Watches Of Switzerland Group Plc · LSE:WOSG
Watches Of Switzerland — The Watches of Switzerland Group — FY2023 Earnings Presentation
60 slides from Watches Of Switzerland's earnings presentation, July 2023
Slide 1: FY23 Results
The Watches of Switzerland Group FY23 Results July 2023 52 weeks ended 30 April 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 Update Brian Duffy Chief Executive Officer UK & Europe Craig Bolton President UK & Europe US David Hurley President North America & Deputy CEO Financial Review & Outlook Anders Romberg Chief Financial Officer Q&A American Dream, New Jersey – Opened May 2023 The Watches of Switzerland Grou
Slide 4: A Year of Record Performance
A Year of Record Performance Record Revenue achieved Group Revenue +25% vs FY22 at reported rates Adjusted EBIT £165m: +27% vs FY22 Adjusted EBIT margin 10.7%: +20bps vs FY22 ROCE 27.9%: +50bps vs FY22 28 showrooms opened across the UK, US and Europe Upgraded a further 13 showrooms with the rollout
Slide 5: CEO Update
The Watches of Switzerland Group CEO Update Brian Duffy - CEO
Slide 6: Luxury Watch Market remains strong after a period of exceptional growth
Luxury Watch Market remains strong after a period of exceptional growth Swiss watch exports (wristwatches +500 CHF) Jan to May 2023 40% 37% 35% 31% 30% 25% 24% 20% 15% 12% 10% 8% 8% 5% 0% US UK EU 2023 vs 2022 2022 vs 2021 Source: Swiss Watch Federation The Watches of Switzerland Group FY23 Results,
Slide 7: Luxury Jewellery Market resilient after a period of exceptional growth
Luxury Jewellery Market resilient after a period of exceptional growth Jewellery Demand per Capita (US$) 30 • Resilient category 25 • Trend towards branded Jewellery 20 • Strong growth across North America 15 • Moderate growth in UK and EU 10 • Bridal makes up a significant part of the 5 market - 20
Slide 8: Another year of record sales and profitability
Another year of record sales and profitability Adjusted EBIT* (£m) and Adjusted EBIT Revenue (£m) margin % 200 12.0% 1,800 180 165 11.0% 1,600 1,543 160 10.0% 1,400 CAGR +19% 140 CAGR +37% 130 1,238 9.0% 1,200 120 100 8.0% 1,000 905 78 811 80 774 7.0% 800 687 56 60 568 43 45 6.0% 600 456 40 34 400 1
Slide 9: And ahead of where we expected to be vs our Long Range Plan
And ahead of where we expected to be vs our Long Range Plan Revenue* (£m) 2500 2000 1500 1000 500 0 FY21 FY22 FY23 FY24 FY25 FY26 Long Range Plan Actuals *Revenue at Reported Rates Long Range Plan Revenue* CAGR FY21 to FY23 +17% Actual Revenue* CAGR FY21 to FY23 +31% +19% +37% The Watches of Switzer
Slide 10: WOSG US share of sales growing and performance led by domestic clientele
WOSG US share of sales growing and performance led by domestic clientele Revenue mix by market 24% 35% 42% FY19 FY22 FY23 58% 65% UK & Europe 76% US Revenue mix by customer segment 3% 12% 4% 21% FY19 FY22 FY23 Domestic UK/EU/US Tourism 67% Airports 97% 96% The Watches of Switzerland Group FY23 Resul
Slide 11: Robust and Flexible Business Model
Robust and Flexible Business Model Well diversified product and brand mix 6% 9% 7% 8% 9% 10% 9% 9% 9% FY19 FY22 FY23 Top 8 Luxury Watch Brands Other Luxury Watch Brands 72% 77% Luxury Jewellery 76% Other The Watches of Switzerland Group FY23 Results, July 2023 11
Slide 12: Sustained Investment in Brand Relationships
Sustained Investment in Brand Relationships Luxury Watch & Jewellery Events Exclusive Product Client Events Grand Prix d’Horlogerie de Genéve Awards The Watches of Switzerland Group FY23 Results, July 2023 12
Slide 13: Xenia – Delivering an Exceptional Client Experience
Xenia – Delivering an Exceptional Client Experience UK Client Experience US Client Experience Showrooms Showrooms Over 93% of Clients state our Clients state our occasions our clients colleagues show Showrooms scored 97% showrooms present a are made to feel at expertise, confidence, in making positi
