Watches Of Switzerland Group Plc · LSE:WOSG
Watches Of Switzerland — H1 FY24 Earnings Presentation
34 slides from Watches Of Switzerland's earnings presentation, Dec 7, 2023
Slide 1: The Watches of Switzerland Group H1 FY24 Results
The Watches of Switzerland Group H1 FY24 Results December 2023 26 weeks ended 29 October 2023
Slide 2: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements This presentation has been prepared by Watches of Switzerland Group PLC (the “Company”). It includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the us
Slide 3: Agenda
Agenda CEO Introduction and Overview H1 Strategic Activity and Pipeline Financials 30% 29% 22% 26% 28% Long Range Plan 24% Anders Romberg 25% Brian Duffy 20% 23% Chief Financial Officer Chief Executive Officer Summary Q&A The Watches of Switzerland Group H1 FY24 Results, December 2023 3
Slide 4: Good first half performance, well set for H2
Good first half performance, well set for H2 Group revenue £761m, +2% in constant currency vs H1 FY23, flat at reported rates Strong US revenue growth at +11% constant currency Adjusted EBITDA £94m: -8% in constant currency -10% reported vs H1 FY23 Adjusted EBIT £73m: margin 9.6% -170bps vs H1 FY23
Slide 5: WOSG US sales contribution continues to grow
WOSG US sales contribution continues to grow Revenue mix by market 24% 42% 43% FY19 FY23 H1 FY24 58% 57% UK and Europe 76% US Revenue mix by customer segment 4% 5% 12% 21% FY19 FY23 H1 FY24 Domestic UK/EU/US Tourism 67% Airports 96% 95% The Watches of Switzerland Group H1 FY24 Results, December 2023
Slide 6: Acquisition of Ernest Jones luxury showrooms
Acquisition of Ernest Jones luxury showrooms • Part of Signet Group • Continued distribution of luxury watches Completed November 2023: • Ernest Jones luxury showrooms • Detailed integration plan in place The Watches of Switzerland Group H1 FY24 Results, December 2023 6
Slide 7: Significant pre-owned Luxury watch opportunity
Significant pre-owned Luxury watch opportunity US July 2023: Launched online and in 7 showrooms, now in 14 showrooms UK September 2023: Launched online and in 5 showrooms, now in 10 showrooms The Watches of Switzerland Group H1 FY24 Results, December 2023 7
Slide 8: Significant showroom investment
Significant showroom investment UK and Europe • Seven new showrooms in the UK (one multi-brand, six mono-brand boutiques) • Three new showrooms in Europe including first store in Germany • Six showroom transformations in H1 including our first new concept Mappin & Webb • Five further showrooms re-op
Slide 9: Goldsmiths luxury elevation – Liverpool, opened September 23
Goldsmiths luxury elevation – Liverpool, opened September 23 The Watches of Switzerland Group H1 FY24 Results, December 2023 9
Slide 10: Rolex mono-brand boutique – Orlando Florida
Rolex mono-brand boutique – Orlando Florida, opened 9th November 23 The Watches of Switzerland Group H1 FY24 Results, December 2023 10
Slide 11: Rolex expansion – Goldsmiths and Mappin & Webb
Rolex expansion – Goldsmiths and Mappin & Webb Goldsmiths Bullring, Birmingham, Opened November 23 Goldsmiths Metrocentre, Newcastle, Opening December 23 Goldsmiths Trafford, Manchester, Opened December 23 Mappin & Webb Bluewater, Kent, Opening December 23 The Watches of Switzerland Group H1 FY24 Re
Slide 12: One Vanderbilt, Madison Avenue, NY, opening February 2024
One Vanderbilt, Madison Avenue, NY, opening February 2024 The Watches of Switzerland Group H1 FY24 Results, December 2023 12
Slide 13: Mappin & Webb Luxury Jewellery Boutique - Manchester
Mappin & Webb Luxury Jewellery Boutique - Manchester The House of Luxury Jewellery Brands The Watches of Switzerland Group H1 FY24 Results, December 2023 13
Slide 14: Mall of Netherlands
Mall of Netherlands The Watches of Switzerland Group H1 FY24 Results, December 2023 14
Slide 15: Ecommerce
Ecommerce • Ecommerce -3% for H1 against tough comparatives and impacted by a higher participation of Jewellery • Continued investment in the client journey • Growth of Virtual Boutique in UK and US offering clients support and product expertise • Strong partnership with Google driving insight and u
Slide 16: Financials
Financials Anders Romberg, Chief Financial Officer
Slide 17: Income statement key highlights
