, scarves, gloves, eyewear, and other specialty
goods
Highlights: Excellent Operating Margin (28.7%) and
EBITDA Margin (32.0%), High CAGR 2007-12 of 35%
Est. 1952 in France.
Began by producing
quilted sleeping bags, a
single model of a lined
hooded cape and tents
In 1954 Moncler developed
the first down jackets
protecting wearers, including
those on the Italian expedition
to K2, from the harshest of
climates
By 1968 Moncler was chosen as
the official supplier for the
French down hill ski team in the
Winter Olympics allowing the
company to gain a worldwide
following
The 1980’s brought
heightened change in the
duvet jacket industry
including fur trim, satin
and reversible fabrics.
In 2003 Moncler
was acquired by
Italian entrepreneur
and fashion visionary
Remo Ruffini
By 2009 Ruffini transforms
Moncler into a staple of French
fashion staple with the launch of
the Gamme Rouge and Gamme
Blue collections
In 2010 Moncler
revitalized its down
jacket beginnings with
an urban
contemporary take
On December 16th
2013 Moncler went
public on the Borsa
Italiana at $13. 85 per
share
Sources: Bloomberg, MONC 10-K, Team ProjectionsLink to financial statements

Moncler Valuation
$2,000 $2,500 $3,000 $3,500
2013 EBITDA Prescedents
Sources: Bloomberg, MONC 10-K, Team ProjectionsLink to valuation methodologies

- - 5.0x 10.0x 15.0x 20.0x
Volcom
HUGO BOSS
Jones Group Inc
J Crew Group
True Religion Apparel
The Gymboree
Pacific Brands
Fiberweb
Moncler Market Based Multiples Analyses
TransactionValue/TTM EBITDA 2014 E EnterpriseValue/EBITDA
- - 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x
LLP
Ted Baker
Hugo Boss
CCC
Sports Direct International
Moncler
Next Plc
Superdry
JD Sports Fashion
2014 E EBITDA Margin KeyTakeaways
• Moncler is fairly valued in terms of Enterprise Value/EBITDA
and is twice as efficient compared to their peers in terms of
deriving earnings
• Moncler is comparable to Hermes is terms of their high
EBITDA margins and would be an excellent addition to LVMH’s
portfolio
• From a transaction value perspective Moncler could be acquired
for 11.8x to 13.8xTTM EBITDA
- - 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Moncler
Hugo Boss
Next Plc
Superdry
LLP
Ted Baker
CCC
Sports Direct International
JD Sports Fashion
Average: 17.0%

S W
O T
Moncler SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
• Iconic down jackets with strong
heritage
• High margins, solid returns and robust
FCF generation
• Experienced management team led by
Remo Ruffini
• Increasing control on product offerings
and distribution
• High degree of seasonality
• High exposure to mature markets in
Italy and Japan
• Outsourced production to third party
limits control on manufacturing
• Inherent forecasting risk
• Further expansion of directly operated
retail stores
• Tapping into neighboring product
categories such as knitwear, scarves,
gloves and casual shoe wear
• Strengthening of global reach
• Low barriers to entry in the apparel &
outerwear product category
• Competition for access to good
storefront real estate
• New entrants at competitive pricing
and quality offer

Moncler KeyTakeaways
Why
invest in
Moncler
Strong revenue growth in
international markets provides
LVMH with an opportunity to
capitalize on emerging markets
LVMH’s years of experience in the
luxury goods market will provide
Moncler with attentive navigation
necessary to complete product line
expansion
Integrated fur, leather, and down
supply chains resulting in cost
reduction and higher quality controls

Tumi as a Potential Target
1. Dominant travel retail presence with planned expansion into airports
❖ Tumi has over 1,000 international distribution points and plans to expand retail locations into
50 airports worldwide allowing it to increase sales growth among global travelers
2. Omnichannel distribution and product customization reinforce customer satisfaction
❖ Tumi’s omnichannel distribution combines e-commerce and brick and mortar retail to allow
customers the ability to personalize their shopping experience as well as their products
❖ ATumi acquisition could provide LVMH with an opportunity to utilize ecommerce and
online shopping platforms while maintaining brand exclusivity with customization possibilities
3. Tumi consistently shows strong revenue growths, CAGR, and economic resilience
❖ From 2005 to 2013 Tumi has achieved a healthy CAGR of 14% in net sales and 17% in
operating income
❖ Growth rates remained consistent despite negative headwinds from an economic downturn
4. Product quality and customer satisfaction drivesTumi above its competitors
❖ Extensive product testing and innovation allows Tumi to stay at the forefront of the luxury
travel space
❖ Tumi ranks #1 among its peers for customer advocacy – nearly every customer said they would
recommend the brand
5. LVMH mentorship allowsTumi to proceed with confidence
❖ With nearly 30 years of experience in the luxury goods market LVMH has the knowledge to
and resources to support product line expansion forTumi
❖ LVMH’s mentorship would allow Tumi to focus on quarterly earnings instead of a full year
focus as it currently does
Sources: Bloomberg, TUMI 10-K, Team Projections, Reuters

Sources: Bloomberg, Generation Research, Tumi 10-K
AboutTumi
Company Overview Omnichannel Innovation
Brand:Tumi offers global lifestyle products comprising both travel
and business accessories
Business Segment Focus: Luggage & Accessories
Products: Luggage, backpacks, briefcases, handbags, wallets, and travel
accessories
Highlights: Strong compound annual growth of 14% in Net Sales
and 17% in Operating Income, Ranked #1 among peers for
customer advocacy, Pioneer in ecommerce sales
5 Core Principles: excellence in design, functional superiority,
technical innovation, unparalleled quality and world-class customer
service
Travel Retail HistoricalTravel Retail Sales
• Over 1,000 international distribution locations
• Looking to expand square footage domestically and
internationally – slated to grow to 200 stores in the US and 100
in Europe over the next several years
• Plans to open stores in at least 50 airports in the U.S. alone in
the coming years
Online In-Store
Customer
Service
• Tumi utilizes multiple
resources to allow each
customer to develop
their own unique
purchase experience
• An omnichannel
increases brand
accessibility without
diminishing brand
image
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$50,000
$60,000
$70,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
($inMillions)

Tumi Acquisition Highlights
Synergistic Benefits & Opportunities Strategic Focus
• Tumi has established brand-loyal individuals and repeat
purchasers. LVMH could take advantage of already established
brand loyalty and further increase brand awareness.
• Management has focused almost exclusively on hitting yearly
earnings – leaving quarterly breakdowns particularly lumpy and
unattractive to investors.With LVMH guidanceTumi could
produce more consistent results driving up their share price
• LVMH could utilizeTumi’s dominance in ecommerce and
omnichannel distribution to stay at the front of innovation in the
luxury goods industry
• Diversification of brand offerings is key – 77% of current retail
products are not luggage
• Mid single digit growth numbers in adjacent products
leaves significant room for explosive expansion in the next
4-6 quarters
• Gaining relevance in differentiated product offerings – women’s,
accessories, outerwear
• Extensive product testing and innovation allowsTumi to stay at
the forefront of the luxury travel space
• Share price is down 23.8% over the past 12 months, making
available shares particularly liquid
• Lower Price/Earnings multiple does not account for impressive
long term growth expectations
• Scheduled product launches remaining during FY14 -
Tegra Max, Sinclair totes, and Alpha 2 relaunch - are
projected to drive consumer interest
• AUR from these new releases expected to propel Average
Unit Retail levels up 4-5%
Future Potential Currently Undervalued
• Needs to continue to improve brand awareness – currently at
55% vs. 80% for leading comparable companies
• Penetration into new markets could be considerably eased
by the immense resources and marketing platforms held
by LVMH
• Currently facing serious margin dilution from ecommerce sales
that can be mitigated by bringing those operations in-house
• Eliminates 20% operator fee currently being paid to GSI
Commerce
• LVMH could help fosterTumi’s desired product line expansions
into women’s, accessories, outerwear
Sources: Bloomberg, TUMI 10-K, Team Projections

