WATCHES OF SWITZERLAND GROUP PLC (WOSG) July 2026 Investor Update Transcript

Good morning everyone, thank you for joining our presentation. We will be reasonably brief this morning, focusing on fiscal year 26 results, ahead of hosting a more in-depth presentation on our growth strategies this afternoon. You'll be hearing firstly from me, Brian Duffy, Group CEO. I'll be taking you through some highlights for the year and performance against our growth pillars. I'll then hand over to Anders Romberg, our Group CFO, who'll take you through the numbers in more detail before we open up, as usual, for your questions. Fiscal Year 26 was a year of strong execution against what was a complex and changeable operating backdrop. The growth our teams managed to deliver while navigating headwinds from tariffs, gold pricing, margin changes and ongoing consumer pressure in the UK is a testament to their drive and capabilities. So our top line numbers sales for the year of 1.828 billion up 13% on last year in constant currency. The US was plus 24% in constant currency which saw it become our largest revenue and profits market and the UK was plus five on last year. Encouragingly, we saw an improving trend over the course of the year with H2 at plus 17% constant currency ahead of the plus 10% delivered in H1. Adjusted EBIT grew 6% in constant currency to 155 million and statutory PBT of £133 million was up an impressive 75% year on year. Turning to our growth drivers, we will talk about these focus areas in more detail this afternoon but for now I'd like to share some of the highlights from Fiscal 26. We invested £66 million into our showroom estate during the year, completing 13 major projects. We were also very pleased to complete the acquisition of Deutsch & Deutsch in January. This is a fantastic addition to our business, showrooms which have a well-established presence and client relationships in four Texas locations, as well as long-standing partnerships with leading watch and jewellery brands. Pre-Owen continued to perform well, up 22% year on year, with good growth in both the UK and the US. In luxury branded jewellery, Roberto Coyne performed very well at plus 20%. We saw sales through our Mayor's boutiques more than double following the upgraded Shop & Shop installations. We've had good success with our launch of lab-grown diamonds. The product is trading really well in the UK and we have now launched in the US. e-commerce also had a good year in both markets with growth outpacing the overall group at plus 21%. We launched a new upgraded Houdinki app during the year with a shop option through to Watchtower Switzerland. Ben Clymer founder of Houdinki will also be joining us this afternoon to present the Houdinki story and growth strategy. As I mentioned earlier looking at the geographic split of our sales the US surpassed the UK in fiscal year 26 as our largest market by revenue reaching 51% of group share. Our group sales remain very much domestic driven 95% in fiscal year 26 with very little international business since VAT free shopping was removed in the UK following Brexit implementation in 2021. So altogether, FY26 was a record year for our group. Our revenue CAGR between fiscal year 15 and 26 is 15.5% and we saw adjusted EBIT increase despite the volatility in the year. Our balance sheet remains healthy, net debt reduced to 56 million during the year and a rookie was a robust 18 percent focusing on highlights from the US market fiscal year 26 constant currency growth increased to 24 percent with an acceleration during h2 to 27 percent growth was broad-based led by strong underlying demand a performance of Roberto coin ecom and pre-owned assure investments and contribution from the acquisition of Deutsch & Deutsch. We're pleased to have carried this good momentum into the new financial year. Key projects for the year included new watches of Switzerland and Minneapolis, two relocations in Georgia and Florida as well as three RobertoCoin monobrand boutiques. We've also developed our growth strategies and plans for RobertoCoin and Houdinki, which we will discuss further this afternoon. A bit more detail on our acquisition of Deutsch & Deutsch. We have adopted a new acquisition model here, which sees the former owners, the Deutsch family, retain a 12% ownership, something we believe works well from all perspectives. We're pleased to have Tad and Alader Deutsch remaining in the leadership of the business. They are great operators and bring fantastic local knowledge of the market and long-standing client relationships. The integration has been very positive and we are delighted to have added 60 Deutsch & Deutsch colleagues to our team. Turning to the UK, growth in fiscal year 26 was solid at plus 5% which was a good result against a somewhat subdued market backdrop. Trading Everything improved over the course of the year and we believe the market is now showing encouraging signs of improvement which is great to see. We completed seven key projects during the year. Highlights include the expansion and refurbishment of Mappin and Webb in Birmingham and refurbishment of the first ever Rolex agency in the UK, Northern Goldsmith in Newcastle. We had our first full year of trading at Rolex Old Bond Street having opened at the end of fiscal year 25. The showroom performed brilliantly ahead of plan with strong client feedback including a very high NPS of 93. We have taken the learnings from this great client experience and included these learnings in all of our training programs. With that I'll hand over to Anders to talk through the financials in more detail.

