Ladies and gentlemen, good evening. I'm delighted to welcoming you for this meeting, presenting the Annual Results of 2016 at the risk of tiring you.

I'd like to say that the 2016 results, record results, you will no doubt have read the press release. Revenue for the first time has topped the $37 billion mark.

We have profit from operations that exceeds $7 billion, up 6%, net income is up 11% and free cash flow is also up at about $4 billion. And so the gearing has dropped to around 10%.

It's been a very good year, pretty mixed year on the whole. The first part of the year more restrained with the second part of the year displaying sharp acceleration.

I'd like to review the various business groups before giving you my views on the 2017, which is one of caution, and then I'll explain why. So 2016 wines and spirits, a good year, very good performance, and increase in the United States.

Recovery in China after some difficult years, the prestige cuvées and Champaign, delivered an excellent result. Moët & Chandon strengthening its global leadership position of Champaign.

We’re developing the Moët & Chandon brand across the world very dynamic. And we're also developing innovations in various areas for Champaign.

I won't go into all the details. Hennessy, of course, is very successful.

You mustn't expect Hennessy to continue too long, because we're out of bottles, so be cautious. The problem is to deliver the stocks are at an all time low, and so we're faced with that situation that may seem excellent, but is going to put a brake on the expansion of our business there.

But the strategy that we put in place with Mr. Navarre is bearing fruit, because we constantly create value, with always resistant in the most difficult times.

In China, we didn't cut prices but some of our peers did in order to continue to grow. We've never done that.

And we truly are market leader for wines and spirits premium. Over now to fashion and leather goods, of course leading brand is Louis Vuitton, that puts in an excellent performance with a slower start to the year, but a stronger growth in the second half of the year.

This growth is achieved throughout the world, thanks to innovation, thanks to extremely creative products and an exceptional organization, such that in a company, such as Vuitton, in spite of its sales that I won't disclose. We have one month of stock, which is a remarkable performance.

And I would like to say that we can't expect huge expansion, because we are constrained by manufacturing one month's stock, and then we have to make the products. We have to create workshops, even if we’re going to create a new workshop in the United States as we have announced, as well as if there’re problems of tariffs and duties, we’ll be able to bypass that.

But we have to train the people and the teams. The customer demand would allow us to do this.

But we need to buy that time there is no point in achieving too much growth. We have to do it in a consistent fashion, of course, during the year.

We achieved a number of successes with newer openings, at least store renovations [technical difficulty] seen the number of stores is reducing some. We’re increasing the sales per square meter and we are creating new store that are quite exceptional.

A few weeks ago, there was the opening of the renovated store in Hong Kong that are quite extraordinary. And there again, the sales -- perhaps not skyrocketing, but nevertheless, increasing shopping by the situation, thanks to their efficiency and the innovation displayed in these locations.

Other brands are also growing well, have grown well in 2016. Strong increase in Fendi, Loro Piana that’s opened a store at the end of right close by, and fortunately it’ll be closed at the end of this meeting.

But I urge you to take a look when you can. There is some very fine products there, especially with the cold weather.

There is some fine cashmere products available. Other brands making good progress; Céline of course Kenzo that’s been repositioned; Berluti there again, is achieving considerable success.

We’ve disposed of Donna Karan that wasn’t quite in line with our other brands where reorienting -- repositioning Marc Jacobs’. And we acquired a majority holding and Rimowa.

So we’re now majority shareholder of this fine German company of manufacture of high quality luggage of excellence with increased air travel. These are the lightest and most robust cases to be found on the market.

After those have returned, of course, but those have returned, not in the price range and they are most impossible to find. On Perfumes and Cosmetics here again many events, the prime event is that of our new creative studio at Grasse, les Fontaines Parfumées.

If you’re passing through Grasse, I invite you to visit this new facility, a lot of craftsman and artisans who are developing the Vuitton, and there are fragrances. So, Vuitton, I didn’t mentioned in the highlight, but launched its collection of fragrances last year that prompted considerable demand.

On Dior, that is the leading perfume brand. The success of the iconic line J’adore and Miss Dior continues.