Tumi Valuation
$750 $1,000 $1,250 $1,500 $1,750 $2,000
2014 Net Earnings Comparables
2013 Revenue Precedents
Sources: Bloomberg, TUMI 10-K, Team ProjectionsLink to valuation methodologies

Tumi Market Based Multiples Analyses
2014 E EnterpriseValue/Revenue 2014 E EnterpriseValue/EBITDA
TransactionValue/TTM EBITDA KeyTakeaways
- - 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x
Hermes International
Micahel Kors
Hugo Boss
Salvatore Ferragamo
Tumi
Kerig
Samsonite International
- - 5.0x 10.0x 15.0x 20.0x 25.0x
Hermes International
Micahel Kors
Salvatore Ferragamo
Tumi
Hugo Boss
Kerig
Samsonite International
• Tumi is undervalued relative to peers in terms of Enterprise
Value/EBITDA and Enterprise Value/Revenue
• LVMH can acquireTumi for a discount and assist them in
growing to peer group averages
• From a transaction value perspectiveTumi could be acquired for
14.1x to 16.1x TTM EBITDA
- - 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x
Loro Piana SpA
Handsome Co.
Volcom
HUGO BOSS
Heilan Home Garmet
Average: 16.1x

S W
O T
Tumi SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
• Premium quality construction and
materials drive lasting customer brand
loyalty
• Product innovation keeps luxury goods
products firmly grounded in future trends
• Diverse distribution network enables rapid
global expansion
• Currently paying high operational fees to
GSI Commerce for ecommerce infrastructure
• Smaller scale and meager resources putsTumi
on an uneven playing field with its larger
competitors
• Business is sensitive to consumer spending
patterns and cyclical macroeconomic
conditions
• Growing the number of physical locations
Tumi owns and operates allows for deeper
market penetration
• Burgeoning ecommerce operations could
be significant bolstered by developing an
in-house solution
• New product releases, in conjunction with
continual improvement of existing brands,
offers dynamic top line growth
• Stifling competitive landscape, especially
within new markets
• Continued growth relies will rely heavily on
strength of ecommerce to avoid recent
volatility with brick-and-mortar sales
• Customer retention greatly relies on the
strength of the brand – deterioration of
quality or service would severely damage
bottom line potential

Long term growth
opportunities currently
trading at a discount
Travel Retail foothold allows
LVMH to take advantage of
fastest growing luxury goods
market
Omnichannel distribution
provides opportunity for
innovation while preserving
brand exclusivity
Tumi KeyTakeaways
Why
Tumi is a
valuable
target

FinalThoughts
Make Peace with Hermes Alternate Acquisitions
• Hermes is overvalued compared to their peers as of 06/30/2014
• 2014E P/E: RMS 33.7x vs. Peers 22.9x
• 2014E EV/EBITDA: RMS 19.6x vs. Peers 13.3x
• From the beginning there has been bad blood in the way that
LVMH acquired stake in Hermes
• This can only continue to get worse as Hermes continues to
launch lawsuits against LVMH
• Emotions from both sides could cause skewed judgement in the
takeover process
• LVMH is at a crossroads: they have two stellar acquisition targets
with stark differences in forthcoming strategy
• Reasons for acquiring Moncler:
• New customer segments and product line expansion
• Expanded brand alliance and brand outreach
• Reasons for acquiringTumi:
• Allows LVMH to build out emerging selective retailing
segment
• Significant discount compared to more mature peers
despite unprecedented growth rates and customer loyalty
$2,000 $2,500 $3,000 $3,500
2013 EBITDA Prescedents
Sources: Bloomberg, Team Projections
MonclerValuation: $2.99 Billion
$750 $1,000 $1,250 $1,500 $1,750 $2,000
2014 Net Earnings Comparables
2013 Revenue Precedents
TumiValuation: $1.37 Billion

LVMH would have to pay a hefty premium to
acquire shares from the family
Management ego would cause disruption in
acquisition talks
LVMH would be overpaying for Hermes at
their current valuation
Why Hermes is
not the Answer
Diverging Paths with Lucrative Endings
Moncler’s
global
strength Long
term
expansion
goals
Proven
marketing
power
Need for
more diverse
offerings
Tumi’s
strategic
storefronts
Interior
design
experience
Burgeoning
selective
retailing
segment
Need for
transitional
products

12%
19% 20%
75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Glenmorangie Bulgari Tag Heuer Loro Piana
EnterpriseValueCAGR
Successful Growth in Acquisitions
Commentary
Average: 31%
• LVMH has been successful in growing the enterprise value of companies they have acquired in the past
• One can believe that LVMH will have similar success with companies acquired in the future such as Moncler and/orTumi
Sources: Bloomberg

LVMH Comparable Companies Analysis
Valuation Commentary Implied EnterpriseValue
• Lower quartile EV/EBITDA multiple was used to generate the
bull case
• Lower quartile EV/Revenue multiple was used to generate the
bull case
• LVMH is undervalued relative to peer group averages
• This undervaluation can be a result of a large enterprise
value and stable future growth
LVMH 2014E Revenue $41,240
EV/Revenue Multiple 2.1x ---------------- 2.3x
Enterprise Value $88,467 ----------------$96,115
LVMH 2014E EBITDA $10,558
EV/EBITDA Multiple 8.8x ---------------- 9.8x
Market Enterprise
Cap. Value 2014E 2015E 2014E 2015E 2014E 2015E 2014E 2015E
Christian Dior $31,486 $42,416 24.9% 24.0% 4.1x 4.2x 1.0x 1.0x 15.1x 10.0x
Kering 27,591 33,174 19.8% 17.8% 12.5x 14.5x 2.5x 2.6x 18.0x 25.7x
Hermes International 39,025 37,331 35.7% 36.0% 19.1x 19.3x 6.8x 6.9x 33.2x 35.3x
Prada 18,125 17,722 31.9% 26.9% 11.6x 14.2x 3.7x 3.8x 21.5x 30.8x
Salvatore Ferragamo 5,041 5,096 22.1% 22.8% 13.0x 14.1x 2.9x 3.2x 24.1x 26.3x
Compagnie Financiere Richemont 58,098 51,676 28.6% 28.4% 13.4x 13.8x 3.8x 3.9x 21.1x 40.6x
Hugo Boss 10,210 10,235 24.1% 21.8% 12.4x 15.1x 3.0x 3.3x 20.9x 27.5x
Burberry 11,465 10,794 25.5% 23.2% 11.4x 11.4x 2.9x 2.7x 22.0x 21.3x
Tapestry 9,664 8,935 37.2% 23.4% 5.0x 9.1x 1.9x 2.1x 11.1x 17.9x
Luxottica Group 26,783 28,009 20.3% 21.5% 13.5x 13.0x 2.7x 2.8x 30.1x 28.6x
Average $23,749 $24,539 27.0% 24.6% 11.6x 12.9x 3.1x 3.2x 21.7x 26.4x
Median 22,454 22,865 25.2% 23.3% 12.5x 13.9x 2.9x 3.0x 21.3x 26.9x
LVMH $87,430 $88,467 25.6% 25.6% 8.4x 7.8x 2.1x 2.0x 17.7x 16.5x
Company Name
EBITDA Margin Price/EarningsEnterprise Value/EBITDA Enterprise Value/Revenue