Thank you Brian. FY26 delivered a record year of sales and strong momentum in the u.s market and a robust uk performance sales came in at 1.828 billion or plus 13 percent at constant currency versus last year the sales growth was driven by the u.s market with growth of 25 percent in constant currency our adjusted ebit came in at 155 million versus 150 million in fy25 or plus six percent in constant currency with adjusted ebit margin of eight and a half percent down 60 basis points versus prior year our free cash flow was 162 million and return on capital employed was 18 on to the income statement this is presented on a pre-ifr16 basis and excludes exceptional items the reconciliations to the statutory numbers are included in the rns net sales was up 13 percent versus last year in constant currency or 11% at reported rates, driven by strong U.S. performance. Net product margin was 70 basis points down versus last year, reflecting adverse product mix and a reduction in brand margins due to U.S. tariffs and significant increases in gold prices. Our adjusted EBIT was 155 million, or plus 6%, compared to last year at constant currency, or 3% in reported. This gave an adjusted EBIT margin of 8.5%, down 60 basis points to last year due to the net margin decline as just mentioned and a one-off debt write-off in Roberto coin. This was partially offset by leveraging showroom costs and overhands. The effective tax rate was 26.7%, a reduction on last year, driven by a one-off tax credit on Roberto coin. Adjusted EPS came in at 45.2 pence, an increase of 9%. Looking at the breakdown of sales, the U.S. was the biggest growth driver. U.S. retail was up 25% in constant currency, with robust demand across brands and categories, supported by the expansion of our showroom network. We're pleased with the performance of RobertoCoin wholesale, with sales growth of 22% in constant currency. There's been a positive market response to the new products and the advertising campaign launched at the start of the year. Within our Mayas network, Roberto Coin sales more than doubled following upgraded shop-in-shop presentations. UK and Europe sales grew by 4%, with 5% UK growth excluding the closure of our European showrooms. Continued demand for luxury watches and improving momentum in luxury jewelry in the second half grew the growth. Across both markets, our e-com business continued to do well and grew by 21% in constant currency. Our pre-owned business grew by 22% in the year. Adjusted EBIT came in at 155 million or plus 6% on last year at constant currency. Adjusted EBIT margin was 8.5%, which was 60 basis points down to prior year due to product margin rate decline, partially offset by leverage of fixed cost. The US, including Roberto Coin Wholesale, is the major growth area. and 51% of group sales represents 62% of adjusted EBIT. U.S. retail had product margin contraction due to U.S. tariffs, but this was offset by leveraging of the cost base. The year was also impacted by investments behind our e-commerce business and Hodinkee. We expect these investments to start delivering benefits in FY27 and beyond. In the UK, product margin was impacted by adverse product mix with limited leverage on the cost base. We focused on cost control and store profitability and made good progress during the year. Roberto Coin Wholesale EBIT margin was impacted by one-off department store debtor write-off and the investment behind our marketing campaign with Dakota Johnson. Our balance sheet is strong. In the year we spent 39 million on acquisitions made up of our purchase of Deutsche Deutsche and the final payment for Roberto coin. Continued capital investments in our estate to elevate the network and drive future growth remains a key component of our growth strategy. Inventory levels were up two percent with continued improvement in underlying stock terms. Average unit cost of stock increased in the year, reflecting increased gold prices and U.S. tariffs. Underlying inventory was flat year on year, and the increase came from the acquisitions of Deutsche & Deutsche. As a reminder, inventory is a very low-risk asset in our category. We closed the year with a net debt position of 57 million. Our net debt to EBITDA leverage came out at 0.3 times. We continue to be highly cash generative. Our free cash flow for the year was 162 million with a cash flow conversion of 80%. Last year was adversely impacted due to an increase in working capital as a result of change in payment terms from some of our key suppliers. In Q1 we completed the announced 25 million share buyback program with 14 million spent during FY26. The full year net cash inflow was 38 million. Our guidance for FY27 is based on a 52-week trading period versus 53 weeks in FY26. It's also based on visibility of supply of key brands for the calendar year of 26. The guidance reflects confirmed showroom projects but excludes uncommitted capital projects and acquisitions. So we're guiding towards revenue growth in constant currency of between five and ten percent we expect our adjusted ebit margin percentage to expand by between 40 and 80 basis points and our capital expenditure for the year will be between 60 and 70 million with that i will now hand over to brian for some final remarks thanks anders so i'll just summarize before we open up the q a i'm extremely proud of the performance our teams delivered against what was a very complex and changeable operating backdrop.