Sauvage for men that we launched two years ago, has achieved success worldwide. Its number one in several country and one of the leading fragrances in the world.

And the goal that we set ourselves to be world number one will be achieved in two years time. We have a perfume brand held up well, notably Guerlain with the fragrance La Petite Robe Noire and also more iconic brands of makeup.

The new brands acquired and launched by Sephora and Kat Von D, Mr. Lapuente has presented the store, its full of this brand and its full of customers whereas we’re not making any advertising.

So, makeup is a good segment. Watches & Jewelry, its really all good news, perhaps you might find this rather tiresome, but Bvlgari has achieved the performance better than market.

And you can see on this, we’ve launched the new collection of Serpenti, the Bvlgari historic model that’s very successful, as well as the enhancement of the lines Diva or Lvcea, a women’s watch that works well. TAG Heuer, the watch market is down but TAG Heuer is up, thanks to the success of the Company.

On the [indiscernible], we’ve revamped the strategy with the iconic lines with a refocusing of the strategy on what is achieved the success of the brand. And also, thanks to the connected watch that is a big hit.

We’ve achieved growth in the watch segment. Likewise, for Hublot which for different reasons is continuing to grow.

And Chaumet is also achieving excellent momentum with a new concept saw inaugurated in Hong Kong, which I saw recently. That’s very successful selective retailing.

Pretty mixed performance, Sephora, continues to deliver surprising performance. I won’t give revenue, but it's growing strongly.

For several years now double-digit growth for Sephora and also profits, all that’s useful. We’re number one in the distributions of Perfumes and cosmetics in the United States, both in physical stores and online ahead of all our U.S.

peers, be it Macy’s first stores or Amazon. So, Amazon, the pretty much mass market products, not really our competitor, but there's huge potential with this company that's extremely dynamic, which not only is opening stores, selling and distributing products, but also taking majority holdings in brands that were developing very fast, thanks to the global network that toips the 2000 stores, now at '98.

Let me remind you, when we acquired the company, it had barely 10 stores. So that's a considerable success.

Not so great for DFS. Well, DFS is suffering from the situation in Hong Kong that made the mistake of taking a license in Hong Kong Airport that costs us a lot of money, that we're getting to pay that's stopping at the end of the year.

We'll exit next year, but it'll still impact on this year's results. And Hong Kong is one of the places in the world where the outlook is the most challenging.

And [indiscernible] achieved very useful results. So I invite you to visit the latest exhibition organized by Mr.

Wagner, that's attracting a lot of people that's quite exceptional. So much for the events of the year, and that explains why our results are what they are, that is very good.

In spite of all that and in spite of the fact that the year is beginning with green-light, so I'm very cautious about 2017. Why, it may sound strange.

Well, first of all, when everything is going well as it is, it's always in these times that something unexpected occurs, and that we have to be very vigilant. So I said to the teams, let's be vigilant in a period that may seem euphoric, and may encourage people to let our people congratulate each other.

The stores are full. We don’t know how we can meet demand, that's pretty much summary of the situation, and they tend to ease up.

But I believe we need to be extremely vigilant, because from experience every time we find ourselves in such a situation, the year ended not so well and why could that happen. First of all, for almost 10 years now, there hasn’t been a major crisis, the last one dates-back to 2008.

And when I see my friend Warren Buffet, he always tells me, I am very optimistic for the long-term. I am also very optimistic for long-term.

But over a 10 year period, normally, there are eight good years and two not so good years or even a very bad year. Now, we're coming to the end of the 10 year period.

So what’s going to happen when we see a global outlook with interest rates that had define gravity as low as they are with share prices that are rising with exuberance to quote a well known term with a geo-political situation that’s difficult to read, there's talk of a trade war, tariff war, currency war, with very low growth in Europe. So, can all that continue to be buoyant for all our business, I think we need to remain cautious, it's better to expect a first half that we will be relatively easy, because comparisons are easy 2016, the first half wasn’t that great, so this year should be okay.

Geo-political economic events that might unfold in a way, that isn’t particularly helpful. And the way the second half of 2016 was promising, we must expect things to far more difficult in the second half of the year.