LVMH PrecedentTransactions Analysis
• The averageTV/EBITDA multiple was used to generate the bull
case for the enterprise value of LVMH
• LVMH is difficult to value by looking at recent M&A activity
because many of the companies acquired are significantly smaller
in terms of enterprise value to LVMH
Transaction EBITDA
Value Margin EBITDA Revenue EBITDA Revenue
Jones Group Inc Sycamore Partners 19-Dec-13 $2,199 6.5% $245 $3,765 9.0x 0.6x
Pacific Brands Hanesbrands 13-Jan-12 365 13.5% 58 430 6.3x 0.8x
Camaieu International Cinven Ltd 29-Mar-11 546 21.5% 69 323 7.9x 1.7x
True Religion Apparel TowerBrook Capital Partners 10-May-13 635 16.1% 78 481 8.2x 1.3x
Volcom Kering 24-Jun-11 512 9.9% 33 332 15.6x 1.5x
Maidenform Brands Hanesbrands 1-Oct-13 572 7.4% 42 561 13.7x 1.0x
Handsome Co. Hyundai Home Shopping Network 16-Feb-12 365 19.1% 22 117 16.4x 3.1x
Fiberweb AVINTIV Specialty Materials 18-Nov-13 278 9.5% 45 470 6.2x 0.6x
HUGO BOSS Permira Holdings 7-Sep-07 3,695 15.3% 239 1,566 15.5x 2.4x
Heilan Home Garmet Heilan Home 17-Mar-14 1,980 23.3% 136 582 14.6x 3.4x
The Gymboree Bain Capital 24-Nov-10 1,673 20.7% 216 1,046 7.7x 1.6x
Jos A Bank Clothiers Tailored Brands 26-Nov-13 1,486 12.9% 133 1,032 11.2x 1.4x
rue21 Apax Partners 11-Oct-13 934 11.0% 102 925 9.2x 1.0x
Link Theory Holdings Fast Retailing 12-Mar-09 364 7.5% 38 513 9.5x 0.7x
J Crew Group Leonard Green & Partners 7-Mar-11 2,637 18.4% 316 1,712 8.4x 1.5x
Average $1,216 14.2% $118 $924 10.6x 1.5x
Median 635 13.5% 78 561 9.2x 1.4x
LVMH 25.6% $9,888 $38,542
Target Company
LTM Transaction Value
Acquirer Date
LVMH 2013E EBITDA $9,888

LVMH Discounted Cash Flow Analysis
DCF Implied EnterpriseValue DCF Sensitivity Analysis
$90,269$87,650$85,216
$97,208$92,832$88,457
Perpetuity
Growth
Implied
Enterprise
Value
EBITDA Exit
Multiple
Implied
Enterprise Value
Bear Base Bull
2014 E 2015 E 2016 E 2017 E 2018 E
Revenue $41,240 $44,127 $47,216 $50,521 $54,058
Less: Operating Expenses 32,827 35,125 37,584 40,215 43,030
Operating Income $8,413 $9,002 $9,632 $10,306 $11,028
Tax Effect 2,587 2,768 2,962 3,170 3,391
NOPAT $5,826 $6,234 $6,670 $7,137 $7,636
Plus: D&A 2,144 2,295 2,455 2,627 2,811
Change in Working Capital (584) (333) (606) (648) (693)
Less: CapEx (2,227) (2,383) (2,550) (2,728) (2,919)
Unlevered Free Cash Flow $5,159 $5,812 $5,970 $6,388 $6,835
Capital Structure
Debt 12.22%
Equity 87.78%
Beta 0.99
Cost of Debt 0.63%
WACC 9.60%
WACC Calculation
87,650.7 2.5% 2.6% 2.8% 2.9% 3.0%
8.6% $99,485 $101,170 $102,927 $104,761 $106,677
9.1% $91,812 $93,224 $94,690 $96,216 $97,804
9.6% $85,216 $86,411 $87,650 $88,935 $90,269
10.1% $79,503 $80,526 $81,584 $82,679 $83,813
10.6% $74,491 $75,374 $76,286 $77,228 $78,201
Perpetuity Growth
WACC
92,832.7 7.5x 7.8x 8.0x 8.3x 8.5x
8.6% $92,162 $94,452 $96,743 $99,033 $101,323
9.1% $90,285 $92,523 $94,762 $97,000 $99,238
9.6% $88,457 $90,645 $92,832 $95,020 $97,208
10.1% $86,677 $88,815 $90,953 $93,092 $95,230
10.6% $84,942 $87,033 $89,123 $91,214 $93,304
Exit Multiple
WACC

Hermes Investor Returns
2014 2015 2016 2017 2018
Years of Investment 1.0 2.0 3.0 4.0 5.0
EBITDA $1,919 $2,129 $2,344 $2,544 $2,729
x EBITDA Multiple 16.1x 16.1x 16.1x 16.1x 16.1x
Enterprise Value $30,901 $34,281 $37,745 $40,957 $43,945
Net Debt ($2,151) ($2,908) ($3,787) ($4,784) ($5,890)
Equity Value $28,750 $31,374 $33,958 $36,173 $38,054
Investor Returns

Moncler Comparable Companies Analysis
• Industry average EV/EBITDA multiple was used to generate the
bull case
• Moncler is fairly valued compared to industry peers in terms of
Enterprise Value/EBITDA
• Moncler has significantly better EBITDA margins than industry
peers
Market Enterprise
Superdry $1,094 $950 20.1% 18.3% 6.9x 6.7x 1.4x 1.2x 15.8x 14.3x
Hugo Boss 10,210 10,235 24.1% 21.8% 12.4x 15.1x 3.0x 3.3x 20.9x 27.5x
CCC 1,022 1,140 14.9% 15.7% 12.0x 11.8x 1.8x 1.9x 7.6x 12.9x
JD Sports Fashion 1,005 931 9.7% 9.7% 5.1x 3.9x 0.5x 0.4x 10.3x 7.9x
Ted Baker 992 1,006 16.1% 16.4% 12.4x 9.7x 2.0x 1.6x 21.3x 16.9x
Next Plc 12,694 13,568 23.0% 23.2% 10.1x 8.9x 2.3x 2.1x 14.4x 12.2x
LLP 3,565 3,678 16.4% 14.1% 14.8x 19.1x 2.4x 2.7x 23.4x 38.2x
Sports Direct International 5,459 5,619 11.7% 11.5% 11.1x 10.8x 1.3x 1.2x 18.6x 15.7x
Average $4,505 $4,641 17.0% 16.3% 10.6x 10.7x 1.8x 1.8x 16.5x 18.2x
Median 2,330 2,409 16.2% 16.0% 11.5x 10.3x 1.9x 1.7x 17.2x 15.0x
Moncler $3,013 $3,189 33.1% 33.1% 10.7x 9.8x 3.5x 3.2x 20.3x 18.2x
Price/EarningsEnterprise Value/RevenueEnterprise Value/EBITDAEBITDA Margin
Company Name
MONC 2014E EBITDA $299

Moncler PrecedentTransactions Analysis
• Based off recent M&A activity, we derived an implied enterprise
value for Moncler between $2,909 - $3,413 M
• The highTV/EBITDA multiple was used to generate the bull
case for the enterprise value for Moncler
• We felt that the highTV/EBITDA multiple was most accurate
as Moncler’s best peers,Volcom and HUGO BOSS, were
acquired for much higher multiples than the blended average
generated from precedent transactions
MONC 2013 EBITDA $247
Transaction EBITDA
True Religion Apparel TowerBrook Capital Partners 10-May-13 $635 16.1% $78 $481 8.2x 1.3x
Fiberweb AVINTIV Specialty Materials 18-Nov-13 278 9.5% 45 470 6.2x 0.6x
Jones Group Inc Sycamore Partners 19-Dec-13 2,199 6.5% 245 3,765 9.0x 0.6x
Pacific Brands Hanesbrands 13-Jan-12 365 13.5% 58 430 6.3x 0.8x
J Crew Group Leonard Green & Partners 7-Mar-11 2,637 18.4% 316 1,712 8.4x 1.5x
The Gymboree Bain Capital 24-Nov-10 1,673 20.7% 216 1,046 7.7x 1.6x
Average $1,499 13.7% $154 $1,225 9.6x 1.3x
Median 1,154 14.4% 147 763 8.3x 1.4x
Moncler 32.0% $247 $771
DateAcquirerTarget Company
Transaction ValueLTM