We've made strong progress against each of our strategic pillars and we look forward to sharing a bit more detail on those this afternoon. We've started the new year well. Trading is encouraging in the first 10 weeks with continued strong momentum in the US and in the UK looking to have returned to more normalised growth market conditions. We confirm our previous guidance. just before we open up to q a if if i could ask you to focus your questions on fiscal year 26 performance and we will be more than happy to take questions on the broader strategy this afternoon operator can we please open up to your questions good afternoon everyone um and thank you for joining um we've got anders romberg our group cfo here um alongside david hurley our deputy ceo so please do feel free to add further questions into the the text box on screen but we'll begin

working through the the pre-submitted questions now so first one we have here what are the key drivers of revenue growth you expect over the next 12 to 24 months and how confident are you in achieving them how is the company managing demand for luxury watches amid changing consumer spending and economic uncertainty well you know we have our and i don't know how many of you i should say good afternoon first of all everybody um first of all uh we have our six strategic pillars and so they haven't changed in the last few years so showroom investment certified pre-owned

e-commerce luxury branded jewelry acquisitions and and client experience and i'll take each one of those just very very quickly you know we continue to have a strong pipeline of of showroom investments we've given the detail that we're going to be spending circa 60 to 70 million pounds on capital this year we've detailed out some of those projects but it includes projects like a new boutique in glasgow we've announced that we're going to be opening up a expanded rolex location in terminal 5 so that will open in 2027 in the us we've got our betterage greenwich store that's going to be opening this year we're also opening up an expanded location just outside of atlanta in a location called avalon or alpharetta it's about 30 minutes outside of atlanta and another store that we acquired just outside of philadelphia bernie robbins will end up expanding this year as well with both a watch of switzerland store and an america so we continue to have a strong pipeline of projects and and of course with our brand partners given the length of time that these projects take you know we're talking two years and three years out on the different projects that we uh that we have in terms of certified pre-owned we're really delighted with our progress on certified pre-owned it's gone from what was it 1.5 several years ago now to to north of of eight percent of our total watch sales we're targeting though we haven't put a timeline on it for it to get close to 10%. We have it in the majority of our showrooms today. We've still got four or five more showrooms in the UK where we're going to put Rolex certified pre-owned in. And now with the acquisition of Deutsch & Deutsch in the US, we'll be adding it in there. But there are still more showrooms where we'll be able to add in the other brands that we do pre-owned with. And, you know, we're delighted with the fact that as we add in these new categories that we're also attracting new clientele and we spoke on our capital markets today about the fact that you know 77 percent of the clients that have purchased a pre-owned timepiece from us over the last year are new to watches to Switzerland so there's a lot more that we can we can do in this in that area it it is a different clientele but it also requires different training and knowledge on the part of our teams and so we're continuing to up our training and tweak our training for for our showroom teams and we continue to do more and more events around pre-owned as well and of course we've you know as we get more and more well known for this then we're also having clients come in and specifically asking us to source product and that's something that we're able to do both in the UK and in the US having acquired analog shift we have that expertise. E-commerce continues to be very strong and grew strongly last year. In the UK obviously we've been at it for many years now and it's close to circa 10% of our overall UK business. If you look at just the brands that were able to retail online it's closer to 20%. The US is growing at a faster rate but off a very low base today. It's a slightly less than two percent but we want it to get uh closer to the uk number in terms of percentage of sales over a period of time but we haven't put a timeline on that but we have put in the investments in fy26 to support growing e-commerce in the us uh both in terms of structure and systems and of course the acquisition of hadinki also helps with that as well luxury branded jewelry we've said that's been a focus for some time number