So, this year, and I conveyed this to my teams, I’ve conveyed to them, a message of great cautions. In spite of the results and the excellence of the figures that were presented, it doesn’t, only have disadvantages, difficult situation, because these are periods when we can seize on opportunities, currently shows at very high.

So people continue to buy. But when share price drops, that’s when they tend to sell that they lay down their arms.

But the few years later, it picks up perhaps during this year or next year. There will be opportunities for the Group, because it's true that it's in more challenging times.

I’ve noticed that we’ve always managed to increase our market share, and to outperform our peers. But one never knows.

We really need to be prudent. But I believe, nevertheless, we will strengthen our lead over the market this year.

Over now to Jean-Jacques Guiony for more information on the financials.

Good evening. I don’t want you to get depressed.

If you look at the figures for last year, they are pretty outstanding, especially looking at sales. The numbers here, you have sales on a quarterly basis, there’s lots of numbers on this.

There were two things you have note. Organic growth over the year was 4% in Q1, that’s the dark blue, 6% in Q2 and 8% in Q4 and overall organic growth was 6%.

And then if you look at the ForEx and the structures, they are almost negligible compensate one another, so organic growth is fact not very different from growth in euro terms. If you look at distribution of sales, three big blocks U.S., Europe, Asia 26%, 28% for each over a three period.

Asia has done to 2-3 points, and the U.S. is up 2-3 points.

There is some apache effect differential growth rates but all-in-all same numbers. And if you look at the dynamics of growth, you can see if you look at four major regions, three are up U.S., Asia and Europe, and one region, which suffered the backlash of some events.

Japan did well with tourists until March or April were upon the yen went up and the Chinese authorities, the customs authorities, were much more restrictive as to the imports of goods imported from Japan into China. And so that of course hampered our growth in Japan.

And so the numbers are stable or indeed slightly down, that’s the only dark point. If you look at the U.S., we’re looking at 7% growth, accelerating at the year-end and yes you had some negative effects.

The consolidation of joint venture that we had with [indiscernible] and that we had to dispose off. And then the negative effect of Donna Karan, because Donna Karan month-on-month, during the transition period had negative performances.

They should leave that out. And so, these are one-offs, of course.

We were looking at upwards of 10% for the period as a whole. So, that’s pretty good.

Asia is interesting, because you were looking at 5% growth for the year as a whole. But if you look at H1 0 and H2 is 10, so there was -- in June-July, there was a complete turnaround in Asia, and this actually occurred also in China indeed in greater numbers, because if I think China was like 14% growth.

Likewise, H1 was say average, where the H2 was much, much better. And finally, Europe at 7% growth, and I don’t think anyone in this room at the same period last year would have bet on that 7% growth in Europe.

And France was slightly down, I think, minus one -- slightly negative in all the other countries as well. And there was indeed business really picked-up at the end of the year.

Now, looking at our various business groups in organic growth and of course Mr. Arnault mentioned this already.

But if you look at the right-hand column, you have for wines and spirits we’re looking at this 7% organic growth, slightly better for Cognac. But if you at look Cognac, specifically, even better, slightly better than Champaign.

But look both numbers are very good. Fashion and leather goods, up 4% but it was 0% in H1 and 8% or 9% in H2.

So, a significant contrast even though the Donna Karan costs us 2 or 2.5 points of negative growth in these numbers. Perfumes and Cosmetics 8%, and this is an environmental growth is not as good as all that.

So, we’re doing extremely well. Watches & Jewelry, 5% with the Bvlgari ending the year beautifully and TAG Heuer did well throughout the year, and then their contrasting figure in selective retailing, Sephora double-digit growth and DFS was a negative territory throughout the year, even though it picked up slightly at the end of the year, but for reasons that you already know.

Now then, this time looking at each, while even on the quarterly basis looking at business groups. You have the dynamics, wines and spirits 4% in Q3 and of course compared with 2015, the basis of comparison was somewhat distorted, fashion and leather goods, the same effect that I mentioned.