Capital Structure
Debt 6.83%
Equity 93.17%
Beta 0.82
Cost of Debt 1.05%
WACC 9.88%
WACC Calculation
Moncler Discounted Cash Flow Analysis
$2,772$2,634$2,514
$3,277$3,146$3,014
Perpetuity
Growth
Implied
Enterprise
Value
EBITDA Exit
Multiple
Implied
Enterprise Value
Bear Base Bull
2014 E 2015 E 2016 E 2017 E 2018 E
Revenue $902 $983 $1,072 $1,168 $1,273
Less: Operating Expenses 642 700 763 832 907
Operating Income $260 $283 $309 $336 $367
Tax Effect 91 99 108 118 128
NOPAT $169 $184 $201 $219 $238
Plus: D&A 39 42 46 50 55
Less: CapEx (53) (58) (63) (69) (75)
Unlevered Free Cash Flow $133 $159 $173 $189 $206
2,634.3 2.0% 2.3% 2.5% 2.8% 3.0%
8.9% $2,842 $2,922 $3,008 $3,101 $3,201
9.4% $2,666 $2,734 $2,807 $2,885 $2,969
9.9% $2,514 $2,572 $2,634 $2,701 $2,772
10.4% $2,380 $2,431 $2,485 $2,542 $2,603
10.9% $2,263 $2,307 $2,354 $2,403 $2,456
Perpetuity Growth
WACC 3,145.8 8.2x 8.5x 8.7x 9.0x 9.2x
8.9% $3,115 $3,184 $3,253 $3,322 $3,390
9.4% $3,064 $3,131 $3,199 $3,266 $3,333
9.9% $3,014 $3,080 $3,146 $3,212 $3,277
10.4% $2,966 $3,030 $3,095 $3,159 $3,223
10.9% $2,919 $2,982 $3,045 $3,107 $3,170
Exit Multiple
WACC

Tumi Comparable Companies Analysis
• The average EV/EBITDA multiple was used for the bull case to
arrive at an implied enterprise value
• The median EV/Revenue multiple was used to derive the bear
• Tumi is undervalued relative to peers in every metric except for
price/earnings where they are in line with the peer group averages
TUMI 2014E EBITDA $106
EV/EBITDA Multiple 13.0x ----------------14.5x
Enterprise Value $1,375----------------$1,533
TUMI 2014E Revenue $523
TUMI 2014E Earnings $56
P/E Multiple 22.5x ----------------24.0x
Market Enterprise
Samsonite International $4,639 $4,413 15.5% 15.5% 12.1x 11.7x 1.9x 1.8x 23.5x 22.0x
Salvatore Ferragamo 5,021 5,175 22.1% 22.8% 13.2x 14.3x 2.9x 3.3x 24.0x 26.2x
Hugo Boss 10,210 10,235 24.1% 21.8% 12.4x 15.1x 3.0x 3.3x 20.9x 27.5x
Kerig 27,680 33,028 20.0% 17.8% 12.4x 14.5x 2.5x 2.6x 18.1x 25.7x
Micahel Kors 18,114 19,086 33.1% 32.1% 17.4x 13.6x 5.8x 4.4x 27.8x 20.9x
Hermes International 39,025 37,331 35.7% 36.0% 19.1x 19.3x 6.8x 6.9x 33.2x 35.3x
Average $17,448 $18,211 25.1% 24.3% 14.5x 14.7x 3.8x 3.7x 24.6x 26.3x
Median 14,162 14,660 23.1% 22.3% 12.8x 14.4x 3.0x 3.3x 23.8x 25.9x
Tumi Holding $1,393 $1,364 20.2% 20.1% 12.9x 12.2x 2.6x 2.5x 24.7x 23.4x
Company Name
Price/EarningsEnterprise Value/RevenueEnterprise Value/EBITDAEBITDA Margin

Tumi PrecedentTransactions Analysis
• Based off recent M&A activity, we derived an implied enterprise
value forTumi between $1,262 - $1,618 million
• The averageTV/EBITDA andTV/Revenue multiples were used
to generate the bull case for the enterprise value of Tumi
• Significant control premiums have been in play for prior
transactions, something LVMH might be wary of should they
pursue this acquisition
TUMI 2013 EBITDA $101
EV/EBITDA Multiple 14.1x ----------------16.1x
TUMI 2013 Revenue $467
Transaction EBITDA
Heilan Home Garmet Heilan Home 17-Mar-14 $1,980 23.3% $136 $582 14.6x 3.4x
Loro Piana SpA LVMH 8-Jul-13 2,574 19.8% 96 484 26.9x 5.3x
Handsome Co. Hyundai Home Shopping Network 16-Feb-12 365 19.1% 22 117 16.4x 3.1x
Camaieu International Cinven Ltd 29-Mar-11 546 21.5% 69 323 7.9x 1.7x
Average $1,612 18.1% $99 $567 16.1x 2.9x
Median 1,263 19.4% 83 408 15.5x 2.7x
Tumi Holding 21.5% $101 $467
AcquirerTarget Company Date
LTM Transaction Value

Tumi Discounted Cash Flow Analysis
$553$529$508
$1,062$1,025$988
Perpetuity
Growth
Implied
Enterprise
Value
EBITDA Exit
Multiple
Implied
Enterprise Value
Bear Base Bull
Capital Structure
Debt 0.57%
Equity 99.43%
Beta 1.32
Cost of Debt 1.72%
WACC 11.11%
WACC Calculation
2014E 2015E 2016E 2017E 2018E
Revenue $523 $555 $583 $606 $630
Less: Operating Expenses 434 461 485 504 524
Operating Income $89 $94 $98 $102 $106
Tax Effect 33 34 36 37 39
NOPAT $56 $59 $62 $65 $67
Plus: D&A 17 18 19 19 20
Less: CapEx (28) (29) (31) (32) (33)
Unlevered Free Cash Flow $40 $44 $47 $49 $51
529.0 2.0% 2.3% 2.5% 2.8% 3.0%
10.1% $571 $585 $600 $615 $632
10.6% $538 $550 $562 $576 $590
11.1% $508 $518 $529 $541 $553
11.6% $481 $490 $499 $510 $521
12.1% $456 $464 $473 $482 $492
Perpetuity Growth
WACC 1,025.1 11.0x 11.3x 11.5x 11.8x 12.0x
10.1% $1,030 $1,050 $1,069 $1,089 $1,108
10.6% $1,009 $1,028 $1,047 $1,066 $1,085
11.1% $988 $1,006 $1,025 $1,044 $1,062
11.6% $968 $986 $1,004 $1,022 $1,040
12.1% $948 $965 $983 $1,001 $1,019
Exit Multiple
WACC