one that's led with with our acquisition of roberta coin we're two years in we're even more delighted with the acquisition now and excited about the future for the potential of that brand than we were when we acquired it we were working on that project for close to 18 months prior to announcing the acquisition and the reason why we spoke to Roberta Coyne and were interested in acquiring them was a they already had scale they were already very very well known in the United States and the other territories that we've taken the distribution rights and b we were seeing that they were becoming more and more productive in our own stores and point of fact in in case line they were sometimes doing more than shopping shops where we had some of our watch brands. So we've proven out in our own stores over the course of the last year that if we give it the appropriate space, that it can be a very successful brand. I think we were up over 120% in the year in our own showroom network and over 180% for where we put in shopping shops. So now we're taking that out to the other 400 points of distribution that we have across the U.S., with 17 store partners expanding prior to the end of January and another 30 in progress prior to the end of the calendar year. That's something that we'll be working on over the next few years. And then we have all the other areas that we can expand with RobertoCoin, both retail stores with three stores then, three more to go over the next 12 months. RobertoCoin.com, which is also part of our e-commerce strategy, the wholesale.com, so the Saxon names of the world, and obviously the international territories outside of the US such as Canada, Caribbean, and Mexico. And then the rest of our jewellery business is very strong and is growing well both in the UK where we've also introduced a lot of grown diamonds, and that's attracting again as we add new categories that are attracting new clients. and so that's been a great success in the UK and we've taken those learnings and we brought it to the US as well. We only launched lab-grown diamonds in the US a few weeks ago but it's off to a strong start and we see a lot of potential there. Acquisitions, obviously the last acquisition we've done is Deutsch & Deutsch. We had one of the two brothers, Tad, present at our capital market state. We're delighted with the acquisition as are Deutsch & Deutsch and again we see a lot of potential in terms of and we I think we've got a proven track record at this stage in terms of acquiring the business and over a period of time investing in and expanding that business and so they're close and to their clients and their pillars of their community they'll concentrate on the front of house activities and we'll take a lot of the back of house activities off them and And, of course, we can support them in terms of our strong brand relationships, brands that we carry that they don't carry today, and we like as well the format of this new acquisition where the two brothers remain as owners in the business and incentivized along with us to grow it, and we think that opens up the opportunity for further acquisitions of that type. And again, you know, a huge focus on client experience, on events, et cetera. We really do believe that that's a differentiator for us versus a lot of other retailers out And we're also able to, as we add in these categories, offer more things to our clients and in particular, our VVIP clients. So we're doing more and more events. We did over 250 events in the US last year, recently spending more time in the UK and the quality of the events that the teams do here are fantastic as well where we're learning from each other and these events have strong ROIs so focus on giving our clients one-of-a-kind experiences so there are six strategic pillars and we're really confident that we can execute against all of them over the next few years in terms of the changing dynamics on on the you know watches and and the demand out there I would say that demand continues to be very strong for the super high demand brands. No surprise there, that's continued throughout the time period that we've been owning this business, or sorry, part of this business. But I think the, you know, the UK, you know, is off to a positive start in the first 10 weeks of the year.

And we see with the US just the world creation that is there and the fact that the market is still not as well developed as the uk or europe there's still a huge potential uh for growth in that market great thank you um next question how would you expect the business to perform if the ai bubble were to burst i'm concerned the rallying ai stocks and the wealth created by ai related businesses may have artis artificially boosted demand for watches well clearly there is a correlation between wealth and demand in the u.s market more so maybe than in the uk here i think you know the interest rates and people's feeling of wealth in their properties