H1 was flat literally. But of course the pick-up in H2 Perfumes and Cosmetics and Watches & Jewelry and selective retailing got few swings.

But by enlarge sustained activity. And you can see that selective retailing went up, but the numbers are not due to Sephora, but for DFS that was able to turnaround at the end of the year.

If you look at the income statement, sales up 5% and gross margin up 6% at 24% compared to 23.1% last year. Overheads and marketing expense is up 6%.

Overheard -- administrative expense is up 10%. Now we have new accounting rules.

The additional positions and indeed most business groups completed their accounts with significant provisions out of caution that are not including the provisions of course. There wouldn't be such an increase in admin and overhead.

We're looking at $7 billion in profits from recurring operations, up 6%, I think we're looking at 18.7%. If you look at the other income and operating expenses, slightly less than last year, but you have depreciation, and there are some goodwill amortization.

And then the capital gain on Donna Karan is about $14 million, and it is recognized here. The financial results and this is complicated, I’ll return to that later.

Income tax is always too high, 2.8% of the income before tax. The net income is stable, and the minority interest is down, not because of Moët & C, because Moët & C did well, but because of DFS whose performance was down.

And this is reflected in the minority interest. And finally, we are just under $4 billion in the actual net group income, group share of net profit, but still up 11%.

Now if you look at profit from returning operations by business group, wines and spirits up 10% where sales volume up 5%, so profit margin was significantly increased in wines and spirits, and this is particularly visible for Champaign and Cognac. Fashion and leather goods 3%, about 3% increase in sales and 10% in profit, so again profit margin significantly up and a dramatic improvement in H2.

Perfumes and Cosmetics and Watches & Jewelry, if you look at sales and operating profits, they increased to the same tune. But selective retailing, the minus 2% is not due to step of the DFS whose performances declined over the year, even they did picked up at the end.

And then finally if you look at the effects are mostly due to organic growth. How to account for the increase in profit?

Most of this is organic growth, which was roughly equivalent, both in sales and profits. Even though that indicator for organic growth is not really the one we would choose.

The currency effect is limited compared to say with last year. The change in net financial income, now it's always a complicated story, we start with the simple line which is the cost of net financial debt, which is roughly stable.

There were little by way of interest or debt outstanding, but there was a -- well, our cash is not bringing in as much so because the interest was down, but that doesn’t make much difference. The net ineffective portion of foreign currency hedges, and that's what we do to cover our position.

There were significant one-off costs last year, which we do not have this year. So the $330 million is a recurring expense, but it is exceptionally high because normally it should be somewhere like 160-170.

The return part of this charge was much less last year, and it should be much less next year. As you know, it is not a linear, [indiscernible] should allow for linear recognition of these currency hedges.

The cost of the ineffective portions, that is the cost of these hedges 2017, we recognize more in 2016 than the actual cost that was disbursed, which is of course absurd, both in accounting terms and in economic terms. We’ll fall back on our feet next year, but of course it’s just as absurd.

The net gains or losses due to the disposal of assets; well, of course, we didn’t have any capital gains last year -- well, this year that we had last year and so hence the difference. Now, if you look at our balance sheet, equity is about half, our liabilities -- we have some increase in stocks.

We have some financial structure, and we have undrawn credit lines to the tune of $3.4 billion, so, that’s $7 billion indeed. Cash flow is also a source satisfaction.

Let's look at our cash from operations, up almost $800 million at $8.7 billion. Working capital requirements is mostly stock changes, maintain through almost the same level as last year.

It costs us $400 million last year, now $500 this year, but we’re looking at the same numbers. Operating investments slightly up we’re looking at $2.2 billion compared with $1 billion.

We’re just under $2 billion last year. All-in-all, the free cash flow stands at roughly just under $4 billion, just under, but it's almost $4 billion there.

And so this is a significant improve compared with last year, and along with sales and profits from the current options, this was a record year. Now, if you look at the debt position.

Well, this is in dark blue. Debt stood at $4.2 billion, now it stands at $3.2 billion that is down $1 billion.