Income statement key highlights Income Statement (£m) H1 FY24 H1 FY23 YoY % Income Statement presented pre-IFRS 16 and pre-exceptional items Revenue 761 765 - • Revenue flat on prior year, up +2% in constant currency Net margin 280 288 (3) • UK and Europe -4% impacted by timing of product intake in
Slide 18: Product mix and IFC key driver of EBIT reduction
Product mix and IFC key driver of EBIT reduction The Watches of Switzerland Group H1 FY24 Results, December 2023 18
Slide 19: Balance sheet strength
Balance sheet strength Balance Sheet (£m) H1 FY24 H1 FY23 % FY23 Goodwill & intangibles 203 206 (1) 200 • Continued investment with £48 million of expansionary capex (H1 FY23: £27 million) PP&E 186 137 36 154 • Inventory levels +£20 million (+5%) driven by new showrooms Right-of-use assets 403 353 1
Slide 20: Strong free cash flow conversion
Strong free cash flow conversion Cash flow H1 FY24 H1 FY23 YoY % Adjusted EBITDA 94 104 Working capital (8) (27) Tax (23) (20) Other 1 3 Free cash flow of £57 million; 60% free cash flow conversion Cash generated from 64 60 7 • Working capital tightly managed operating activities Maintenance capex (
Slide 21: FY24 guidance reiterated
FY24 guidance reiterated FY24 guidance (pre-IFRS 16) FY24 guidance reflects: Revenue £1.65 - £1.70 billion • Visibility of supply of key brands, announced pricing, and confirmed showroom refurbishments, openings and closures Revenue growth at constant 8-11% • No uncommitted acquisitions currency Adj
Slide 22: Long Range Plan
r in tains mig ip ‘| 7 oe YQ THE WATCHES Or SWITZERLAND GROUP Long Range Plan GOLDSMITHS MAYORS
Slide 23: Showroom investment
Showroom investment Showroom investment in existing portfolio Pre-Owned Luxury branded jewellery Ecommerce Ernest Jones showroom acquisition Acquisitions US / Europe New projects UK / US / Europe The Watches of Switzerland Group H1 FY24 Results, December 2023 23
Slide 24: Showroom investment
Showroom investment The Watches of Switzerland Group H1 FY24 Results, December 2023 24
Slide 25: Rolex Certified Pre-Owned and Analog shift/Certified Pre-Owned
Rolex Certified Pre-Owned and Analog shift/Certified Pre-Owned Watches of Switzerland Group Pre-Owned Rolex Certified Pre-Owned Analog:Shift / Certified Pre-Owned UK US UK US The Watches of Switzerland Group H1 FY24 Results, December 2023 25
Slide 26: A major focus on the underdeveloped luxury branded jewellery market
A major focus on the underdeveloped luxury branded jewellery market The Watches of Switzerland Group H1 FY24 Results, December 2023 26
Slide 27: E Commerce
E Commerce The Watches of Switzerland Group H1 FY24 Results, December 2023 27
Slide 28: Acquisitions and new projects
Acquisitions and new projects The Watches of Switzerland Group H1 FY24 Results, December 2023 28
Slide 29: Financials
Financials Market WOS CAGR WOSG growth FY20-23 FY23-28 UK 15% 8-10% US 40% 20-25% Europe 4-6% group sales • UK CAGR of 8-10% consisting of market growth and benefits from capital investment, pre-owned, investment in branded Jewellery, Ernest Jones showroom acquisition, mono-brand productivity and ec
Slide 30: Investment to Support Growth Plans
Investment to Support Growth Plans Indicative Range of Cumulative Capex Spend FY24 to FY28 (£m) Indicative Range of Acquisition and New Project Spend FY24 to FY28 (£m) 400 550 500 350 500 350 450 300 400 350 300 350 300 250 250 200 200 150 150 100 The Watches of Switzerland Group H1 FY24 Results, De
Slide 31: The sales plan growth matrix
The sales plan growth matrix Luxury Ernest Showroom Jones Acquisitions / Ecomm CPO branded investment jewellery acquisition new projects Sales CAGRs US +20/25% US US UK +8/10% US US Europe 4/6%* US (* group sales) UK +50-150 bps profitability UK UK UK UK 65-70% free cash flow conversion Europe Europ
Slide 32: Closing Comments
Closing Comments
Slide 33: Conclusions
Conclusions WOS proven model continues to drive sales growth and market share gains We continue with our investment led growth strategies UK/US/Europe with a strong pipeline of projects Completed acquisition of Ernest Jones luxury showrooms Successful launch of Rolex Certified Pre-Owned Full year ex
Slide 34: Q&A
Q&A
Watches of Switzerland Group — H1 FY24 Earnings Presentation on 6ix