has a bigger impact actually the u.s market has had a good run in the in shares the wealth creation that we've seen over the last four or five years is around 40 trillion dollar which is an you know extraordinary amount swiss export data has not kept track with the wealth creation in the us and the market remains under penetrated within this luxury category versus other luxury categories and if you look at sort of where where it sits it's around 40 per capita consumption of this category versus what we have in the uk so so we believe that the market will continue to grow long term is it growing you know faster given sort of where the stock market is yeah potentially yeah i wouldn't you know hesitate to say that it's probably a factor when you had the stock market crash in 2008 in the us the market did take a big blow and it took a blow in the uk as well but not of the same magnitude so yes there is more of a correlation between equity prices and luxury goods in the us than what it is in the uk thank you next question would you characterize your guidance for the year as conservative based on the underlying fundamentals and your comments it's difficult to reconcile the expectation of around only five percent growth at the lower end of the range well first point to remind people of is that this is a 52 week year versus a 53 week year so so the the underlying growth is predicted to to be between seven and twelve percent uh yeah i mean listen uh of course we we had pricing come through uh more than what we've seen at a normal level last year and most of that pricing in you know we're going to analyze that in the second half of this year so we've been a bit cautious on that factor and we've had a long long run of really good market conditions in the us so so a bit of you know sort of the comps in the second half are a bit tougher than than in the first last year we had to rebuild inventory that we announced last year when we came out with our quarter one sort of comments which impacted the first half adversely last year but obviously this year we we don't have the same thing so so yeah and and are we you know conscious about you know sort of the world situation yes we are you know we we have a change of god here in the uk coming along uh which which could impact you know how people feel about things uh you never know uh we have the situation in the middle east which isn't directly impacting us but but clearly could drive you know cost of living up through energy prices and so forth so so we're a bit cautious uh so so if things brighten up and we have peace around in the world and you know the government doesn't do anything crazy yeah maybe it would be a bit conservative thank you uh one for you david are there any areas of america where

you think people still don't know the watches of switzerland brand well enough yes there are lots of areas in the u.s and so uh look at the reality is that we have uh uh strong uh areas like you You know, Miami, sorry, Florida, Georgia, where at least the group, True Mayors, is very, very well known. The New York metro area, I think we've done a very, very good job. And obviously, you know, Vegas, where we've got significant presence. The rest of the country, we've got pockets of stores in different locations. We've certainly proven we can open up stores in different locations around the U.S. and open them successfully. but yeah we believe there's a long runway for us to go in terms of growth again it comes back to the fact that they we still believe that the market's underdeveloped as as anders talked about the uh versus um you know the uk and there's a huge amount of growth uh still potentially there so yeah a lot of work still to do to grow the brand name we do believe that hedinki will help that as well you know they have an incredible amount of passionate horological experts and 25 million unique users and certainly there's a the vast majority of those of the people that visit their websites would not shop and watch Switzerland today hopefully a percentage will over time and we've obviously got plans in that area so there's a lot of work for us to to do and there's still white spaces out there in terms of of uh of uh new locations where we believe we can open up watches with some multi-brand stores we've only been in the us for you know a little bit more than eight years so so we're relatively new to the market still uh and we're building our geographical footprint the brand name is obviously to our advantage watches of switzerland what do they do?

I mean, we used to be called Oram Group, which nobody knew what it meant. So the name sort of is easy to get out there. And there is no confusion about what we do.

Thank you. Next question. Have you ever considered pursuing a US listing for the business?

It's not something that we've actively looked at. And the market cap of the company is fundamentally too small. As the presence of our business is expected, you know, to outpace the UK growth in the US, US is going to become a bigger proportion of the business at some stage, that might be a consideration, but not anything that we haven't, you know, we're on the radar at the moment.

Are customers still waiting months for the most popular Rolex models or are waiting lists finally coming down so i'm not going to just specifically talk about one brand but i would say that you know the registries of interest that we take for super high demand uh product that those uh those lists continue to grow and we work with all of our brands and with our clients obviously to try and satisfy them as quickly as possible but um yes for for and for the for those watches that are most in demand people definitely have to be patient and obviously we want to try to get to them as soon as possible but but it does take some significant period of time and i just want to make a correction in the question it's not months it's years so you know for ed but you know what i would also say to anybody that's interested in coming in into our stores that we are still you know trying to balance that with bringing new clients in so you know we're trying to make sure that again across the broad range of brands that we have because you know it isn't just uh one brand we have many brands that have either very strong demand for all of their product or for particular product we want to make sure that you know at least over 30 percent of that goes to new clients so we continue to add to our client base so um yeah thank you next question would you say that