Slide 14: UK: Impactful Digital and PR Activity Driving Awareness and Sales
UK: Impactful Digital and PR Activity Driving Awareness and Sales Digital Reach FY23 . Monthly reach on social 58.7M Total campaign Impressions 4.4BN (including search and shopping) Total campaign clicks 36.8M The Watches of Switzerland Group FY23 Results, July 2023 14
Slide 15: US: Impactful Digital and PR Activity Driving Awareness and Sales
US: Impactful Digital and PR Activity Driving Awareness and Sales Digital Reach FY23 Monthly impressions on Social 13.5M Digital campaign Impressions 990M (including search and shopping) PR impressions 9.1BN The Watches of Switzerland Group FY23 Results, July 2023 15
Slide 16: Expand Multi-Channel Leadership: Ongoing Investment into digital and technology
Expand Multi-Channel Leadership: Ongoing Investment into digital and technology Luxury Watch & Jewellery Virtual Boutique Ecommerce Web enabled The Watches of Switzerland Group FY23 Results, July 2023 16
Slide 17: Pre-Owned is continuing to develop
Pre-Owned is continuing to develop • Expanded pre-owned into new doors in both UK and US, more than doubled showroom footprint in the US and rolled out across online platforms • Ongoing investment into Analog:Shift • Investing and expanding capacity in both UK and US to repair and service timepieces
Slide 18: Continue to advance the ESG Agenda
Continue to advance the ESG Agenda: To WOW our clients, while caring for colleagues, our communities and our planet People Planet Responsible Sourcing The use by Watches of Switzerland Group (WOSG) of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, s
Slide 19: The Watches of Switzerland Group Foundation
Continue to advance the ESG Agenda: The Watches of Switzerland Group Foundation Strategic Partners FOOD BANKS UK & US FUEL BANK FOUNDATION UK £6.0 million cumulative donations to Foundation PRINCE’S TRUST UK & US HABITAT FOR HUMANITY US CRISIS UK The Watches of Switzerland Group FY23 Results, July 2
Slide 20: UK & Europe
The Watches of Switzerland Group UK & Europe Craig Bolton - President UK & Europe
Slide 21: FY23 UK Showroom Development
FY23 UK Showroom Development • 15 new showrooms • 12 showrooms refurbished / expanded The Watches of Switzerland Group FY23 Results, July 2023 21
Slide 22: Goldsmiths Luxury Roll-out: Cribbs Causeway – Pre-Refit
Goldsmiths Luxury Roll-out: Cribbs Causeway – Pre-Refit The Watches of Switzerland Group FY23 Results, July 2023 22
Slide 23: Goldsmiths Luxury Roll-out: Cribbs Causeway – Post-Refit
Goldsmiths Luxury Roll-out: Cribbs Causeway – Post-Refit The Watches of Switzerland Group FY23 Results, July 2023 23
Slide 24: Mappin & Webb: York Pre Refit
Mappin & Webb: York Pre Refit The Watches of Switzerland Group FY23 Results, July 2023 24
Slide 25: Mappin & Webb: New Contemporary Concept York
Mappin & Webb: New Contemporary Concept York The Watches of Switzerland Group FY23 Results, July 2023 25
Slide 26: Watches of Switzerland Battersea, London
Watches of Switzerland Battersea, London Opened October 2022 The Watches of Switzerland Group FY23 Results, July 2023 26
Slide 27: First UK Breitling Café and other mono-brand boutiques
First UK Breitling Café and 3 other mono-brand boutiques The Watches of Switzerland Group FY23 Results, July 2023 27
Slide 28: Watches of Switzerland: Stratford - Pre Refit
Watches of Switzerland: Stratford - Pre Refit The Watches of Switzerland Group FY23 Results, July 2023 28
Slide 29: Watches of Switzerland: Stratford - Post Refit
Watches of Switzerland: Stratford - Post Refit The Watches of Switzerland Group FY23 Results, July 2023 29