There was $4 billion in cash flow, $2.2 billion of dividends, $200 million for acquisitions, $300 million for the buyback of shares, and $2 million or $3 million in various operations, leasing adjustments, or monitory adjustments. All-in-all, we were able to reduce the debts to the tune of €1 billion and gain stands at 12% debt to equity, so this is a low number.

And finally, we’re offering a dividend. What we’ll be offering is €4 per action, up 13% and this is nine with the net results of €4 [technical difficulty].

We’ve picked out 1.4 in December, so the final payout will be 2.6, paid in April. Thank you.

Well, ladies and gentlemen, if you have any questions, we’re available to answer you. If you’d kindly state your name before your question, thank you.

[30.56] and HSBC, three questions. You mentioned the Unites States where the number of constraints, board attacks.

So, what's the percentage of your business achieved, for example, in fashion and leather goods, in your factories in California. Jean-Jacques Guiony, said that the tax rate was too high, Mr.

Trump might perhaps, give you a helping hand on that front. Second question on, cognac, there was probably a difference between the capacity constraints that you mentioned and the sell-out.

Could we have some feedback from the Chinese New Year? And how do you plan to address these problems of supply, and might that lead to a couple of quarters to distributors that would be lower than to the end users.

And in terms of your use of cash, you made an acquisition remember perhaps you could tell us a bit more about that. Could you confirm that you’ve also taken 10% in the Italian company equally?

And why and as to share buyback 300 million is that a beginning and might to become recurring in the coming years?

So, for the U.S., I would say U.S. is the world’s leading market.

So, obviously for us it’s a very important to follow what’s happening. Currently, the market is very promising very buoyant.

The atmosphere has not euphoric, but almost you see that the stock market has what the top 20,000 mark in the Dow Jones for the first time. That’s historic is all about going to continue.

Well, I have to say that the measure that have been announced, tax cuts easing regulation and investments and infrastructure, I mean all that’s pretty promising for companies that are in the United States. So, we for the time being have little manufacturing in the United States of 25 years of Vuitton.

What off as certain and our manifest advantage, if border taxes were to increase obviously the products manufactured in the United States is no problem. So, I don’t have the exact figure, but a large part of Vuitton products sold in the United States and made in the United States.

We’re really quite immune there for the other products we’ll see what happens. But there again we do have some flexibility on the prices.

Most important is to see what’s going to be global impact of changes underway change an economic policy which for the time being its very well perceived in the United States, the far more positive and negative points, I mean the changes in Europe with Brexit their again for the time being. In terms of the way our business goes in the UK, it’s pretty promising, everything is cheaper for visitors when they go to the UK, except for Vuitton products, but when they go to the UK, they have cheaper hotel rooms, cheaper taxis et cetera.

So they travel far more to the UK perhaps into less to the France. But they travel lot to the UK.

So, it ultimately likely poorest state of the Britain’s following Brexit will be such that it's going to create political and economic problems in the UK that needs to be seen and its we'll see into two years. I mean it’s very long period of time for the politics many particular country, it's impossible to say what will happen exactly.

But for the economy, there are a number of uncertainties what’s going to happen with China. Well, there'll be a battle on custom tariffs with China.

Will China be more difficult to access? The Chinese President gave a speech endeavors and praising free trade, but one never knows.

That's why we believe we need to be cautious as regards the development of our business this year with what's more we need to -- you mentioned Cognac. Well, Cognac sales might decline I mean if we don't have enough Cognac we can't invent it unless Mr.

Navarre does miracles but once we've exhausted the stock we'll have to rebuild the inventory, but currently demand is outstripping supply, I don't know what that will lead to but we're faced with that reality. On the cash front, so okay the acquisition of Rimowa right, we sold Donna Karan and we bought Rimowa, it’s a profitable business it has a lot of potential, it's one of the finest SMEs in Germany ranked as such in all the corporate rankings for Germany, outstanding German quality and we believe it has great potential and this currently strong demand for the products in fact today I invite you to visit the store just opposite the Bristol Hotel in Paris that's quite outstanding.

