TIDMWOSG
RNS Number : 8487L
Watches of Switzerland Group PLC
18 May 2022
Watches of Switzerland Group PLC
Q4 FY22 Trading
for the 13 weeks (Q4) and 52 weeks (FY) to 1 May 2022
Stellar end to FY22 with strong momentum into FY23
Revenue growth of 48%([1]) in Q4, 40%(1) for the full year with
improved profitability
Watches of Switzerland Group PLC ("the Group") today provides
the following unaudited update relating to the 13 and 52 weeks
ending 1 May 2022.
Brian Duffy, Chief Executive Officer, said:
" We are pleased to report a strong quarter of 48%(1) growth to
finish what was an outstanding year for the Group. We have
delivered another record year of revenue and profitability as we
continue to progress our Long Range Plan. Our teams have again
excelled and done great work."
"We delivered an outstanding performance in both the US and UK,
supported by broad-based sales growth across our portfolio of world
leading partner brands and driven by domestic clientele. We were
also delighted to announce our forthcoming entry into the European
market, which will provide our Group with further growth
opportunities and geographic diversification."
"The luxury watch and jewellery markets are dynamic and our
Group investment-led model continues to gain positive momentum.
Consumer desire for "Super High Demand" brands (Rolex, Patek
Philippe and Audemars Piguet) continues to exceed supply and other
luxury watch brands are enjoying exceptionally strong demand and
sales. Luxury jewellery demand is also very positive."
"Looking ahead, our FY23 guidance reflects our confidence in our
markets and business model. We enter FY23 with visibility of
product supply for Super High Demand brands for the remainder of
the 2022 calendar year and an exciting programme of new products
and marketing from other brands. We have a strong pipeline of
showroom projects, and we expect an ongoing recovery in footfall
and airport traffic. Our focus will be on continuing to capitalise
on the momentum we have built to deliver value for all our
stakeholders."
Q4 FY22 Highlights
-- Group revenue GBP304 million (Q4 FY21: GBP218 million as
reported for 14 weeks), up 48%(1) on prior year
-- US revenue GBP136 million (FY21: GBP92 million for 14 weeks), up 50%(1) vs Q4 FY21
o Opening of our flagship Watches of Switzerland in Kenwood
Towne Center, Cincinnati, Ohio
-- UK revenue GBP168 million (FY21: GBP126 million as reported
for 14 weeks), up 47%(1) vs Q4 FY21
o Opening of three mono-brand boutiques - Breitling Bullring,
TAG Solihull and OMEGA Meadowhall
o Relocation of Mappin & Webb Chester
FY22 Highlights
-- Group revenue up 40%(1) to GBP1,238 million (FY21: GBP905 million for 53 weeks)
-- US revenue up 48%(1) to GBP428 million
-- UK revenue up 36%(1) to GBP810 million
-- FY22 luxury watch sales up 36%(1) on last year. Demand for
luxury watches continues to be very strong in both the UK and the
US, consistently exceeding supply
-- Sales of Super High Demand watches increased modestly on
strong prior year sales, and restricted supply
-- Growth in other luxury watches more than double prior year
-- FY22 luxury jewellery sales up 86%(1) on last year reflecting
a strong market, continued improvement in ranging, incremental
growth from the Betteridge acquisition and the opening of our first
BVLGARI mono-brand boutique
-- Group ecommerce sales for FY22 were up 5%(1) on last year
when showrooms were closed for approximately 26 weeks during
COVID-19 lockdown (up 128% vs FY20)
-- Sales continued to be driven by a domestic clientele, making
up 97% of Group revenue (FY21: 95%)
-- Xenia, the Group's elevated customer service project launched in all showrooms
-- FY22 Adjusted pre-IFRS 16 EBITDA[2] expected to be between
GBP160 million and GBP164 million (FY21: GBP105 million), implied
margin between 12.9% and 13.2% (FY21: 11.6%)
-- FY22 Adjusted pre-IFRS 16 EBIT[3] expected to be between
GBP128 million and GBP132 million (FY21: GBP78 million), giving
year on year growth of +64% to +69%
-- Net debt[4] of GBP14 million as at 1 May 2022 (2 May 2021: GBP44 million)
-- GBP4.5 million paid to The Watches of Switzerland Foundation
of which GBP1.5 million was accrued in FY21. This will support
communities where we work and live in relation to foodbanks,
homelessness support and the promotion of young people enabling
them to fulfil their potential
-- In Q3 FY22, the Group granted a free gift of 50 shares to all
colleagues and launched employee share save schemes in the UK and
US to further reward and incentivise colleagues
Outlook
-- Our FY23 guidance excludes uncommitted capital projects and acquisitions
