Watches Of Switzerland Group Plc · LSE:WOSG
Watches Of Switzerland — The Watches of Switzerland Group — FY2024 Earnings Presentation
56 slides from Watches Of Switzerland's earnings presentation, June 2024
Slide 1: The Watches of Switzerland Group FY24 Results
The Watches of Switzerland Group FY24 Results June 2024 52 weeks ended 28 April 2024
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 US David Hurley President North America & Deputy CEO UK Craig Bolton President UK Financial Review & Outlook Anders Romberg Chief Financial Officer Long Range Plan Brian Duffy/Anders Romberg Q&A American Dream, New Jersey – Opened May 2023 3 3 Th
Slide 4: CEO Update
The Watches of Switzerland Group CEO Update Brian Duffy, CEO
Slide 5: Luxury Watch Market Strong and Resilient
Luxury Watch Market Strong and Resilient • Luxury watch market robust and resilient and continues to be characterised by demand exceeding supply • FY24 – a year of market ‘normalisation’ following a period of unusually high growth • On average, market remains strong within this period - Swiss Watch
Slide 6: Watches of Switzerland Group Model Success – Market Share Gains
Watches of Switzerland Group Model Success – Market Share Gains • Differentiated WOS Group model continues to succeed with market share gain in US and UK • Acquisition of Roberto Coin Inc. offers exciting growth prospects in branded luxury jewellery and profit accretion • Pre-Owned category both Rol
Slide 7: 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% FY19 76% 42% FY23 58% 45% FY24* 55% UK and Europe US Revenue mix by customer segment 4% 5% 33% FY19 FY23 FY24 Domestic Tourism/Airports 67% 96% 95% * With Roberto Coin Inc. CY23 sales: US 49% 7 The Wa
Slide 8: Robust and Flexible Business Model
Robust and Flexible Business Model Well diversified product and brand mix 9% 6% * 6% 8% 7% 10% 9% 10% 9% FY19 FY23 FY24 Top 8 Luxury Watch Brands Other Luxury Watch Brands 72% Luxury Jewellery 77% 77% Other * With Roberto Coin Inc. CY23 sales jewellery is 14% 8 The Watches of Switzerland Group FY24
Slide 9: Accelerated Growth in Dynamic Pre-Owned Market
Accelerated Growth in Dynamic Pre-Owned Market Rolex Certified Pre-Owned - US July 2023: Launched online and in 7 showrooms, now in 19 US: Analog:Shift – 22 showrooms Rolex Certified Pre-Owned - UK September 2023: Launched online and now in 17 showrooms UK: WOSG Certified Pre-Owned – 17 showrooms 9
Slide 10: Expanding Service Centres – Pre-Owned Support and Client Service
Expanding Service Centres – Pre-Owned Support and Client Service Leicester Manchester Fort Lauderdale 10 The Watches of Switzerland Group FY24 Results, June 2024
Slide 11: Multiple Growth Initiatives to Expand Luxury Jewellery Offering
Multiple Growth Initiatives to Expand Luxury Jewellery Offering New multi-brand luxury jewellery boutique Roberto Coin Inc. acquisition New/expanded portfolio of brand partnerships investment in Mappin & Webb Showroom designs with dedicated jewellery Online growth rooms/galleries/hospitality 11 The
Slide 12: Client Reach Out 13,000+ Clients Hosted
Client Reach Out 13,000+ Clients Hosted – Launch of Amex Centurion, Increase in CRM Activity Increase in Virtual Boutique Resources 12 The Watches of Switzerland Group FY24 Results, June 2024
Slide 13: 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 Community £7.5m cumulative donations to the Foundation The use by Watches of Switzerland Group (WOSG) of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and th
Slide 14: The Watches of Switzerland Group Foundation and Volunteering