You'll find these cases that we’re also sell in the United States. Maccara, I won't make any comments about that, I won't tell you what we're doing, in any event whatever we do I mean it's a small operation as regards the cash, on the cash front we need to be prudent with cash, it’s better to have some than not to have any currently we're in a rather strange period.

We're being lent money and we're being paid to borrow money at negative rates which can encourage people to do very silly things with them with Mr. Guiony we're trying not yield to temptations, we bought back a few shares but they're too expensive now, so we won't be doing any more share buybacks, they're too expensive, I’d rather wait, I mean if the market collapses than at that point we'll buy back some more shares, but once again one never knows.

There are investments totally abnormal that were done I mean I took part in 2007 just before the crisis, no one predicted that as you recall, and then I recall that I bought LVMH shares of €40, it’s not that long ago. I'm not saying that we can hope for that, but it's best to wait, any further questions.

Thank you. It's John Guy from MainFirst.

Can I start with CapEx and returns question for Jean-Jacques please. In 2011 I think you had a CapEx as a percentage of sales over 7%, you've been normalizing closer to 5% your free cash flow continues to slow rocket and the gearing is very low.

So when you think about the prospects for future returns can you maybe give us some indications to where you think normalized CapEx and what we can for sustainable rates, return on invested capital going forward? My second question is with regards to global Chinese consumer.

We saw a very sharp rebound in global Chinese consumption in the third quarter. Could you maybe talk a little bit about how the Chinese -- global Chinese consumer evolved in the fourth quarter?

And finally to Mr. Arnault with regards to Cognac and Louis Vuitton capacity constraints, how do you think about pricing or the volume and value mix going forward?

I did notice that in the UK, we saw some pretty strong pricing activity. But the volumes remain very strong to that testament to the brand equity and to that clearly the desirability of your products.

So how do you think about that going forward? Thank you.

Regarding CapEx you've mentioned 5% and 5% is sort of the ratio of CapEx to sell. It's an objective.

I don’t mean all sale or all brands would the same. Some brands need to spend more on CapEx because that is to start brand that you need to do this to show better return on the brand.

And so we have high CapEx, but other brands as well. So we are looking, I mean what we are aiming for, but it's not a natural a stable object, we are looking but we are aiming for 5%, but they are exceptions to that.

And we can -- that can lead to returns, well that is return on capital was slightly in the year 2012, '13, '14, but now returns on capital invested is on the up, although it's not the -- it hasn’t increased that dramatically.

You had a second question on a 7 rebound in Chinese assumptions. What we have found was that while Chinese customers were, have always been loyal, but what happened in H2.

Well, Q3 and of course it's accelerating in Q4. What you had is repatriation of Chinese consumptions towards Mainland China.

And we have, if you look at the main malls in China, they were expecting single digit growth into December. And now they are into double digit territory, and of course the brands were better position brands are doing better and as Jean-Jacque pointed out, it's a party to do where the currency been also.

The Chinese deferential is not a significant as it was in the past. But also the Chinese authorities want to repatriate consumption that is the one depot to consumer's home than buying from the both.

Chinese New Year is still underway, and I don’t think we could look at the events now, as the continuation of Q3 and Q4. Regarding the stocks of Cognac and Vuitton where we can always hike up the prices, but the profit margins are pretty good as it is, we also have some responsibility vis-a-vis our customers.

We now find ourselves in a situation that there is more demand and can reach it, but I think the thing to do is that responsibly and preserve are the future rather than hike up the prices in a short term and find ourselves in a position which not going to be neither tenable nor ethical vis-a-vis our customers. And so there maybe situations where revenue may not be as buoyant as one might ask, but so be it we will survive.

We will make to with that.

Yes.

Good evening, Luca Solca from BNP. I have a question about fashion and leather good.

It has been sometime that you find with yourself in disposition with Mark Jacobs, well in the same position with Mark Jacobs is there any changes under foot. And on the digital sales, I mean will that -- will there be a point where you will be able to sale online to reconcile this with sales in shops.

Do you have any ambitions for e-commerce? And Mr.

Guiony, I believe that you're in encounter with the U.S. President hasn’t reassured you vis-a-vis, the situation.

