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REG - Watches of Switzlnd. - Watches of Switzerland Q4 FY22 Trading

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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



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


"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 £304 million (Q4 FY21: £218 million as reported
for 14 weeks), up 48%(1) on prior year

·      US revenue £136 million (FY21: £92 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 £168 million (FY21: £126 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 £1,238 million (FY21: £905 million
for 53 weeks)

·      US revenue up 48%(1) to £428 million

·      UK revenue up 36%(1) to £810 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

·      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 £160
million and £164 million (FY21: £105 million), implied margin between 12.9%
and 13.2% (FY21: 11.6%)

·      FY22 Adjusted pre-IFRS 16 EBIT 3  expected to be between £128
million and £132 million (FY21: £78 million), giving year on year growth of
+64% to +69%

·      Net debt 4  of £14 million as at 1 May 2022 (2 May 2021: £44

·      £4.5 million paid to The Watches of Switzerland Foundation of
which £1.5 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




·      Our FY23 guidance excludes uncommitted capital projects and

·      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:               £1.45 - £1.50 billion
 o  Adjusted EBITDA %:     flat to +0.5%
 o  Depreciation:          £33 - £35 million
 o  EBIT:                  £157 - £169 million
 o  Total finance costs:   c£4.5 million
 o  Underlying tax rate:   21.5% - 22.0%
 o  Capex:                 £70 - £80 million including the development of new corporate HQ in Leicester
 o  Year-end net cash:     £35 - £45 million




The equivalent guidance on an IFRS 16 basis is:


 o  EBIT:                  £172 - £184 million
 o  Depreciation:          £79 - £83 million
 o  Total finance costs:   £18 - £21 million


·      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
                13 weeks to  14 weeks to  Reported YoY %                            Constant currency excluding FY21 53(rd) week  2-year reported  2-year constant currency

                1 May 2022   2 May 2021                                             YoY %                                         YoY %            YoY %

 (£m)                                                     Constant currency 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
                52 weeks to  53 weeks to  Reported YoY %                            Constant currency            2-year reported  2-year constant currency

                1 May 2021   2 May 2021                   Constant currency YoY %   excluding FY21 53(rd) week   YoY %            YoY %

 (£m)                                                                               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
                   13 weeks to  14 weeks to          Constant currency            52 weeks to 1 May 2022  53 weeks to 2 May 2021  YoY %  Constant currency

                   1 May 2021   2 May 2021           excluding FY21 53(rd) week                                                          excluding FY21 53(rd) week

 (£m)                                        YoY %   YoY %                                                                               YoY %

 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


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 (mailto:investor.relations@thewosgroup.com)




 Lucy Legh / Joanna Clark  +44 (0) 20 3805 4822


wos@headlandconsultancy.com (mailto: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 (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


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

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