Watches Of Switzerland Group Plc · LSE:WOSG
Watches Of Switzerland — The Watches of Switzerland Group — H1 2022 Earnings Presentation
35 slides from Watches Of Switzerland's earnings presentation, December 2021
Slide 1: 1H FY22 Results
The Watches of Switzerland Group 1H FY22 Results December 2021 26 weeks ended 31 October 2021
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 Financial Review & Outlook Anders Romberg Chief Financial Officer Q&A The Watches of Switzerland Group 1H FY22 Results, December 2021 3
Slide 4: CEO Update
The Watches of Switzerland Group CEO Update Brian Duffy, CEO
Slide 5: Strong First Half Performance With Broad-Based and Profitable Growth
Strong First Half Performance With Broad-Based and Profitable Growth Strong growth achieved against both last year and two years ago Group Revenue £586.2m, +44.6% vs H1 FY211 and +40.8% vs H1 FY201 US maintains outstanding momentum Revenue £167.6m, +50.2% vs H1 FY211 and +66.7% vs H1 FY201 Robust UK
Slide 6: Robust and Flexible Business Model
Robust and Flexible Business Model H1 FY20 H1 FY21 H1 FY22 Group Revenue: £428.7 million £414.3 million £586.2 million Adapting to COVID-19 restrictions by strengthening domestic sales 1.7% 7.4% 33.6% 28.6% 40.5% 29.0% H1 FY20 H1 FY21 H1 FY22 63.6% Domestic UK 69.7% Domestic US 25.9% Tourism and Air
Slide 7: Capital Investment in our Store Network Supporting UK Growth
Capital Investment in our Store Network Supporting UK Growth Investment in UK store base: - Network expansion: - Opening of a mono-brand boutique in Trafford Centre - Opening of one Goldsmiths store and two mono-brand boutiques in Edinburgh St James - Opening of three mono-brand boutiques in Plymout
Slide 8: Mono-brand boutique channel further expanded – Plymouth
Mono-brand boutique channel further expanded – Plymouth Trio of mono-brand boutiques opened in Plymouth, new location for the Group TAG Heuer, Breitling and OMEGA mono-brand boutiques, Plymouth The Watches of Switzerland Group 1H FY22 Results, December 2021 8
Slide 9: We Continue to Invest For Growth in the US, Where our Model Works
We Continue to Invest For Growth in the US, Where our Model Works US presence further advanced and elevated • Mayors Aventura, Phase I refurbishment complete: • Opening of enhanced Rolex dedicated space • Opening of first Bvlgari mono-brand boutique (post period end) • Mono-brand boutiques performin
Slide 10: US strategy advanced with purchase of five stores agreed, bringing total to 36
US strategy advanced with purchase of five stores agreed, bringing total to 36 Group’s US store base: 22 multi-brand stores, 14 mono-brand boutiques in 12 states • Purchase of five stores agreed • Minneapolis, Minnesota • Plano (Dallas), Texas • Vail and Aspen, Colorado • Greenwich, Connecticut • Co
Slide 11: Watches of Switzerland, Kenwood Towne Centre - Cincinnati, Ohio
Watches of Switzerland, Kenwood Towne Centre - Cincinnati, Ohio Watches of Switzerland, Cincinnati, Ohio The Watches of Switzerland Group 1H FY22 Results, December 2021 11
Slide 12: Analog:Shift
Analog:Shift The Watches of Switzerland Group 1H FY22 Results, December 2021 12
Slide 13: Analog:Shift
Analog:Shift The Watches of Switzerland Group 1H FY22 Results, December 2021 13
Slide 14: Rolex Boutique, Wynn Resort, Las Vegas
Rolex Boutique, Wynn Resort, Las Vegas The Watches of Switzerland Group 1H FY22 Results, December 2021 14
Slide 15: Watches of Switzerland, Minneapolis, Minnesota
Watches of Switzerland, Minneapolis, Minnesota Watches of Switzerland, Minneapolis, Minnesota Watches of Switzerland, Minneapolis, Minnesota The Watches of Switzerland Group 1H FY22 Results, December 2021 15
Slide 16: Watches of Switzerland, Plano (Dallas), Texas
Watches of Switzerland, Plano (Dallas), Texas Watches of Switzerland, Plano (Dallas), Texas Watches of Switzerland, Plano (Dallas), Texas The Watches of Switzerland Group 1H FY22 Results, December 2021 16
Slide 17: Aspen and Vail, Colorado
Aspen and Vail, Colorado Vail, Colorado Aspen, Colorado The Watches of Switzerland Group 1H FY22 Results, December 2021 17
Slide 18: Greenwich, Connecticut
Greenwich, Connecticut Greenwich, Connecticut The Watches of Switzerland Group 1H FY22 Results, December 2021 18
Slide 19: Further Store Investment Planned – American Dream
Further Store Investment Planned – American Dream Watches of Switzerland, American Dream, New Jersey The Watches of Switzerland Group 1H FY22 Results, December 2021