Would you care to comment on that?

Well, I’m concern about Mark Jacobs than the US President. Well, I mean he can, I don’t think he can do much about the U.S.

policies, but of course Mark Jacob is a challenging situation Mr. Hussein [ph] is working on that.

That’s the only business which is in the red. We will pull out I’m sure but in the fashion industry you have to be cautious that the things are volatile and indeed that Vuitton as the same, you have to -- you do not want to turn this company into a fashion company, because when since you’re out of fashion than you’ve had it.

Vuitton is a timeless this company, it’s a company where we have this sort of time of robustness just like watches. I’m not saying that our fashion goods are accessories, but whereas the Mark Jacobs, Mark Jacobs is daily a much fashion business.

And so when things are in fashion fine and when they go out of fashion not so fine. Regarding sales on the Internet, yes, Mr.

Biloni, well we have been looking at the issue of digital sales than of course all companies are very much concern with that the digital as I mentioned of course you can’t just go online, you need to have infrastructure, you need to have the talents, you have the databases, you have all the work with all for to be able to offer a satisfactory digital experience. Our customers have been doing this and on our sales on the Internet are significantly looking at about 2 billion.

And significantly, and growing significantly, some brands are better than others. So, we can be happy with the digital transition or at least we can see that in all groups, the digital, we have been making significant digital inroads.

It's not just a matter of piling up sales. We have to offer an integrated experience so that our customer is fully supported.

Now regarding American policies, I may have sounded concerned, as things stand now the policies are in our favor. I read a paper and the Daily Telegraph saying that the new U.S.

President is very much criticized, and this has always been the case. But there's the question mark, what if it worked?

What if you haven't read that paper? But these things, it could just work.

And indeed some of the measures taking by Mr. Trump, lowering taxes, the deregulating, increasing or giving a push to major infrastructure projects, all this is positive stuff.

Now most people appointed at least for the positions to do with the economy. They are highly trained professional, people from the banking industry having a good banker working in the financial sector well that can only be good news.

If I may, the first one on pricing, your cautious outlook for 2017 which price increase do you expect for businesses like Vuitton that in the past year took a lot of organic growth from pricing? The second one always linked to your cautious attitude for 2017 is about divestor.

You are a fantastic collector of brands. Last year, you surprised us by selling one of them, but it is not very common in the house of LVMH.

Should we expect approval for your assessment for the various businesses that you have and further divestures? The last question is always linked to your cautious attitude for 2017, and this is about the agility of the organization.

You work in a business with a lot of fixed cost, which are the changes that you're asking to your management team to be more agile? And how do you want LVMH react in the next year?

Thank you.

Well, on prices I mean I believe I've already answered, I think we have great elasticity. We're already expensive and we have excellent profitability.

So we have a responsibility, I won't say social, but at least moral vis-à-vis our customers to really set the right price. And when we see the result of the group, the results of Louis Vuitton, the Cognacs, since the question was asked.

I don't think it would be appropriate for the short-term benefit for additional short term profit to give oneself an image that would not be consistent with the general ethics of the Group. Disposals, okay, that's really at the margin.

I mean these disposals that we made were praised the small companies that didn't necessarily have an assured future in the group so rather minor small disposals. There will be just the small disposals nothing significant.

As per the cost base, well, yes, I mean the cost base. We are constantly striving to make it more variable.

But you must realize that in an organized group, teams must be organized. They must have good morale.

They must grow and for that we have to have teams that are very different, I mean from start ups. I mean we have also start ups.

But in a company such as Louis Vuitton, wines and spirits will now set for -- it's necessary for the smooth functioning of these large companies, companies whose revenue exceed several billion euros to have an organization that operates. And that operates whatever the ups and downs of the market.

It doesn’t mean that these organizations must not be agile, mobile and highly entrepreneurial. And I believe the teams in the group have two characteristics as I often say.

First of all they must have an entrepreneurial spirit and be aware that they are in a family business, that’s very important because a company such as LVMH is not an anonymous company. It's a company where there is a family atmosphere.

In addition to the fact that the family controls the business, we try and manage the various brands like a family brands. It's about who has it.