LVMH Income Statement
2011 A 2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Revenue $32,943 $36,137 $38,542 $41,240 $44,127 $47,216 $50,521 $54,058
Fashion and Leather Goods 12,075 12,694 13,062 14,517 15,533 16,620 17,783 19,028
Selective Retailing 8,931 10,102 11,795 11,795 12,620 13,504 14,449 15,460
Perfumes and Cosmetics 3,970 4,070 4,291 4,743 5,075 5,430 5,810 6,217
Wines and Spirits 4,889 5,293 5,507 6,021 6,443 6,894 7,376 7,892
Watches and Jewelry 2,661 3,572 3,515 3,712 3,971 4,249 4,547 4,865
Holding Companies and Other 418 406 372 454 485 519 556 595
COGS 11,267 12,752 13,279 14,352 15,356 16,431 17,581 18,812
Gross Profit $21,676 $23,385 $25,263 $26,889 $28,771 $30,785 $32,940 $35,246
Operating Expenses $14,499 $16,005 $17,398 $18,476 $19,769 $21,153 $22,633 $24,218
SG&A 14,347 15,771 17,240 18,291 19,571 20,941 22,407 23,976
R&D 88 89 94 111 119 127 136 145
Other Operating Expenses 64 145 64 74 79 85 91 97
Operating Income $7,176 $7,380 $7,865 $8,413 $9,002 $9,632 $10,306 $11,028
Interest Expense $206 $178 $144 $150 $131 $111 $92 $72
Other Investment Loss (Income) (75) (224) (94) (131) (131) (131) (131) (131)
Foreign Exchange Loss (Gain) 146 63 211 140 140 140 140 140
Other Expense (Income) 60 1 33 20 20 20 20 20
Total Other Expenses $337 $18 $293 $179 $160 $140 $121 $101
Earnings Before Taxes $6,839 $7,362 $7,572 $8,234 $8,842 $9,492 $10,186 $10,927
Corporate Taxes $2,023 $2,340 $2,329 $2,552 $2,741 $2,942 $3,158 $3,387
Minority Interest 549 619 679 742 794 850 909 973
Net Earnings $4,267 $4,403 $4,564 $4,939 $5,307 $5,700 $6,119 $6,566
Basic Earnings per Share $8.73 $8.82 $9.13 $9.86 $10.57 $11.33 $12.14 $13.00
Metrics & Drivers
% Revenue Growth 22.2% 9.7% 6.7% 7.0% 7.0% 7.0% 7.0% 7.0%
% Fashion and Leather Goods 36.7% 35.1% 33.9% 35.2% 35.2% 35.2% 35.2% 35.2%
% Selective Retailing 27.1% 28.0% 30.6% 28.6% 28.6% 28.6% 28.6% 28.6%
% Perfumes and Cosmetics 12.1% 11.3% 11.1% 11.5% 11.5% 11.5% 11.5% 11.5%
% Wines and Spirits 14.8% 14.6% 14.3% 14.6% 14.6% 14.6% 14.6% 14.6%
% Watches and Jewelry 8.1% 9.9% 9.1% 9.0% 9.0% 9.0% 9.0% 9.0%
% Holding Companies and Other 1.3% 1.1% 1.0% 1.1% 1.1% 1.1% 1.1% 1.1%
% COGS 34.2% 35.3% 34.5% 34.8% 34.8% 34.8% 34.8% 34.8%
% Gross Profit 65.8% 64.7% 65.5% 65.2% 65.2% 65.2% 65.2% 65.2%
% Operating Expenses 44.0% 44.3% 45.1% 44.8% 44.8% 44.8% 44.8% 44.8%
% Operating Margin 21.8% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4%
% Minority Interest 1.7% 1.7% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%
% Net Margin 13.0% 12.2% 11.8% 12.0% 12.0% 12.1% 12.1% 12.1%
Corporate Tax Rate 29.6% 31.8% 30.8% 31.0% 31.0% 31.0% 31.0% 31.0%
($ in Millions, except per share amount)
Income Statement Historical Projected

LVMH Balance Sheet
2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Cash and Cash Equivalents $2,898 $4,448 $5,804 $7,682 $9,580 $11,751 $14,214
Short-Term Investments 234 236 236 236 236 236 236
Accounts Receivable 2,620 2,998 3,164 3,313 3,544 3,793 4,058
Inventory 10,663 11,710 12,496 13,194 14,118 15,106 16,163
Other Current Assets 2,422 2,631 2,804 3,001 3,211 3,435 3,676
Total Current Assets $18,836 $22,022 $24,503 $27,425 $30,689 $34,320 $38,347
Net Property, Plant & and Equipment $11,572 $13,266 $13,349 $13,437 $13,532 $13,633 $13,741
Long Term Investment & Receivables 7,924 9,763 9,763 9,763 9,763 9,763 9,763
Other Long-Term Assets 27,650 32,410 32,410 32,410 32,410 32,410 32,410
Total Assets $65,982 $77,461 $80,024 $83,034 $86,393 $90,125 $94,260
Accounts Payable $6,540 $7,101 $7,588 $8,119 $8,688 $9,296 $9,947
Short Term Debt 3,927 6,445 6,445 6,445 6,445 6,445 6,445
Deferred Revenue 637 772 825 883 944 1,010 1,081
Other Current Liabilities 1,408 1,730 1,732 1,853 1,983 2,122 2,270
Total Current Liabilities $12,513 $16,049 $16,590 $17,300 $18,060 $18,873 $19,743
Long Term Debt $5,062 $5,721 $5,021 $4,321 $3,621 $2,921 $2,221
Other Long-Term Liabilities 14,744 17,210 17,210 17,210 17,210 17,210 17,210
Total Liabilities $32,319 $38,980 $38,821 $38,831 $38,891 $39,004 $39,174
Shareholders' Equity 33,663 38,481 41,203 44,203 47,501 51,121 55,086
Total Liabilities and Equity $65,982 $77,461 $80,024 $83,034 $86,393 $90,125 $94,260
Check - - - - - - - - - - - - - -
Metrics & Drivers
Net Earnings $4,403 $4,564 $4,939 $5,307 $5,700 $6,119 $6,566
Cash Ratio 0.25 0.29 0.36 0.46 0.54 0.64 0.73
Return on Equity 13.1% 11.9% 12.0% 12.0% 12.0% 12.0% 11.9%
Net Debt $1,930 $1,037 ($1,018) ($3,597) ($6,195) ($9,066) ($12,229)
Book Value of Equity per Share 67.5x 77.0x 82.2x 88.1x 94.4x 101.4x 109.1x
Balance Sheet
($ in Millions)
Historical Projected

LVMH Statement of Cash Flows
2014 E 2015 E 2016 E 2017 E 2018 E
Net Earnings $4,939 $5,307 $5,700 $6,119 $6,566
Depreciation 2,144 2,295 2,455 2,627 2,811
Cash From Operating Activities $6,499 $7,268 $7,549 $8,098 $8,684
Capital Expenditures (2,227) (2,383) (2,550) (2,728) (2,919)
Cash From Investing Activities ($2,227) ($2,383) ($2,550) ($2,728) ($2,919)
Dividends ($2,147) ($2,237) ($2,331) ($2,429) ($2,531)
Share Repurchases (70) (70) (70) (70) (70)
Change in Revolver - - - - - - - - - -
Change in Long-Term Debt (700) (700) (700) (700) (700)
Cash From Financing Activities ($2,917) ($3,007) ($3,101) ($3,199) ($3,301)
Change in Cash $1,355 $1,878 $1,898 $2,171 $2,464
Beginning Cash $4,448 $5,804 $7,682 $9,580 $11,751
Ending Cash 5,804 7,682 9,580 11,751 14,214
Metrics & Drivers
Free Cash Flow $4,272 $4,885 $4,999 $5,370 $5,765
Free Cash Flow Per Share $8.53 $9.73 $9.94 $10.65 $11.42
Operating Profit 8,413 9,002 9,632 10,306 11,028
EBITDA 10,558 11,297 12,087 12,933 13,839
EBITDA Margin 25.6% 25.6% 25.6% 25.6% 25.6%
Statement of Cash Flows
($ in Millions)
Projected