Slide 30: UK: Driving expansion through Mono-Brand Boutiques
UK: Driving expansion through Mono-Brand Boutiques Breitling York FY23 TUDOR Glasgow UK Mono-Brand Boutiques 51 Longines Glasgow OMEGA Canary Wharf The Watches of Switzerland Group FY23 Results, July 2023 30
Slide 31: Expanding our partnership with Rolex: Old Bond Street, London
Expanding our partnership with Rolex: Old Bond Street, London • Opening Summer 2024 • Three floors of retailing space • Dedicated Rolex Certified Pre-owned area and service lounge The Watches of Switzerland Group FY23 Results, July 2023 31
Slide 32: Expanding our partnership with Rolex: Glasgow
Expanding our partnership with Rolex: Glasgow • Opening Autumn 2024 • Circa 3,000 sq ft Sales area • Dedicated Rolex Certified Pre-owned area and service lounge The Watches of Switzerland Group FY23 Results, July 2023 32
Slide 33: Audemars Piguet: Manchester Town House
Audemars Piguet: Manchester Town House Renders Indicative Estimated Opening Autumn 2024 The Watches of Switzerland Group FY23 Results, July 2023 33
Slide 34: European expansion: Mono-Brand Boutiques Stockholm
European expansion: Mono-Brand Boutiques Stockholm Stockholm June 2022 Stockholm December 2022 Mall of Scandinavia October 2022 The Watches of Switzerland Group FY23 Results, July 2023 34
Slide 35: European expansion: Mono-Brand Boutiques Copenhagen
European expansion: Mono-Brand Boutiques Copenhagen Opened September 2022 The Watches of Switzerland Group FY23 Results, July 2023 35
Slide 36: European expansion: Mono-Brand Boutique Dublin
European expansion: Mono-Brand Boutique Dublin Opened February 2023 The Watches of Switzerland Group FY23 Results, July 2023 36
Slide 37: Mono-Brand Boutiques FY24
Mono-Brand Boutiques FY24 Berlin, Germany - Opened June 2023 Mall of Scandinavia, Stockholm - Opened June 2023 The Watches of Switzerland Group FY23 Results, July 2023 37
Slide 38: The Return of Travel Retail: Heathrow & Gatwick
The Return of Travel Retail: Heathrow & Gatwick The Watches of Switzerland Group FY23 Results, July 2023 38
Slide 39: Expanding Aftersales Service Centres
Expanding Aftersales Service Centres Manchester Leicester The Watches of Switzerland Group FY23 Results, July 2023 39
Slide 40: Client Experience Events
Client Experience Events FY23: 169 Events Over 7,500+ Clients Hosted The Watches of Switzerland Group FY23 Results, July 2023 40
Slide 41: US
The Watches of Switzerland Group US David Hurley - President of North America & Deputy CEO
Slide 42: Exceptional US Growth Since Inception
Exceptional US Growth Since Inception 20 Doors 23 Doors 23 Doors 32 Doors 40 Doors 47 Doors Sales $USD (millions) +36% +46% 785 +40% 579 +19% +101% 397 241 287 120 FY18 FY19 FY20 FY21 FY22 FY23 • Mayors • First Standalone • First Mayors • Mono-brand • Next Level • 1 Door Acquired Acquisition Door (S
Slide 43: US: New Mono-Brand Boutiques FY23
US: New Mono-Brand Boutiques FY23 Breitling Lenox – Opened May 2022 Copley –Grand Seiko / TAG Heuer– Opened TUDOR August 2022 Glasgow Breitling & TAG Heuer, Boca – Opened October 2022 TUDOR Lenox – Opened September 2022 The Watches of Switzerland Group FY23 Results, July 2023 43
Slide 44: Acquisition: Betteridge
Acquisition: Betteridge • Acquired December 2021 • Strong local clientele • Affluent market • Embedding Xenia across new showrooms The Watches of Switzerland Group FY23 Results, July 2023 44
Slide 45: Betteridge: Greenwich Expansion
Betteridge: Greenwich Expansion • Additional 4,500 sq ft leased • Significant expansion agreed for both Rolex & Patek Philippe • Patek Philippe espace to open FY24 The Watches of Switzerland Group FY23 Results, July 2023 45
Slide 46: Plano (Dallas), Texas Relocation and Expansion