We don’t consider that he is the only owner of Vuitton, manages at such. Mr.

Toledano, Mr. Toledano has been there for some time.

Now he is Mr. Joe and in fact he could design the dresses.

I mean he is already designing the bags, which is pretty good. And so we convey this highly entrepreneurial spirit, but also very family oriented, we are in a family, we are not anonymous with mass market machines, I mean some have come from there.

And who the family and who fitted into the family very well and become one of the pillars for the family, but it's another mind set, it's the family entrepreneur, their company is still small, I say that we are really at the beginning often say. Everything remains to be done.

Couple of questions and because then it will be time for drinks.

Let me talk about Italy. What are your intensions with the staff, I believe you have licenses and then with selling and with marketing.

I know you won't to tell us more, but did you propose to take another supplier or what you propose to do?

Look we do have a strategy. I cannot tell what it is.

So, it will be a surprise and you will find out sometime this year that sales still things are being finalized as we speak. So, I mean we’ll not be able to give you a premature answer, but things will be all right.

So, final question then. Final question.

Thank you. [indiscernible] I have a single question, you have decided to buy to acquire Rimowa, Rimowa, you have purchase this operation in gas and did you have in Russia.

So, I believe -- you are reaching out to the middle class aren’t you. Is this to say that you are hoping to reach out the new markets and what are your expectations in terms of volumes?

And also do you believe that by digging the middle class a set of way to access your brands, you can also unchanged and make brands that were out of their reach make them able to reach them?

Well, that’s exactly right. We and for many of our brands look at Dior, Dior is the largest, is the greatest haute couture company in the world, and it was branded fashion show last week.

And you can purchase very expensive dresses, but you can also purchase lipsticks worth of €30. So, that brand has the dream or carries the dream of the extreme luxury, but you can also, it can also be affordable.

We are not just selling to a close, a restricted, elite. We are reaching out to the general public and through that -- through our products you have access to the creativity of the whole event will Louis Vuitton we have a remarkable products that we sold the custom made hampers whose average purchase was €10,000.

We sold 100s of them. And it takes, the waiting list is six months, you can’t just pick them up off the shelf.

So, you have this €10,000 hampers, but you can also get a buy of bottle of perfume for no more than €200. And that quite with these suitcases that you can procure in Germany in terms of value for money.

In terms of value for money, well they are certainly very good value indeed. There is a lady at the back of the room.

I have in fact two questions. Number one, you said that in 2017 you told your teams to be cautious and I would like to know whether this means you will impose more stringent criteria in terms of the profitability and might this make more difference next year?

I mean there's innovation in various brands, but are there are areas where you have to be particularly careful or where you will be more demanding in terms of profitability? And other point last time you said you were not satisfied with the financial flexibility of the Company because of our volatile interest rates.

You've reduced it by a billion euros would that be in any interest to you to broaden the group structure and scope so as to have more flexibility because you said there would be attractive opportunities this year or next year?

Well, on that I mean it's difficult to answer you because even if we had a plan which isn't the case we couldn’t we wouldn’t be able to disclose it, I mean it's very difficult as I said earlier interest rates so low that one can find money very readily but once again one needs to be able to invest it wisely. So I'm really waiting for a turnaround in the market, it's necessarily going to happen, I mean I don't say it's going to happen in 2017, but it happened in 2018 but it's necessarily going to happen with this ecstatic exuberance which was not short lived at least but I mean I don’t see it lasting for several years.

On the profitability criteria we always have profitability criteria for our business but what matters most and this what we're discussing the most, the criteria of quality and image of the brand over the long term, when you're managing a company every morning asking yourself whether in 10 years time we'll still be the market leader as Vuitton is today the finest luxury brand in the world, although separate the best retailer of products in the world, what must we do today to continue driving forward the quality of manufacturing and motivation of the teams and then profitability follows, it's not an objective because when you start setting targets from profitability then it's really addressing the problem from the wrong angle, profitability really stems from the sound, good management of the brand equity and the quality of the products. Thank you very much.

We invite you to go next door for refreshments.