A Business Built on
Delivering Excellence
ANNUAL REPORT AND ACCOUNTS 2024
2
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT
02 At a Glance
03 Financial Highlights
04 Our Investment Case
08 Chair's Statement
10 Chief Executive Officer's Review
14 Market Review
26 Our Business Model
28 Our Brand Partnerships
34 Our Strategy
38 Our Strategy in Action
52 Key Performance Indicators
56 Financial Review
62 Non-Financial and Sustainability
Information Statement
63 Section 172(1) Statement
66 Environmental, Social and Governance
130 Risk Management
134 Principal Risks and Uncertainties
140 Going Concern and Viability Statement
Entering FY25 with cautious optimism
We made strong strategic progress during the year, despite the challenging market
conditions in the UK and we continued to gain market share in our key markets.
The categories we operate in continue to provide us with significant growth
opportunities. Demand continues to exceed supply for key luxury watch brands, and the
performance of the pre-owned luxury watch category, supported by Rolex Certified
Pre-Owned, has exceeded expectations.
We made significant investments in our showrooms during the year, including opening 22 and
refurbishing 15 showrooms, whilst also acquiring 15 luxury watch Ernest Jones showrooms.
The inherent strength of the luxury watch categories we operate in, coupled with our
superior business model and retail expertise continues to set us apart. We remain
focused on executing our Long Range Plan, with targets to more than double sales
andAdjusted EBIT by the end of FY28.
CORPORATE GOVERNANCE REPORT
144 Corporate Governance at a Glance
146 Chair’s Introduction
148 Board of Directors
150 Corporate Governance Statement
151 Governance Framework
153 Governance in Action
154 Board Key Areas of Focus
161 Board Evaluation
162 Nomination Committee Report
165 Audit & Risk Committee Report
171 ESG Committee Report
176 Remuneration Committee Report
Fairness, Diversity and Wider
WorkforceConsiderations
Directors Remuneration Report
at a Glance
Summary Remuneration Policy
Annual Report on Remuneration
192 Directors’ Report
FINANCIAL STATEMENTS
200 Independent Auditor’s Report
206 Consolidated Income Statement
207 Consolidated Statement of
ComprehensiveIncome
208 Consolidated Balance Sheet
209 Consolidated Statement of Changes
inEquity
210 Consolidated Statement of Cash Flows
211 Notes to the Consolidated Financial
Statements
248 Company Balance Sheet
249 Company Statement of Changes in Equity
250 Notes to the Company Financial Statements
254 Glossary
258 Shareholder Information
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
A Year of
Strategic Progress
AT A GLANCE
The Watches of Switzerland Group is an international retailer of world leading luxury
watch brands with a growing complement of luxury jewellery brands.
The Watches of Switzerland Group provides clients with the finest selection of luxury timepieces from all of the
major groups and independent brands together with an impressive presentation of smaller independent brands.
ABOUT US
WELL-INVESTED SHOWROOM NETWORK
158
UK SHOWROOMS
AT28APRIL2024
56
US SHOWROOMS
AT 28APRIL 2024
223
TOTAL SHOWROOMS
AT 28APRIL 2024
2,900+
NUMBER OF COLLEAGUES
AT 28APRIL 2024
OUR SHOWROOMS
ONLINE TRAVEL RETAIL
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
US
UK and
Europe
55%
45%
0
200
400
600
800
1,000
1,200
1,400
1, 600
£m
FY17FY16 FY19FY18 FY20 FY21 FY22 FY23 FY24
CAGR 6%Growth in sales 237%
1,538
1,238
1,543
905
811
774
687
568
456
0
30
60
90
120
150
180
0%
2%
4%
6%
8%
10%
12%
FY17FY16 FY19FY18 FY20 FY21
Adjusted EBIT
1
Adjusted EBIT%
1
FY22 FY23 FY24
£m
Growth in
Adjusted EBIT
648%
135
130
165
78
56
45
43
34
18
Services/other
Luxury
jewellery
2
Luxury
watches
2
87%
7%
6%
FINANCIAL HIGHLIGHTS
SALES BY REGION (%)
1 This is an Alternative Performance Measure. Refer to the Glossary on pages 254 to 257 for definition
and reconciliation to statutory measures where relevant.