LVMH DuPont Ratios
2011 A 2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Profitability
Gross Profit Margin 65.8% 64.7% 65.5% 65.2% 65.2% 65.2% 65.2% 65.2%
Operating Profit Margin 21.8% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4%
Net Profit Margin 13.0% 12.2% 11.8% 12.0% 12.0% 12.1% 12.1% 12.1%
Efficiency
Accounts Receivable Turnover - - 13.8x 12.9x 13.0x 13.3x 13.3x 13.3x 13.3x
Day's Sales Outstanding in Receivables - - 26.5 28.4 28.0 27.4 27.4 27.4 27.4
Accounts Payable Turnover - - 1.7x 1.8x 1.7x 1.8x 1.8x 1.8x 1.8x
Day's Sales Outstanding in Payables - - 211.9 203.3 208.6 206.5 206.5 206.5 206.5
Fixed Asset Turnover - - 3.1x 2.9x 3.1x 3.3x 3.5x 3.7x 3.9x
Leverage
Debt Ratio - - 7.7% 7.4% 6.3% 5.2% 4.2% 3.2% 2.4%
Debt-to-Equity Ratio - - 15.0% 14.9% 12.2% 9.8% 7.6% 5.7% 4.0%
Times Interest Earned Ratio - - 34.8x 41.6x 54.8x 55.9x 68.8x 86.6x 112.5x
Net Debt - - $1,930 $1,037 ($1,018) ($3,597) ($6,195) ($9,066) ($12,229)
Liquidity
Current Ratio - - 1.5x 1.4x 1.5x 1.6x 1.7x 1.8x 1.9x
Quick Ratio - - 0.3x 0.3x 0.4x 0.5x 0.5x 0.6x 0.7x
Working Capital - - $7,118 $7,734 $8,319 $8,652 $9,258 $9,906 $10,599
DuPont Ratios
($ in millions)

Hermes Income Statement
2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E
Revenue $3,956 $4,480 $4,988 $5,547 $6,154 $6,776 $7,352 $7,889
COGS 1,234 1,428 1,555 1,753 1,945 2,141 2,323 2,493
Gross Profit $2,722 $3,052 $3,433 $3,794 $4,209 $4,635 $5,029 $5,396
Operating Expenses 1,489 1,613 1,815 2,019 2,240 2,466 2,676 2,871
Operating Income $1,233 $1,439 $1,618 $1,775 $1,969 $2,168 $2,353 $2,524
Other Expense (Income) (15) (15) (8) (8) (8) (8) (8) (8)
Other Non-Op (Income) Loss (3) 37 38 38 38 38 38 38
Total Other Expenses ($17) $24 $31 $31 $31 $31 $30 $30
Earnings Before Taxes $1,250 $1,415 $1,587 $1,744 $1,938 $2,138 $2,322 $2,494
Corporate Taxes 404 449 528 576 640 705 766 823
Net Income from Associates 6 1 (3) (3) (3) (3) (3) (3)
Net Earnings $827 $953 $1,048 $1,158 $1,288 $1,421 $1,545 $1,660
Metrics & Drivers
% Revenue Growth 24.2% 13.2% 11.3% 11.2% 10.9% 10.1% 8.5% 7.3%
% Gross Margin 68.8% 68.1% 68.8% 68.4% 68.4% 68.4% 68.4% 68.4%
% Net Margin 20.9% 21.3% 21.0% 20.9% 20.9% 21.0% 21.0% 21.0%
Historical ProjectedIncome Statement
($ in Millions, except per share amount

Hermes Historical Revenue Breakdown
2011 S1 A 2011 S2 A 2011 A 2012 S1 A 2012 S2 A 2012 A 2013 S1 A 2013 S2 A 2013 A 2014 S1 A
Revenue by Segment
Leather Goods & Saddles $885 $990 $1,875 $959 $1,092 $2,052 $1,024 $1,147 $2,171 $1,153
Clothing & Accessories 367 435 802 434 524 958 520 601 1,121 604
Silk & Textiles 212 271 483 237 308 545 265 339 604 296
Perfumes 62 90 152 90 122 212 124 164 288 171
Art of Living &Jewelry 111 111 221 116 121 237 140 138 278 157
Other Products 81 77 157 90 84 174 111 114 225 142
Watches 83 110 193 101 121 222 98 124 222 92
Tableware 34 37 71 36 41 78 38 43 81 - -
Total Revenue $1,834 $2,120 $3,954 $2,064 $2,412 $4,477 $2,321 $2,670 $4,990 $2,614
YOY % Growth
Leather Goods & Saddles % Growth 21.7% 13.7% - - 8.4% 10.3% 9.4% 6.8% 5.0% 5.8% 12.5%
Clothing & Accessories % Growth 37.3% 34.5% - - 18.5% 20.4% 19.5% 19.6% 14.8% 17.0% 16.3%
Silk & Textiles % Growth 36.1% 22.5% - - 11.9% 13.9% 13.0% 11.6% 10.0% 10.7% 11.8%
Perfumes % Growth (30.4%) (4.8%) - - 45.7% 36.2% 40.1% 37.9% 34.0% 35.7% 37.2%
Art of Living &Jewelry % Growth 83.3% 23.8% - - 4.9% 8.9% 6.9% 20.7% 14.7% 17.6% 12.1%
Other Products % Growth 74.1% 11.0% - - 11.4% 9.0% 10.2% 23.6% 36.5% 29.8% 27.3%
Watches % Growth 49.0% 89.0% - - 21.1% 9.9% 14.7% (2.5%) 2.6% 0.3% (6.4%)
Tableware % Growth 32.3% 13.3% - - 8.0% 10.7% 9.4% 4.4% 4.8% 4.6% (100.0%)
% of Revenue
Leather Goods & Saddles % of Revenue 48.3% 46.7% 47.4% 46.5% 45.3% 45.8% 44.1% 43.0% 43.5% 44.1%
Clothing & Accessories % of Revenue 20.0% 20.5% 20.3% 21.0% 21.7% 21.4% 22.4% 22.5% 22.5% 23.1%
Silk & Textiles % of Revenue 11.6% 12.8% 12.2% 11.5% 12.8% 12.2% 11.4% 12.7% 12.1% 11.3%
Perfumes % of Revenue 3.4% 4.2% 3.8% 4.4% 5.1% 4.7% 5.4% 6.1% 5.8% 6.5%
Art of Living &Jewelry % of Revenue 6.0% 5.2% 5.6% 5.6% 5.0% 5.3% 6.0% 5.2% 5.6% 6.0%
Other Products % of Revenue 4.4% 3.6% 4.0% 4.4% 3.5% 3.9% 4.8% 4.3% 4.5% 5.4%
Watches % of Revenue 4.5% 5.2% 4.9% 4.9% 5.0% 5.0% 4.2% 4.6% 4.5% 3.5%
Tableware % of Revenue 1.8% 1.8% 1.8% 1.8% 1.7% 1.7% 1.6% 1.6% 1.6% - -
HistoricalRevenue Breakdown
($ in Millions)