Continue to Advance the ESG Agenda: The Watches of Switzerland Group Foundation and Volunteering FOOD BANKS UK/US – FUEL BANK VOLUNTEERING +23% YOY PRINCE’S TRUST UK & US HABITAT FOR HUMANITY US CRISIS UK 14 The Watches of Switzerland Group FY24 Results, June 2024
Slide 15: US
The Watches of Switzerland Group US David Hurley, President of North America & Deputy CEO
Slide 16: Exceptional US Growth Since Inception
Exceptional US Growth Since Inception 20 Doors 23 Doors 23 Doors 32 Doors 40 Doors 47 Doors 56 Doors +11% Revenue $US (millions) +36% +46% +38% 870 +18% 785 +101% 579 397 241 287 120 FY18 FY19 FY20 FY21 FY22 FY23 FY24 • Mayors acquisition • First standalone • First Mayors • Mono-brand • 5 doors acqu
Slide 17: New Watches of Switzerland American Dream: Opened May 2023
New Watches of Switzerland American Dream: Opened May 2023 17 The Watches of Switzerland Group FY24 Results, June 2024 17
Slide 18: Rolex Mono-Brand Boutique Orlando Expansion: Opened November 23
Rolex Mono-Brand Boutique Orlando Expansion: Opened November 23 18 The Watches of Switzerland Group FY24 Results, June 2024 18
Slide 19: New Watches of Switzerland One Vanderbilt, New York: Opened February 24
New Watches of Switzerland One Vanderbilt, New York: Opened February 24 19 The Watches of Switzerland Group FY24 Results, June 2024 19
Slide 20: Betteridge: Greenwich Expansion
Betteridge: Greenwich Expansion • Additional 2,200 sq ft • Significant expansion agreed for both Rolex & Patek Philippe • Patek Philippe space to open August FY24 20 20 The Watches of Switzerland Group FY24 Results, June 2024
Slide 21: Plano (Dallas), Texas Relocation and Expansion
Plano (Dallas), Texas Relocation and Expansion: Opening November 2024 • New Flagship space secured • Introduction of Rolex and Cartier 21 21 The Watches of Switzerland Group FY24 Results, June 2024
Slide 22: Acquisition of Roberto Coin Inc.
Acquisition of Roberto Coin Inc. • WOSG acquires Roberto Coin Inc. for $130m • Rights in perpetuity for the distribution of the Roberto Coin brand in the US, Canada, Central America and the Caribbean • Acceleration of WOSG strategy of growing presence in luxury branded jewellery sector • US is the #
Slide 23: About Roberto Coin
About Roberto Coin Based in Vicenza Product Ruby Located in the heart of Vicenza, otherwise known as the City of Gold, the heart of Jewellery manufacture in Italy 23 The Watches of Switzerland Group FY24 Results, June 2024
Slide 24: Opportunity to Accelerate Roberto Coin Inc. Growth
Opportunity to Accelerate Roberto Coin Inc. Growth Support business momentum and drive incremental growth through: • Mono-brand boutiques – owned and franchised with wholesale partners • Develop online direct and with existing partners • Enhanced in-store presentation with existing wholesale partner
Slide 25: UK
The Watches of Switzerland Group UK Craig Bolton - President UK
Slide 26: Goldsmiths Liverpool Expansion: Opened September 23
Goldsmiths Liverpool Expansion: Opened September 23 26 The Watches of Switzerland Group FY24 Results, June 2024 26
Slide 27: Goldsmiths Trafford Expansion, Manchester: Opened May 2024
Goldsmiths Trafford Expansion, Manchester: Opened May 2024 27 The Watches of Switzerland Group FY24 Results, June 2024
Slide 28: Mappin & Webb Bluewater: Opened December 2023
Mappin & Webb Bluewater: Opened December 2023 28 The Watches of Switzerland Group FY24 Results, June 2024
Slide 29: Mappin & Webb Edinburgh: Opened June 2024
Mappin & Webb Edinburgh: Opened June 2024 29 The Watches of Switzerland Group FY24 Results, June 2024
Slide 30: Watches of Switzerland Regent Street Patek Philippe Expansion
Watches of Switzerland 155 Regent Street Patek Philippe Expansion: Opened January 2024 30 The Watches of Switzerland Group FY24 Results, June 2024
Slide 31: Expanding Our Partnership With Rolex: Old Bond Street, London