Slide 20: Exciting New Development in Battersea, London
Exciting New Development in Battersea, London Watches of Switzerland, Battersea The Watches of Switzerland Group 1H FY22 Results, December 2021
Slide 21: Continued investment in digital and technology to further enhance customer experience
Continued investment in digital and technology to further enhance customer experience By Personal Appointment Virtual Client Events Luxury Concierge Ecommerce CRM/Remote Selling • Group ecommerce sales +28.7% on last year, despite stores having been fully opened in H1 FY22 • Customer experience furt
Slide 22: UK: Digital Marketing Driving Awareness
UK: Digital Marketing Driving Awareness Digital Reach First Half FY22 Monthly reach on social 40.1M Total campaign impressions 2.9BN (includes Search & Shopping) Total campaign clicks 25M The Watches of Switzerland Group Half Year Results, December 2021 22
Slide 23: US: Impactful Event and PR Activity Driving Awareness and Sales
US: Impactful Event and PR Activity Driving Awareness and Sales Digital Reach First Half FY22 Monthly impressions on social 6M Digital Campaign Impressions 400M (includes Search & Shopping) PR impressions 2.4BN The Watches of Switzerland Group Half Year Results, December 2021 23
Slide 24: Our People
Our People The Watches of Switzerland Group 1H FY22 Results, December 2021 24
Slide 25: Advancing the ESG programme
Advancing the ESG programme Developing our sustainability and social impact strategy: • Committee of the Board ensuring ESG priorities are governed at the highest level of our business • Recent memberships: • FTSE4Good Index • Business in the Community (BITC) • Delivering on our pledge for British R
Slide 26: The Watches of Switzerland Group Foundation Launched
The Watches of Switzerland Group Foundation Launched £3.0M pledged to the Watches of Switzerland Group Foundation across FY21 and FY22: • Support a number of causes, with an emphasis on helping poor and vulnerable people out of poverty • Pledged over £1.0 million to key charity partners: • Foodbanks
Slide 27: Financial Results & Outlook
The Watches of Switzerland Group Financial Results & Outlook Anders Romberg, CFO
Slide 28: Record Sales and Profitability
Record Sales and Profitability Profit & Loss (£m, pre-IFRS 16 and exceptionals) H1 FY22 H1 FY21 Yoy % • Broad-based and margin-enhancing growth in the US and Group revenue 586.2 414.3 41.5% the UK Net margin 220.5 150.5 46.5% • Group revenue +44.6% vs H1 FY21, +40.8% vs H1 FY20 Margin % 37.6% 36.3%
Slide 29: Balance Sheet Strength
Balance Sheet Strength 31 Oct 25 Oct Balance Sheet (£m, pre-IFRS 16) 2021 2020 Yoy % • Inventories +8.5% vs last year Non-current assets • Well poised for Holiday season Goodwill & Intangible assets 155.9 151.9 2.6% PPE 100.6 97.9 2.7% • Cash & cash equivalents £150.0 million, with total Other 8.6 9
Slide 30: Excellent Free Cash Flow and Conversion
Excellent Free Cash Flow and Conversion Cash Flow (£m, pre-IFRS 16) H1 FY22 H1 FY21 Yoy % Free cash flow £102.3 million Adjusted EBITDA 82.8 52.2 58.6% • 1H FY21 working capital impacted by the timing of inventory Share-based payments 0.1 1.6 (93.8)% payments due to store closures during the first U
Slide 31: Financial KPIs
Financial KPIs 4-Wall EBITDA % Adjusted EBITDA (£m) 21.0% 90 82.8 20.5% 80 20.5% 70 +58.8% 20.0% 60 52.2 +160bps 50 19.5% 40 19.0% 18.9% 30 20 18.5% 10 18.0% 0 H1 FY21 H1 FY22 H1 FY21 H1 FY22 Adjusted EBIT (£m) Return on Capital Employed1 80 25.0% 23.1% 67.5 70 20.0% +590bps 60 +62.7% +16.2% 17.2% 5
Slide 32: FY22 Guidance
FY22 Guidance FY22 guidance is based on no disruption to supply, 52 weeks, pre-IFRS 16 • Revenue: £1.15bn to £1.20bn • EBITDA and Adjusted EBITDA margin %: +1.0% to +1.5% vs last year • Depreciation, amortisation, impairment and profit/loss on disposal of fixed assets: £30.0m to £32.0m • Total finan
Slide 33: Conclusions
The Watches of Switzerland Group Conclusions Brian Duffy, CEO
Slide 34: Conclusions
Conclusions Record breaking first half sales and profit Q3 trading to date supports our FY22 guidance Commitment to achieve Net Zero by 2040 The Watches of Switzerland Group Foundation formally launched Progressing on Long Range Plan targets The Watches of Switzerland Group 1H FY22 Results, December
Slide 35: Q&A
Q&A The Watches of Switzerland Group 1H FY22 Results, December 2021 35
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