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C OMBINED O RDINARY A ND E XTRAORDINARY S HAREHOLDERS’MEETING O N M AY 11, 2006 Chairman’s Message 2 Managing and Auditing Bodies 4 Simplified Organization Chart 5 Financial Highlights 6 Management Report of the Board of Directors 8 Report of the Chairman of the Board to the Shareholders’ Meeting 59 Consolidated Financial Statements 67 • Highlights 69 • Balance Sheet 70 • Income Statement 71 • Statement of Changes in Shareholders’ Equity 72 • Cash Flow Statement 73 • Notes to the Financial Statements 74 • Statutory Auditors’ Report 145 1 CHAIRMAN’S MESSAGE I am particularly pleased to speak to you, our loyal shareholders, at a time when the Christian Dior Group is breaking record after record. Year after year, you have demonstrated your support for the Group’s development policy and your vision as well as your patience are now being rewarded. The market price soared 50% in 2005 and is again rising at the beginning of 2006, as I write these lines. What is being recognized, I believe, is the quality of our business model, which delivers steady growth in our results. In 2005, the Christian Dior Group recorded the highest revenue and earnings in its history and we are projecting very substantial growth in profitability again in 2006. In 2005, the hundredth anniversary celebration of the birth of Christian Dior was an extraordinary success, demonstrating the unique brilliance of the brand. Both its rich history and tradition, combined with its dynamic appeal driven by the talents of our three designers, are the forces driving this unparalleled interest. Backed by its traditional values, which are only enhanced by its contemporary image, the Christian Dior brand is attracting new customers and becoming a leader worldwide, including the newest consumer countries like China and India. In mainland China, we have developed a network of twenty-five boutiques and are present in the best locations in most of the major cities. The company recorded a very significant percentage of its revenue in Asia, in a context of rapid growth and profitable expansion. This success has deep roots and is anchored in all our businesses, whether it is in the traditional segments like leather goods and ready-to-wear, or the newest ventures like menswear or jewelry. We recently opened a flagship boutique for men in Shanghai and the new jewelry collections, perceived as both innovative and exquisite by customers, have been very successful. The new store opened early in 2006 in New Delhi, India is another demonstration that Christian Dior never rests on its laurels. In addition to India, growth will continue in 2006 and will focus on regions with strong potential. The vitality of the brand can also be seen in all the product lines designed and developed by our designers. Ready-to-wear, leather goods and women’s footwear continue to record rapid 2 growth. Menswear continues to confirm its initial success, backed by an expanded line of new products and the opening of dedicated and specific points of sale, like the store opened in Shanghai earlier this year. Finally, our jewelry has earned an unqualified success. The creativity of our teams and the controlled expansion of our network drove the steady growth in revenue for Christian Dior in 2005, particularly in Asia, the United States and Europe. The performance of LVMH in 2005 met our expectations. Our revenue rose in all geographic regions. While the United States and Asia were the primary engines of that growth, Europe also contributed, despite a sluggish economic environment. In addition, all our business groups increased their profit from recurring operations, and the Group’s cash flow improved again. Last year was yet another demonstration of the power of our leading brands, which are profit models and the foundation of our success and again gained market share because of their exceptionally dynamic innovations. 2005 was also an illustration of our ability to gradually move the brands that carry our long- term ambitions toward the status of star brands. With the Group’s support, these brands are following their road map, step by step, and continue to confirm their potential. Fendi, the Italian star, is one of the companies that has made the most progress. Justifying our strong hopes and the investments we have made, it is highly attractive today, its revenue is growing rapidly and its results have improved significantly. All the elements are in place to accelerate its growth. In 2006, we will continue to reap the benefits of a number of developments last year and pursue our strategy focused on the growth of our flagship brands. We will maintain our efforts to develop the brands that represent our vectors for growth and we are accelerating the development of the brands that show the greatest potential. Despite the monetary uncertainties, the economic