Expanding Our Partnership With Rolex: Old Bond Street, London • Completes March 25 • Four floors of retailing space • Dedicated Rolex Certified Pre-Owned area and aftersales service lounge 31 31 The Watches of Switzerland Group FY24 Results, June 2024
Slide 32: Expanding Our Partnership With Rolex: Expansion of Glasgow Boutique
Expanding Our Partnership With Rolex: Expansion of Glasgow Boutique • Work commencing FY25 • Circa 3,000 sq ft sales area • Dedicated Rolex Certified Pre-Owned area and aftersales service lounge 32 32 The Watches of Switzerland Group FY24 Results, June 2024
Slide 33: Audemars Piguet: Manchester Town House
Audemars Piguet: Manchester Town House Opening Spring 2025 33 33 The Watches of Switzerland Group FY24 Results, June 2024
Slide 34: The House of Luxury Jewellery Brands
Mappin & Webb Luxury Jewellery Boutique - Manchester The House of Luxury Jewellery Brands Opening Spring 2025 The Watches of Switzerland Group FY24 Results, June 2024 34 The Watches of Switzerland Group FY24 Results, June 2024 34
Slide 35: Acquisition of Ernest Jones Luxury Showrooms
Acquisition of Ernest Jones Luxury Showrooms • Previously part of Signet Group • 15 Luxury showrooms acquired in November 2023 • Fully integrated into WOSG estate in April 2024 • Trading in line with expectations 35 The Watches of Switzerland Group FY24 Results, June 2024 35
Slide 36: Financial Results & Outlook
The Watches of Switzerland Group Financial Results & Outlook Anders Romberg, CFO
Slide 37: Financial KPIs
Financial KPIs Revenue Adjusted EBIT £1,538m £135m +2% constant currency (18%) vs FY23 Flat at reported rates Adjusted EBIT 8.8% (190bps) vs FY23 Free cash flow ROCE £118m 19.5% 66% free cash flow conversion (840bps) vs FY23 (19%) vs FY23 Refer to Glossary in Appendix for definitions 37 37 The Watch
Slide 38: Income Statement
Income Statement Income Statement FY24 FY23 YoY % (£million) Income Statement presented pre-IFRS 16 and pre-exceptional items Revenue 1,538 1,543 -% Net margin 562 576 (2%) • Revenue flat on prior year, +2% in constant currency Net margin % 36.6% 37.4% (80bps) • Net margin % adverse 80bps with headw
Slide 39: Balance Sheet Strength
Balance Sheet Strength Balance Sheet (£million) FY24 FY23 YoY % • Balance sheet is presented on a post IFRS-16 basis Goodwill & intangibles 216 200 8% • Continued investment with £78 million of expansionary capex PP&E 191 154 24% (FY23: £68 million) Right-of-use assets 382 359 6% • Inventory levels
Slide 40: Excellent Free Cash Flow
Excellent Free Cash Flow Cash flow (£million) FY24 FY23 YoY % Adjusted EBITDA 179 201 (11%) Working capital (20) (23) 10% Tax (34) (27) (26%) Free cash flow of £118 million; 66% free cash flow conversion, ahead of guidance Other 2 4 Cash generated from operating 127 155 (18%) • Adjusted EBITDA decre
Slide 41: Refinancing
Refinancing • On the 9 May 2023, the Group secured a new £225 million multicurrency revolving loan facility replacing the prior multiple facilities • Liquidity headroom increased by £55 million following the refinancing • On 8 May 2024, drew down on a $115 million term loan to New Facility Expiring
Slide 42: Confirmed FY25 Guidance
Confirmed FY25 Guidance FY25 guidance (pre-IFRS 16) FY25 guidance assumes: Revenue £1.67 - £1.73 billion Revenue growth at constant • Visibility of supply of key brands 9 - 12% currency • Reflects confirmed showrooms refurbishments, openings and closures +0.2 to +0.6 percentage points Adjusted EBIT
Slide 43: Long Range Plan
The Watches of Switzerland Group Long Range Plan Brian Duffy, CEO
Slide 44: FY25/28 LRP Plans