Hermes Projected Revenue Breakdown
2014 S2 E 2014 E 2015 S1 E 2015 S2 E 2015 E 2016 S1 E 2016 S2 E 2016 E 2017 S1 E 2017 S2 E 2017 E 2018 S1 E 2018 S2 E 2018 E
Revenue by Segment
Leather Goods & Saddles $1,258 $2,410 $1,233 $1,379 $2,612 $1,319 $1,513 $2,832 $1,399 $1,634 $3,032 $1,483 $1,764 $3,247
Clothing & Accessories 685 1,289 695 788 1,483 778 894 1,672 840 993 1,833 882 1,072 1,954
Silk & Textiles 379 675 329 423 752 365 470 835 405 521 926 450 563 1,012
Perfumes 193 364 195 224 418 218 250 467 240 277 517 259 302 561
Art of Living &Jewelry 160 317 173 178 351 185 192 377 198 207 405 214 222 436
Other Products 130 272 163 149 312 188 172 360 208 191 400 225 207 432
Watches 128 220 96 130 226 99 133 232 103 137 239 106 141 247
Tableware - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Total Revenue $2,933 $5,547 $2,882 $3,272 $6,154 $3,152 $3,624 $6,776 $3,392 $3,960 $7,352 $3,618 $4,271 $7,889
YOY % Growth
Leather Goods & Saddles % Growth 9.7% 11.0% 7.0% 9.7% 8.4% 7.0% 9.7% 8.4% 6.0% 8.0% 7.1% 6.0% 8.0% 7.1%
Clothing & Accessories % Growth 14.0% 15.1% 15.0% 15.0% 15.0% 12.0% 13.5% 12.8% 8.0% 11.0% 9.6% 5.0% 8.0% 6.6%
Silk & Textiles % Growth 12.0% 11.9% 11.0% 11.5% 11.3% 11.0% 11.2% 11.1% 11.0% 10.8% 10.9% 11.0% 8.0% 9.3%
Perfumes % Growth 18.0% 26.3% 14.0% 16.0% 15.1% 12.0% 11.5% 11.7% 10.0% 11.0% 10.5% 8.0% 9.0% 8.5%
Art of Living &Jewelry % Growth 15.8% 14.0% 10.0% 11.0% 10.5% 7.0% 8.0% 7.5% 7.0% 8.0% 7.5% 8.0% 7.0% 7.5%
Other Products % Growth 14.0% 20.6% 15.0% 15.0% 15.0% 15.2% 15.2% 15.2% 11.0% 11.2% 11.1% 8.0% 8.0% 8.0%
Watches % Growth 3.0% (1.2%) 4.0% 2.0% 2.8% 3.5% 2.0% 2.6% 3.5% 3.0% 3.2% 3.5% 3.0% 3.2%
Tableware % Growth - - (100.0%) - - - - - - - - - - - - - - - - - - - - - - - -
% of Revenue
Leather Goods & Saddles % of Revenue 42.9% 43.5% 42.8% 42.2% 42.5% 41.9% 41.7% 41.8% 41.2% 41.3% 41.2% 41.0% 41.3% 41.2%
Clothing & Accessories % of Revenue 23.4% 23.2% 24.1% 24.1% 24.1% 24.7% 24.7% 24.7% 24.8% 25.1% 24.9% 24.4% 25.1% 24.8%
Silk & Textiles % of Revenue 12.9% 12.2% 11.4% 12.9% 12.2% 11.6% 13.0% 12.3% 11.9% 13.2% 12.6% 12.4% 13.2% 12.8%
Perfumes % of Revenue 6.6% 6.6% 6.8% 6.8% 6.8% 6.9% 6.9% 6.9% 7.1% 7.0% 7.0% 7.2% 7.1% 7.1%
Art of Living &Jewelry % of Revenue 5.5% 5.7% 6.0% 5.4% 5.7% 5.9% 5.3% 5.6% 5.8% 5.2% 5.5% 5.9% 5.2% 5.5%
Other Products % of Revenue 4.4% 4.9% 5.6% 4.6% 5.1% 6.0% 4.8% 5.3% 6.1% 4.8% 5.4% 6.2% 4.8% 5.5%
Watches % of Revenue 4.4% 4.0% 3.3% 4.0% 3.7% 3.1% 3.7% 3.4% 3.0% 3.5% 3.3% 2.9% 3.3% 3.1%
Tableware % of Revenue - - - - - - - - - - - - - - - - - - - - - - - - - - - -
ProjectedRevenue Breakdown
($ in Millions)

Hermes Balance Sheet
2012A 2013A 2014E 2015E 2016E 2017E 2018E
Cash and Cash Equivalents $264 $422 $1,149 $1,901 $2,775 $3,767 $4,868
Short Term Investments 656 1,031 1,031 1,031 1,031 1,031 1,031
Accounts Receivable 273 267 304 337 371 403 432
Inventory 959 1,122 1,193 1,323 1,457 1,581 1,696
Other Current Assets 227 260 288 320 352 382 410
Total Current Assets $2,379 $3,102 $3,965 $4,912 $5,986 $7,164 $8,438
Net Property, Plant & and Equipment $1,459 $1,543 $1,632 $1,731 $1,839 $1,957 $2,083
Other Long-Term Assets 656 785 785 785 785 785 785
Total Assets $4,495 $5,430 $6,382 $7,427 $8,610 $9,905 $11,306
Accounts Payable $398 $433 $488 $542 $596 $647 $694
Accrued Liabilities 221 197 272 302 332 360 387
Other Current Liabilities 521 583 643 714 786 853 915
Total Current Liabilities $1,140 $1,213 $1,403 $1,557 $1,714 $1,860 $1,996
Total Debt $31 $34 $29 $24 $19 $14 $9
Other Long-Term Liabilities 211 265 265 265 265 265 265
Total Liabilities $1,383 $1,512 $1,697 $1,845 $1,998 $2,139 $2,269
Shareholders' Equity 3,112 3,918 4,685 5,582 6,613 7,767 9,036
check - - - - - - - - - - - - - -
Metrics & Drivers
Net Earnings $953 $1,048 $1,158 $1,288 $1,421 $1,545 $1,660
Cash Ratio 0.8 1.2 1.6 1.9 2.2 2.6 3.0
Return on Equity 30.6% 26.8% 24.7% 23.1% 21.5% 19.9% 18.4%
Net Debt ($889) ($1,419) ($2,151) ($2,908) ($3,787) ($4,784) ($5,890)
ProjectedHistoricalBalance Sheet
($ in Millions)

Hermes Statement of Cash Flows
2014E 2015E 2016E 2017E 2018E
Net Earnings $1,158 $1,288 $1,421 $1,545 $1,660
Depreciation 144 160 176 191 205
Change in Working Capital 53 (42) (43) (40) (37)
Cash From Operating Activities $1,355 $1,406 $1,555 $1,697 $1,828
Capital Expenditures (233) (258) (285) (309) (331)
Cash From Investing Activities ($233) ($258) ($285) ($309) ($331)
Dividends ($391) ($391) ($391) ($391) ($391)
Cash From Financing Activities ($396) ($396) ($396) ($396) ($396)
Change in Cash $727 $752 $874 $992 $1,101
Beginning Cash $422 $1,149 $1,901 $2,775 $3,767
Ending Cash 1,149 1,901 2,775 3,767 4,868
Metrics & Drivers
Free Cash Flow $1,122 $1,148 $1,270 $1,388 $1,497
Operating Profit 1,775 1,969 2,168 2,353 2,524
EBITDA 1,919 2,129 2,344 2,544 2,729
EBITDA Margin 34.6% 34.6% 34.6% 34.6% 34.6%
ProjectedStatement of Cash Flows
($ in Millions)

Hermes DuPont Ratios
2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E
Profitability
Efficiency
Leverage
Debt Ratio - - 0.7% 0.6% 0.5% 0.3% 0.2% 0.1% 0.1%
Times Interest Earned Ratio - - 2,054.8x 757.3x 1,244.7x 1,487.7x 1,963.0x 2,666.3x 3,775.3x
Net Debt - - ($889) ($1,419) ($2,151) ($2,908) ($3,787) ($4,784) ($5,890)
Liquidity
Working Capital - - $319 $435 $382 $423 $466 $506 $543
($ in Millions)
DuPont Ratios Historical Projected