-- The Group enters FY23 with strong momentum and anticipates
that disruption from the pandemic is now largely behind us with
ongoing recovery in footfall and airport traffic
-- Our FY23 guidance reflects current visibility of supply of
key brands and confirmed showroom refurbishments, openings and
closures
-- The Group provides the following FY23 guidance on an organic pre-IFRS 16 basis:
o Revenue: GBP1.45 - GBP1.50 billion
o Adjusted EBITDA flat to +0.5%
%:
o Depreciation: GBP33 - GBP35 million
o EBIT: GBP157 - GBP169 million
o Total finance cGBP4.5 million
costs:
o Underlying tax 21.5% - 22.0%
rate:
o Capex: GBP70 - GBP80 million including the development
of new corporate HQ in Leicester
o Year-end net GBP35 - GBP45 million
cash:
The equivalent guidance on an IFRS 16 basis is:
o EBIT: GBP172 - GBP184 million
o Depreciation: GBP79 - GBP83 million
o Total finance GBP18 - GBP21 million
costs:
-- The Group has an exciting pipeline of showroom projects planned in FY23:
o Opening of new Watches of Switzerland flagship showroom in
American Dream, New Jersey
o New Watches of Switzerland showroom in Battersea, London
alongside four mono-brand boutiques
o Continued roll out of Goldsmiths Luxury showroom format
o Relocation of two showrooms in the Mayors network in
Florida
o Expansion of the mono-brand portfolio in the UK and US
o Entry into the European market through the opening of six
mono-brand boutiques in Sweden, Denmark and the Republic of
Ireland
-- The Group plans to announce FY22 results on 7 July 2022
Q4 FY22 Revenue performance by geography
Q4 FY22 Q4 FY21 Q4 FY22 vs Q4 FY21 Q4 FY22vs Q4
FY20
---------------
Constant
currency
(GBPm) 13 weeks 14 weeks Constant excluding 2-year
to to currency FY21 53(rd) 2-year constant
1 May 2 May Reported YoY % week reported currency
2022 2021 YoY % YoY % YoY % YoY %
--------- --------- --------- ----------- ------------- ---------- ----------
UK 168 126 33% 33% 47% 98% 98%
--------- --------- --------- ----------- ------------- ---------- ----------
US 136 92 48% 41% 50% 246% 255%
--------- --------- --------- ----------- ------------- ---------- ----------
Group Revenue 304 218 39% 36% 48% 145% 148%
--------- --------- --------- ----------- ------------- ---------- ----------
FY22 Revenue performance by geography
FY22 FY21 FY22 vs FY21 FY22 vs FY20
---------------
Constant
currency
(GBPm) 52 weeks 53 weeks excluding 2-year
to to Constant FY21 53(rd) 2-year constant
1 May 2 May Reported currency week reported currency
2021 2021 YoY % YoY % YoY % YoY % YoY %
--------- --------- --------- ----------- ------------- ---------- ----------
UK 810 606 34% 34% 36% 38% 38%
--------- --------- --------- ----------- ------------- ---------- ----------
US 428 299 44% 46% 48% 90% 102%
--------- --------- --------- ----------- ------------- ---------- ----------
Group Revenue 1,238 905 37% 38% 40% 53% 56%
--------- --------- --------- ----------- ------------- ---------- ----------
Q4 FY22 and FY22 revenue performance by category
Q4 FY
------------------
Constant
Constant currency
(GBPm) currency excluding
excluding FY21
13 weeks 14 weeks FY21 52 weeks 53 weeks 53(rd)
to to 53(rd) to 1 to 2 week
1 May 2 May week May May YoY YoY
2021 2021 YoY % YoY % 2022 2021 % %
--------- --------- -------- ----------- --------- --------- ---- -----------
Luxury watches 258 195 32% 40% 1,047 788 33% 36%
--------- --------- -------- ----------- --------- --------- ---- -----------
Luxury jewellery 27 12 124% 165% 109 61 79% 86%
--------- --------- -------- ----------- --------- --------- ---- -----------
Other 19 11 68% 81% 82 56 47% 50%
--------- --------- -------- ----------- --------- --------- ---- -----------
Group Revenue 304 218 39% 48% 1,238 905 37% 40%
--------- --------- -------- ----------- --------- --------- ---- -----------
Conference call
A conference call for analysts and investors will be held at
8.00am (UK time) today. To join the call, please use the following
details:
Dial-in: +44 20 3936 2999
Conference access code: 353323
Contacts
The Watches of Switzerland Group
Bill Floydd, CFO +44 (0) 207 317 4600
Caroline Browne, Group Finance Director
& Investor Relations +44 (0) 116 2817 420
investor.relations@thewosgroup.com
Headland
Lucy Legh / Joanna Clark +44 (0) 20 3805 4822
wos@headlandconsultancy.com
About the Watches of Switzerland Group
The Watches of Switzerland Group is the UK's largest luxury
watch retailer, operating in both the UK and US, comprising five
prestigious brands; Watches of Switzerland (UK and US), Mappin
& Webb (UK), Goldsmiths (UK), Mayors (US) and Betteridge (US),
with a complementary jewellery offering.