the company is better positioned than it was in 2021 i'm just wondering why the market doesn't appear to properly reflect the progress you've made the company is larger more profitable and has now returned to growth well it's a good question uh so so obviously you know we we had the the booker transaction come through and and which spooked some investors and had an impact on our multiple and how people viewed the risk profile uh in spite of which you know rolex confirmed the rns that we issued back then and it was repeated by sean fredder for the ceo at the dubai watch week and back in the fall so so their behavior hasn't changed at all but it's all you perception by by the market i would say so so that had an impact on our multiple and we also had a profit warning uh in in early 24 after which we've delivered four reporting cycles uh where we've always met or beat our number so i think the the sort of turning point is behind us now and confidence is starting to rebuild so so we'll see where it all goes thank you um pre-owned feels like a really exciting market could that eventually become just as important as selling brand new watches i i don't i honestly don't know i don't think so i think that the the reality is

it's it will be you know we've said that we think we'll get up to 10 of our business and and that's that's what we stick with at the moment we made that prediction pretty early on to be honest after after we've gone into the certified pre-owned business but but you know we do believe over the next few years it's going to continue to grow uh faster than the rest of our watch business um and again as we said it's attracting new clients it's it's generally at a at a higher price uh based on the product that we carry and it also allows us to offer products to our clients that has been discontinued so uh it's a big focus for us but no i don't see it becoming bigger than the newer business.

Thank you. Is there another watch brand relative to Rolex that you think could become as important to the business over the next five years?

I would say that, you know, Rolex is an incredible brand, incredible partner, and no, I don't think so, but what I would say is that, you know, what we're able to offer our customers is that multi brand experience we've probably got the largest selection of watch brands out there in the world uh and that's something we're very very proud of and we're proud of the fact that we have to offer you know time pieces from you know a thousand dollars up to you know well north of a million so and what we're doing is i i think we're continuing to develop a very very healthy business in terms of the breadth of the sales across all of those price points and categories so whether it's You know, there are, you know, whether it's Rolex or Patek or strategic partner brands like Cartier, Omega, Breitling, Tank and Tudor, true to, you know, independent brands that again, attract collectors like MB&F or HMOS or Obové, down to the more accessible price points like Auris and Longines that's performing very strongly. So, no, we're focused on making every brand that we have in our business work, but in In terms of share of our business, no, I don't see any other brand in the next few years coming close to that.

Thank you. One for you, Anders. Could you explain your logic for splitting maintenance and expansionary capex in the free cash flow calculation? Specifically a maintenance capex of £3 million or roughly £15k per store seems low.

Can you elaborate on how you arrived at that figure and how you think about it? well obviously expansionary capex is something that is discretionary and so maintenance gap is there to to to keep the stores going uh that that's how we classify it uh and and so in other words capex that we spend to reconfigure stores or you know to expand stores is by choice and not necessity.

Thank you. What value do you see Hadinki bringing to the group?

I mean, a huge amount of value in a whole series of different ways. Number one, first of all, we always had huge respect for Hadinki when we came into the US market. You know, the US market had been kind of under-invested like it would be fair to say by most retailers and brands from kind of 2008 onwards in fact the only thing of note that had happened in that time period prior to us coming in in 2017 was a dinky get informed by uh by ben climber so i think it adds to our overall credibility as as a as a serious watch player across all brands and price points number one number two you know the reality is that they do have huge traffic they're completely editorially independent and so and we we keep that we don't know what they're going to write about we've reinvested in their editorial team and if you want if you saw our capital markets today you'll see that even watch and wonders which is effectively their super bowl that their viewing figures were up over 60 which is incredible in the days of everybody being worried about uh ai and so you know we're working closely with them we do believe that hadinki can help to drive our e-commerce business uh in a number of different ways we're investing uh significantly in their india dinky app and now you're able to you know to get editorial selections from you know the different writers within Hidinki so James Stacey's picks Ben Clymer's picks and you can go directly to our website and purchase them we're helping to support Hidinki in terms of the limited editions because we're able to get even bigger better limited editions if we're able to sell them in our stores as well so we're working on a pipeline of limited editions over the next two to three years and again we help that we think that that will drive both our online business as well as our in-store business. And of course, we're doing a lot of events with the Hit Inky team in our stores, both in the US and we've done a couple in the UK. And it can help both the US and the UK business. We think about 10% of their followers are based here in the UK. We did an event several months ago here with Ben Clymer. And he sent out one Instagram post and 30 minutes later we had to shut it down because 400 people had RSV beat and the vast majority of those clients that came to see him in our watch of the Switzerland store in London had never been in the watch of Switzerland store before so we still think there's a lot more that we can do to introduce the Hadinki clients to our store network in a subtle way and given the affinity and the loyalty that they have to the Hadinki brand if they end up becoming customers of the overall group then we think that would be fantastic great thank you um if luxury spending does slow down where do you