Moncler Income Statement
2011 A 2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Revenue $506 $629 $771 $902 $983 $1,072 $1,168 $1,273
COGS 167 191 221 277 302 329 359 391
Gross Profit $339 $438 $550 $625 $681 $743 $810 $882
Operating Expenses $198 $251 $329 $365 $398 $434 $473 $516
SG&A 194 251 321 362 394 430 468 511
Other Operating Expenses 4 - - 8 4 4 4 5 5
Operating Income $142 $188 $221 $260 $283 $309 $336 $367
Other Expense (Income) 1 1 5 2 2 2 2 2
Total Other Expenses $18 $22 $28 $24 $21 $17 $13 $9
Earnings Before Taxes $124 $165 $193 $235 $263 $292 $324 $358
Corporate Taxes $43 $57 $68 $82 $92 $102 $113 $125
Extraordinary Losses - - 69 21 - - - - - - - - - -
Net Earnings $77 $37 $101 $149 $166 $184 $205 $226
Metrics & Drivers
% Revenue Growth 24.2% 22.6% 17.0% 9.0% 9.0% 9.0% 9.0%
% COGS 33.0% 30.3% 28.7% 30.7% 30.7% 30.7% 30.7% 30.7%
% Gross Profit 67.0% 69.7% 71.3% 69.3% 69.3% 69.3% 69.3% 69.3%
% Operating Expenses 39.0% 39.9% 42.7% 40.5% 40.5% 40.5% 40.5% 40.5%
% Minority Interest 0.7% 0.5% 0.4% 0.5% 0.5% 0.5% 0.5% 0.5%
% Net Margin 15.3% 5.9% 13.1% 16.5% 16.9% 17.2% 17.5% 17.8%

Moncler Balance Sheet
2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Cash and Cash Equivalents $125 $145 $223 $328 $450 $589 $747
Inventories 128 107 153 167 182 199 216
Total Current Assets $435 $444 $619 $760 $921 $1,103 $1,308
Net Property, Plant & and Equipment $68 $80 $95 $110 $128 $146 $167
Total Assets $1,105 $1,139 $1,328 $1,485 $1,663 $1,863 $2,088
Accounts Payable $223 $207 $281 $306 $333 $363 $396
Short Term Debt 128 160 160 160 160 160 160
Deferred Revenue - - - - - - - - - - - - - -
Other Current Liabilities 7 7 9 10 11 12 13
Total Current Liabilities $358 $374 $450 $476 $504 $535 $569
Total Debt $301 $221 $186 $151 $116 $81 $46
Total Liabilities $787 $710 $751 $742 $736 $732 $731
Shareholders' Equity 318 428 577 743 927 1,132 1,358
check - - - - - - - - - - - - - -
Metrics & Drivers
Net Earnings $37 $101 $149 $166 $184 $205 $226
Cash Ratio 0.35 0.39 0.49 0.69 0.89 1.10 1.31
Return on Equity 11.6% 23.6% 25.7% 22.3% 19.9% 18.1% 16.7%
Net Debt $176 $76 ($37) ($177) ($334) ($508) ($702)
Historical ProjectedBalance Sheet
($ in Millions)

Moncler Statement of Cash Flows
2014 E 2015 E 2016 E 2017 E 2018 E
Net Earnings $149 $166 $184 $205 $226
Depreciation 39 42 46 50 55
Cash From Operating Activities $166 $198 $220 $243 $268
Dividends - - - - - - - - - -
Share Repurchases - - - - - - - - - -
Scheduled Debt Paydown (35) (35) (35) (35) (35)
Change in Cash $78 $105 $122 $139 $158
Beginning Cash $145 $223 $328 $450 $589
Ending Cash 223 328 450 589 747
Metrics & Drivers
Free Cash Flow $113 $140 $157 $174 $193
Operating Profit 260 283 309 336 367
EBITDA 299 325 355 387 421
EBITDA Margin 33.1% 33.1% 33.1% 33.1% 33.1%
($ in Millions)

Moncler DuPont Ratios
2011 A 2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Profitability
Efficiency
Leverage
Debt Ratio - - 27.2% 19.4% 14.0% 10.2% 7.0% 4.3% 2.2%
Net Debt - - $176 $76 ($37) ($177) ($334) ($508) ($702)
Liquidity
Working Capital - - $80 $86 $107 $117 $127 $139 $151
DuPont Ratios
($ in Millions)

Tumi Income Statement
2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E
Revenue $330 $399 $467 $523 $555 $583 $606 $630
COGS 141 170 199 223 237 251 261 271
Gross Profit $189 $229 $269 $300 $317 $332 $345 $359
Operating Expenses 129 157 183 211 224 234 244 253
Operating Income $60 $72 $86 $89 $94 $98 $102 $106
Other Expense (Income) (1) (1) (0) (0) (0) (0) (0) (0)
Total Other Expenses $25 $8 $0 $0 $0 $0 ($0) ($0)
Earnings Before Taxes $36 $64 $86 $89 $94 $98 $102 $106
Corporate Taxes 19 27 32 32 34 36 37 39
Net Earnings $17 $37 $55 $56 $59 $62 $65 $67
Metrics & Drivers
% Revenue Growth 20.8% 17.3% 12.0% 6.0% 5.0% 4.0% 4.0%
% Gross Profit 57.3% 57.3% 57.5% 57.4% 57.2% 57.0% 57.0% 57.0%
% Net Margin 5.0% 9.2% 11.7% 10.8% 10.7% 10.7% 10.7% 10.7%

Tumi Balance Sheet
2012A 2013A 2014E 2015E 2016E 2017E 2018E
Cash and Cash Equivalents $37 $38 $77 $120 $166 $214 $264
Inventories 71 80 91 97 101 105 110
Total Current Assets $138 $162 $213 $264 $317 $371 $428
Net Property, Plant & and Equipment $47 $61 $72 $84 $96 $109 $122
Total Assets $469 $507 $569 $632 $697 $764 $833
Accounts Payable 57 71 77 82 86 90 93
Total Current Liabilities $57 $71 $77 $82 $86 $90 $93
Total Debt $45 $8 $7 $6 $4 $3 $2
Total Liabilities $158 $139 $144 $148 $151 $153 $155
Shareholders' Equity 311 368 424 484 546 611 678
Total Liabilities and Equity $469 $507 $569 $632 $697 $764 $833
check - - - - - - - - - - - - - -
Metrics & Drivers
Net Earnings $37 $55 $56 $59 $62 $65 $67
Cash Ratio 0.64 0.53 1.00 1.46 1.92 2.39 2.83
Return on Equity 11.8% 14.8% 13.3% 12.3% 11.4% 10.6% 9.9%
Net Debt $8 ($30) ($70) ($115) ($161) ($211) ($262)
ProjectedHistoricalBalance Sheet
($ in Millions)

Tumi Statement of Cash Flows
2014E 2015E 2016E 2017E 2018E
Net Earnings $56 $59 $62 $65 $67
Depreciation 17 18 19 19 20
Cash From Operating Activities $68 $74 $78 $81 $85
Change in Cash $39 $43 $46 $48 $50
Beginning Cash $38 $77 $120 $166 $214
Ending Cash 77 120 166 214 264
Metrics & Drivers
Free Cash Flow $40 $44 $47 $49 $51
Operating Profit 89 94 98 102 106
EBITDA 106 112 117 121 126
EBITDA Margin 20.2% 20.1% 20.0% 20.0% 20.0%
($ in Millions)

Tumi DuPont Ratios
2011 A 2012 A 2013 A 2014 E 2015 E 2016 E 2017 E 2018 E
Profitability
Efficiency
Leverage
Debt Ratio - - 9.6% 1.6% 1.2% 0.9% 0.6% 0.4% 0.2%
Net Debt - - $8 ($30) ($70) ($115) ($161) ($211) ($262)
Liquidity
Working Capital - - $45 $53 $58 $62 $65 $68 $70
($ in millions)
Historical ProjectedDuPont Ratios

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