As at 1 May 2022, the Watches of Switzerland Group has 171
showrooms across the UK and US including 55 dedicated mono-brand
boutiques in partnership with Rolex, TAG Heuer, Breitling, OMEGA,
TUDOR, Audemars Piguet, Grand Seiko, BVLGARI and FOPE and has a
leading presence in Heathrow Airport with representation in
Terminals 2, 3, 4 and 5 as well as seven retail websites.
The Watches of Switzerland Group is proud to be the UK's largest
retailer for Rolex, Cartier, OMEGA, TAG Heuer and Breitling
watches.
Mappin & Webb holds Royal warrants as goldsmiths,
silversmiths and jeweller to Her Majesty The Queen and silversmiths
to His Royal Highness The Prince of Wales. The Mappin & Webb
master jeweller has been Crown Jeweller, custodian of the Crown
Jewels of Her Majesty The Queen since 2012.
https://www.thewosgroupplc.com
Cautionary note regarding forward-looking statements
This announcement 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 use of
forward-looking terminology, including the terms "believes",
"estimates", "anticipates", "expects", "intends", "plans", "goal",
"target", "aim", "may", "will", "would", "could" or "should" or, in
each case, their negative or other variations or comparable
terminology. They appear in a number of places throughout this
announcement and the information incorporated by reference into
this announcement and may include statements regarding the
intentions, beliefs or current expectations of the Company
Directors or the Group concerning, amongst other things: (i) future
capital expenditures, expenses, revenues, earnings, synergies,
economic performance, indebtedness, financial condition, dividend
policy and future prospects; (ii) business and management
strategies, the expansion and growth of the Group's business
operations; and (iii) the effects of government regulation and
industry changes on the business of the Company or the Group.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future and may be
beyond the Company's ability to control or predict. Forward-looking
statements are not guarantees of future performance. The Group's
actual results of operations, financial condition, liquidity, and
the development of the industry in which it operates may differ
materially from the impression created by the forward-looking
statements contained in this announcement and/or the information
incorporated by reference into this presentation.
Any forward-looking statements made by or on behalf of the
Company or the Group speak only as of the date they are made and
are based upon the knowledge and information available to the
Directors on the date of this announcement, and are subject to
risks relating to future events, other risks, uncertainties and
assumptions relating to the Company's operations and growth
strategy, and a number of factors that could cause actual results
and developments to differ materially from those expressed or
implied by the forward-looking statements. Undue reliance should
not be placed on any forward-looking statements.
Before making any investment decision in relation to the Company
you should specifically consider the factors identified in this
document, in addition to the risk factors that may affect the
Company or the Group's operations which are described in the Annual
Report and Accounts 2021 in Risk Management and Principal Risks and
Uncertainties.
([1]) Revenue growth metrics are on a constant currency basis
excluding the FY21 53rd week
([2]) Unaudited adjusted pre-IFRS 16 EBITDA is Earnings Before
Interest, Tax, Depreciation and Amortisation before exceptional
items
([3]) Unaudited adjusted pre-IFRS 16 EBIT is Earnings Before
Interest and Tax before exceptional items
([4]) Net debt is total borrowings (excluding IFRS 16 lease
liabilities) before adjusting for capitalised transaction costs
less cash and cash equivalents
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