think watch the switzerland would feel it first i guess in terms of market category i i think you know obviously half of our business we don't necessarily is going to change in profile within the foreseeable future and that's the part of our business that's driven more by supply than demand actually uh in in other sectors you know when we experienced what happened here in the uk which was a bit of a surprise and hopefully you know our brand partners have learned a bit from that is when they went a little bit overboard on pricing and ranging uh that that you know a bit of insensitivity towards price elasticity i i think if a slowdown in luxury demand is is sort of a lot you know connected to that behavior it's really hard to see how we can get get that done i think they've learned a few lessons uh from what they went through and i think luxury players in general have learned a bit and because there was a bit of greed in the post-covid amongst a lot of luxury players you know they're not just in our category but across the board everybody would have heard about what chanel and others did which had a you know backlash from their consumer base as well So, so, yeah, I think, you know, as long as the brands are stay in tune with the consumers, I think the category, you know, which is a discretionary category, of course, nobody needs to watch, you know, your iPhone is going to tell you time more accurately. It is a symbol of success and an accessory. So, so it comes down to how well the brands actually can read the consumer, I think.

And I think we have, again, it's another one of the reasons why, particularly in the US, you've got a huge group of people, younger demographic that are interested in horology. We're continuing to add to our client base. We're continuing to make sure, as I said, that a significant percentage of the product, the high demand product goes to new clients. So we're not dependent on just one small group. thank you um would you say luxury watch brands are becoming more selective about who they want to sell their products i look ultimately at the at the end of the day um the the luxury brands sell the product to you know to retailers like us and we're the people that that make that choice And so we're trying to broaden our customer base as much as possible. So no, I don't think that's the case.

I think also kind of in terms of the authorised dealer, I think maybe that was what the customer was getting at in terms of the retail.

Of course, you know, thank you for that Alison. So of course, you know, the retailers certainly want to make sure that it is going through authorised channels, that their clients are getting the best possible experience. um that the retailers are doing the right thing by by the brand and by the consumer and and i think that's where we can play a you know a great role as well you know as part of a public company being a public company we have certain responsibilities we're audited to death as our ceo likes to to say and so i think we can be trusted uh as much as as any retailer out there in terms of doing the right thing by the brand and then doing the right thing by the the customer and i think maybe you may see a trend of more brands going down the authorized certified pre-owned model as well because again that you know it's it's part of their brand even if it's getting sold on the secondary market and i think brands want to make sure that again that's done in an appropriate fashion and that the you know all of the product is using uh authorized parts has been serviced appropriately etc so in that regard yes i think you know that you know all of the brands have selective distribution agreements they approve every agency that we open we're very fortunate that we've got very strong relationships with our brand partners but yes of course if we if we started abusing that in any way or any other retailer did then we would lose those agencies

pretty sharpish and the requirements from the brands keeps on getting you know sort of upped all the time so the latest topic on the list is now nowadays about cyber security and obviously we we as being you know sort of a big organization are well equipped in that space whereas a lot of the independents probably don't know what we're talking about so so so that there is sort of a pressure coming from the brands about how we as distributor handle the client data how we handle the client interactions and so forth which is just going in one direction and it's getting tighter and tighter thank you um next question america seems to be doing the heavy