context is buoyant because of the growth in the world’s major economies and rapid expansion in the emerging countries. We will strengthen the presence of our brands in the major markets and continue to expand in new territories: the Asian countries that hold significant growth potential for luxury products, Russia, and the most advanced countries of Central and Eastern Europe with their developing economies… Innovation, the primary engine of our success, will continue to hold pride of place. Louis Vuitton will launch new and innovative leather goods. Among other initiatives, Dior plans to launch major skin care and make-up products, and Guerlain and Givenchy will introduce a new women’s perfume. TAG Heuer and Zenith will accelerate their innovations, and Dior Montres will capitalize on the huge success of its new Christal line, which will be expanded with new models. With confidence in our prospects, we have again in 2006 set an objective for very strong growth in our results. 3 M ANAGING A ND A UDITING B ODIES BOARD OF DIRECTORS PERFORMANCE AUDIT COMMITTEE Bernard ARNAULT Eric GUERLAIN Chairman Chairman Eric GUERLAIN (1)(2) Pierre GODE Vice-Chairman Christian de LABRIFFE Sidney TOLEDANO Chief Executive Officer Antoine BERNHEIM (1)(2) NOMINATING AND COMPENSATION COMMITTEE Denis DALIBOT (2) Alessandro VALLARINO GANCIA (3) Antoine BERNHEIM Chairman Pierre GODE Christian de LABRIFFE (2) Pierre GODE Jaime de MARICHALAR y SÁENZ de Eric GUERLAIN TEJADA (3) Raymond WIBAUX Raymond WIBAUX (1) Board Members EXECUTIVE MANAGEMENT STATUTORY AUDITORS ERNST & YOUNG AUDIT Sidney TOLEDANO represented by Christian MOUILLON Chief Executive Officer MAZARS & GUERARD represented by Denis GRISON (1) Independent Board Member. (2) Reelection proposed at the General Meeting on May 11, 2006. (3) Election proposed at the General Meeting on May 11, 2006. 4 S IMPLIFIED O RGANIZATION C HART ON D ECEMBER 31, 2005 * Listed company 5 F INANCIAL H IGHLIGHTS Consolidated revenue by business group (in millions of euros) 5% 5% Christian Dior Couture 663 Wines and Spirits 17% 18% 2644 Fashion and Leather Goods 4812 33% 33% Consolidated revenue by geographical area of destination Perfumes and Cosmetics (in millions of euros) 2285 16% 15% France 2282 Watches and Jewelry 16% 16% 573 4% 4% Selective Retailing Europe (excl. France) 3648 2954 25% 25% 20% 20% Other Activities and Eliminations United States 2004 2005 (69) 3805 26% 26% Consolidated revenue by currency Japan (in millions of euros) 2111 15% 14% Euro 4355 Asia (excl. Japan) 2412 16% 17% 32% 30% Other markets 7% 7% 992 US dollar 2004 2005 4561 31% 31% Yen 2152 15% 15% 4% 5% Pound sterling 666 3% 3% Hong Kong dollar 15% 16% 508 Other currencies 2314 2004 2005 6 F INANCIAL H IGHLIGHTS 2005 2004(1) (in millions of euros) Revenue by business group Christian Dior Couture 663 595 Wines and Spirits 2,644 2,259 Fashion and Leather Goods 4,812 4,366 Perfumes and Cosmetics 2,285 2,128 Watches and Jewelry 573 493 Selective Retailing 3,648 3,276 Other activities and eliminations (69) (57) Total 14,556 13,060 Percentage earned outside France 84% 84% Profit from recurring operations(1) 2,791 2,413 (in millions of euros) Net income – Group share 618 549 (in euros) Net income per share Net income – Group share 3.48 3.09 Net income – Group share after dilution 3.45 3.07 Dividend per share(2) 1.16 0.97 (in millions of euros) Total balance sheet 31,959 29,365 Average workforce 57,778 55,121 (1) Following restatement under IFRS of data previously published under French GAAP. (2) For financial year 2005, the amount proposed at the General Meeting on May 11, 2006. 7 M ANAGEMENT R EPORT O F T HE B OARD O F D IRECTORS Ladies and Gentlemen, This report summarizes the significant events affecting the life of the Christian Dior Group in 2005. We shall review in order the consolidated results, the situation by business group and your Company’s performance. I. CONSOLIDATED RESULTS In 2005, the Christian Dior Group recorded the highest level of revenue and profits in its history. All geographic areas in which the Group is present made progress, with a notable acceleration of growth in the United States, Asia and Europe. In this context, net income made strong progress and grew faster than revenue. Net revenue reached 14,556 million euros, up 11%; changes in the scope of consolidation and exchange rate variations had no impact on this growth. The Group’s profit from recurring operations was 2,791 million euros, up 16% over 2004. This growth, much higher than growth in revenue, was due to the increase in the gross margin and control of operating costs. The ratio of profit from recurring operations to revenue reached 19%, up one point over 2004. After accounting for other operating income and expenses, operating income was 2,565 million euros, which represents growth of 16%.

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