FY25/28 LRP Plans • Strong new project programme • Luxury Jewellery • Roberto Coin • New jewellery concept • Accelerated Pre-Owned concept • US ecommerce • Acquisitions and new projects – US profitability gain through leverage and cost (North America) management 44 The Watches of Switzerland Group F
Slide 45: Strong US Project Pipeline Through FY28
Strong US Project Pipeline Through FY28 Completion of: • Mayors • Betteridge St Johns Town Centre, Jacksonville Betteridge Vail • Marlton, New Jersey • Plano, Texas • Minneapolis, Minnesota Plano Texas Mayors Tampa International 45 The Watches of Switzerland Group FY24 Results, June 2024
Slide 46: Major Project Pipeline UK Through FY28
Major Project Pipeline UK Through FY28 Completion of: Rolex Old Bond Street Rolex Glasgow • M&W contemporary • Goldsmiths Luxury Audemars Piguet Town House Manchester Mappin & Webb Luxury Jewellery 46 The Watches of Switzerland Group FY24 Results, June 2024
Slide 47: Significant Growth Potential With Roberto Coin
Significant Growth Potential With Roberto Coin • Very positive market reaction to new designs at Couture 2024 o WOS CEO meetings with key partners as well as wider Roberto Coin team • First Roberto Coin mono-brand boutique locations being secured • Early discussion with potential franchise partners
Slide 48: New Luxury Jewellery Showroom Concept
New Luxury Jewellery Showroom Concept 48 The Watches of Switzerland Group FY24 Results, June 2024
Slide 49: Accelerated Pre-Owned Business
Accelerated Pre-Owned Business • Sales/conversion ahead of expectation • Increased sourcing and improved product logistics • Marketing, in store branding, and window displays • Online development 49 The Watches of Switzerland Group FY24 Results, June 2024
Slide 50: US Ecommerce
US Ecommerce • UK ecommerce sales >8% • US ecommerce sales <2% • No significant luxury watch multibrand player • New dedicated US team in place • Investment in technology • Investment in marketing • Expand online brand portfolio in watches and jewellery • Pre-Owned potential 50 The Watches of Switze
Slide 51: Acquisitions and New Projects
Acquisitions and New Projects Mayors Wynn Resort, Las Vegas • US market is underdeveloped • Brand consolidation/elevation in the US market Betteridge continues Betteridge Timeless Plano • WOS fully established as a leading US Retail Group with recent investment/elevation in infrastructure • Roberto
Slide 52: The Revised Sales Plan Growth Matrix
The Revised Sales Plan Growth Matrix Luxury branded Ernest Showroom Jones Acquisitions/new Ecomm CPO jewellery (including investment Roberto Coin Inc.) acquisition showrooms MORE THAN DOUBLE SALES AND PROFITS FROM FY23 BASE US US US US US UK 50-150 bps profitability improvement UK UK UK 65-70% free
Slide 53: Summary
Summary • The Watches of Switzerland Group model works and we continue with our strategy of investment for profitability • The luxury watch market is strong and resilient with demand continuing to exceed supply • We have a very strong programme of major projects in the coming years offering incremen
Slide 54: Q&A
The Watches of Switzerland Group Q&A Brian Duffy - CEO Anders Romberg - CFO
Slide 55: Investor Relations Calendar
Investor Relations Calendar ANNOUNCEMENT TIMING AGM Trading Update September Half Year Results December Holiday Trading Update January Full Year Results July 55 The Watches of Switzerland Group FY24 Results, June 2024
Slide 56: Glossary
Glossary Adjusted EBIT: Adjusted Earnings Before Interest and Tax is operating profit before exceptional items and IFRS-16 impact Adjusted EBIT margin: Adjusted EBIT divided by revenue Adjusted EBITDA: Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation is shown before exceptional
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