lifting on the growth front i think at the moment is there still plenty of room to grow in that market or are you starting to have reached the easier wins already again probably refer back to the answers from earlier in some ways to say um no we well i think it's all been heavy lifting i've been out there for the majority of the time and the teams are pretty busy look we we were really delighted with our progress in the us as andrew said we're like nine years old there we believe there's a lot more that can be done we continue to strengthen our teams and invest behind the teams which is something i think that is is really good we're investing for growth so whether it's investing you know over the last year in our e-commerce team in changing out systems investing in Hedinki, investing in their editorial teams, investing in new senior management teams there as well. We've got a new overall head of the US business, new head of finance, new head of marketing, so we're bringing in a lot of strength in order to ensure that we can continue to grow. We certainly believe that there's a lot more that we can do and we haven't mentioned Roberto Coyne as of yet, apart from just in terms of the start from the six growth pillars, but we're investing behind that brand as well and we're starting to see you know we believe roberto coin will grow at a faster rate uh than the rest of the us business over over the next few years so you know a lot done but a lot more to do and then anders um would you rather keep investing for growth or are we getting close to a stage where returning more cash to shareholders becomes the priority no i think it's pretty clear in our capital allocation you know posing what what what is our priorities and the priority is always going to be to make sure that our network

is up to par and standard so investment in our showrooms and in white space locations that we can identify the second priority is always going to be acquisitions if we can't you know deploy the cash that we generate in those two growth pillars then for sure we are going to do buybacks and hand it back to you guys so so so no questions asked and it's you know a good thing to keep an eye on is a rookie and so so we want to keep our rookie north of 18 and obviously sitting on too much cash will suppress that so so that's a good good metric to if you guys want to you know sort of try to identify when we're going to do it keep an eye on that one and maybe just following on

from that so the group has a number of relatively new growth drivers uh including um deutsch and Deutsch and Hedinke, any of these priority areas for investment, and if so, why?

Yeah, I think in the case of D&D, there will be some investments made there. We can bring in new brands, as David had alluded to earlier, that's one area. You know, one of the stores we might look at a relocation of, so we'll see. but but yeah a bit of capital is required not not anything material one of the key findings which is also something that we get when we do this acquisitions is obviously best practice so we always look at our processes and see if there's anything we can learn as a company and in the case of dmd they had a couple of really good architects that was working with them and and we've actually assigned them to one of our projects within the wider group to see what they can do so so yeah I think there's, and again, as we said, you know, we're investing behind the Hadinki app, and we've invested in the team, we've invested in bringing in more resources into the editorial, and I think people are seeing that in terms of the Hadinki followers, in terms of the quality of the writing and more content, and I think we're seeing that in the results as well in terms of the followers.

great um and then where do you see the gaps between roberto coin and a brand like david yeoman what needs to be done to close this gap to put roberto coin at a similar scale well first of all i would say that the german have done an incredible job and we carry david german both here in the uk and in the us so a huge amount of respect for for what they've done um as a team uh so what i would say about roberto coin is that you know when when you look at a lot of the uh distribution that we're in in the us um the two major brands would either be david yerman or or then roberto coin we probably you know can and that's what we're doing now is we're going to continue to invest behind the brand and all of the different areas that that also david german invested in so uh investing in rolling out more shopping shops with our with our wholesale partners and investing in the online component of the business for workerpoint.com investing in mono brands we've opened up the first three mono brands and we've got uh we've got more to follow but i mean then you know we again as we said we can learn plenty from david german they've done an incredible job and and you know i think you'd prefer to say my background andrew's background and brian's background is it's quite a lot of that has been based on wholesale as well we've worked for ralph lauren for a number of years so we believe all of the fundamentals of the brand are there so great product great sales team and

we just need to invest behind it and elevate the brand across all of the distribution points in north america i think one one distinction between the two is that david german has a very you know sort of consistent look and feel wherever you go and have a look at it they manage to secure the space that is required to show their product collection in a very consistent manner which is part of the success and on the contrary you know sort of Roberto has been designing fabulous products for 30 years but essentially allowed each you know retailer to pick and choose products as they feel, you know, suits their store and then cram them into a small counter. So the first step in this process is, as we've said, demonstrate that it works in Shop&Shop, go out, expand the space, make sure that we merchandise the product relative consistency with adaptation, of course, for the local market. But that consistency is something that is required in order to build the brand, a la David Ureman. In the department store space, if you go in and have a look, David Ureman is always the prominent brand in those locations. And Roberto Coyle looks okay, but clearly could do with some additional space, as I said. So, yeah, I think we know what we need to do.

Great, thank you.

That is all of the questions that we have had submitted. so uh maybe hand back um if you have any closing remarks no thank you all for joining today and you know we we as we said before you know we we're very pleased with what we see in the market and and where we sit today uh we we we have a long way left to go in the year and we'll keep you guys posted thank you