Plano (Dallas), Texas Relocation and Expansion • New Flagship space secured • Showroom to be anchored by Rolex & Cartier • Opening FY25 The Watches of Switzerland Group FY23 Results, July 2023 46
Slide 47: American Dream: Opened May 2023
American Dream: Opened May 2023 Cartier to Open prior to end Q1 FY24 The Watches of Switzerland Group FY23 Results, July 2023 47
Slide 48: Mayors Dadeland: Opened May 2023
Mayors Dadeland: Opened May 2023 The Watches of Switzerland Group FY23 Results, July 2023 48
Slide 49: Store Development FY24
Store Development FY24 • Grand Seiko / Breitling / TAG Heuer Canal Place, New Orleans – Q2 FY24 • Grand Seiko / Breitling / TAG Heuer Fashion Place, Salt Lake City – Q2 FY24 • Rolex Boutique Millenia Orlando Expansion Q2 FY24 • Watches of Switzerland One Vanderbilt New York Q3 FY24 • Mayors Tampa Ex
Slide 50: Financial Results & Outlook
The Watches of Switzerland Group Financial Results & Outlook Anders Romberg - CFO
Slide 51: Financial KPIs – Revenue and Adjusted EBIT
Financial KPIs – Revenue and Adjusted EBIT Revenue (£m) Adjusted EBIT (£m) 1,800 180 1,600 1,543 165 160 1,400 +25% 140 +27% 1,238 130 1,200 120 1,000 100 800 80 600 60 400 40 200 20 0 0 FY22 FY23 FY22 FY23 The Watches of Switzerland Group FY23 Results, July 2023 51
Slide 52: Financial KPIs – Free cash flow and ROCE
Financial KPIs – Free cash flow and ROCE Free cash flow (£m) Return on Capital Employed 160 28.0% 146 27.9% 140 27.9% +30% 27.8% 120 112 27.7% 100 +50bps 27.6% 80 27.5% 60 27.4% 27.4% 40 27.3% 20 27.2% 0 27.1% FY22 FY23 FY22 FY23 The Watches of Switzerland Group FY23 Results, July 2023 52
Slide 53: Record sales and profitability
Record sales and profitability Income Statement FY23 FY22 YoY % Income Statement presented pre-IFRS 16 and pre-exceptional items (£million) Revenue 1,543 1,238 25% • Revenue +25% on prior year, +19% in constant currency Net margin 576 471 22% • Net margin % adverse 60bps with headwinds from product
Slide 54: Balance sheet strength
Balance sheet strength Balance Sheet (£million) FY23 FY22 YoY % • Continued investment with £68 million of expansionary Goodwill & intangibles 200 183 9% capex (FY22: £41 million) PP&E 154 113 37% • Inventory levels +£53 million (+18%) – reflects increased Right-of-use assets 359 294 22% number of s
Slide 55: Excellent free cash flow
Excellent free cash flow Cash flow (£million) FY23 FY22 YoY % Adjusted EBITDA 201 162 24% Working capital (23) (30) 25% Free cash flow of £146m; 72% free cash flow Tax (27) (16) (70%) conversion, +300bps to FY22 Other 4 2 Cash generated from operating • Adjusted EBITDA increased by 24% 155 118 32% a
Slide 56: Refinancing
Refinancing • Net cash position of £16m, an inflow of £31m in the year • On the 9th May 2023, post year end, the Group entered into a new £225m multicurrency revolving loan facility replacing the prior multiple facilities New Facility Expiring Amount Multicurrency revolving loan facility – May-28 £2
Slide 57: No change to FY24 guidance
No change to FY24 guidance FY24 guidance assumes: FY24 guidance (pre-IFRS 16) Revenue £1.65 - £1.70 billion • Visibility of supply of key brands with no disruption to Revenue growth at constant supply anticipated 8 - 11% currency • Reflects confirmed showroom refurbishments, openings and closures Ad
Slide 58: Summary
The Watches of Switzerland Group Summary Brian Duffy - CEO
Slide 59: Conclusions
Conclusions A record year of revenue and profitability 193 well invested showrooms across the UK, US and Europe with over 2,800 fantastic colleagues Xenia Programme positively impacting client relations and sales conversions Further progression on ESG commitments and the WOSG Group Foundation is wor
Slide 60: Q&A
The Watches of Switzerland Group Q&A Brian Duffy and Anders Romberg
The Watches of Switzerland Group — FY2023 Earnings Presentation on 6ix