2 Please refer to the Glossary on pages 254 to 257 for a definition.
HISTORICAL SALES PERFORMANCE PROFITABILITY AND LEVERAGE
OUR BRAND PARTNERSHIPS
SALES BY CATEGORY (%)
REVENUE
£,m
CHANGE VS FY23 (AT CONSTANT
CURRENCY)
1
:
+%
RETURN ON CAPITAL EMPLOYED
1
.%
CHANGE VS FY23:
-bps
ADJUSTED EBIT
1
£m
CHANGE VS FY23:
-%
OPERATING PROFIT
£m
CHANGE VS FY23:
-%
3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Proven track record of delivering a
strong financial performance with
robust sales, sustained profitable growth,
elevated returns on capital employed
and strong cash generation.
Long-standing, collaborative
partnerships with the most prestigious
and recognised luxury watch and
jewellery brands.
Well-invested showrooms providing an
exceptional client experience through
welcoming and expert service and
luxurious, contemporary, spacious
browsable environments.
Impactful marketing focused on digital
communications, Client Relationship
Management (CRM), client experience
events and co-operative activity with
brand partners.
Multi-channel specialist operating in
markets with high barriers to entry,
luxury watch demand, proven value
creation and supply-driven dynamics.
National coverage in the UK,
a significant growing presence
in the US.
Fully integrated SAP based IT systems
supporting all showrooms and websites
in the UK and US.
Investing in a more sustainable
futurethrough strategic ESG pillars:
People, Planet and Product.
KEY REASONS TO INVEST
OUR INVESTMENT CASE
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Proven track record of delivering a
strong financial performance with
robust sales, sustained profitable growth,
elevated returns on capital employed
and strong cash generation.
Long-standing, collaborative
partnerships with the most prestigious
and recognised luxury watch and
jewellery brands.
Well-invested showrooms providing an
exceptional client experience through
welcoming and expert service and
luxurious, contemporary, spacious
browsable environments.
Impactful marketing focused on digital
communications, Client Relationship
Management (CRM), client experience
events and co-operative activity with
brand partners.
Multi-channel specialist operating in
markets with high barriers to entry,
luxury watch demand, proven value
creation and supply-driven dynamics.
National coverage in the UK,
a significant growing presence
in the US.
Fully integrated SAP based IT systems
supporting all showrooms and websites
in the UK and US.
Investing in a more sustainable
futurethrough strategic ESG pillars:
People, Planet and Product.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CONTENTS
08 Chair's Statement
10 Chief Executive Officer's Review
14 Market Review
26 Our Business Model
28 Our Brand Partnerships
34 Our Strategy
38 Our Strategy in Action
52 Key Performance Indicators
56 Financial Review
62 Non-Financial and Sustainability
Information Statement
63 Section 172(1) Statement
66 Environmental, Social and Governance
130 Risk Management
134 Principal Risks and Uncertainties
140 Going Concern and Viability Statement
1
ST R ATEGIC
REPORT
7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CHAIR’S STATEMENT
This has been a good year for the Group despite a more
challenging macroeconomic environment in the second
half of FY24. Our US business continues to perform
strongly with double digit revenue growth in constant
currency whilst in the UK, where the market has been
tougher and sales have declined, we continue to gain
market share due to the strength of our differentiated
business model. 2024 also sees the start of our celebrations
for the centenary of the Watches of Switzerland brand, a
testament to our longstanding heritage and expertise
within the luxury watch market.
We continue to pursue our high-quality growth strategy
through a combination of targeted capital investment in
showrooms, and selective acquisitions. During FY24, we
opened 22 showrooms, with highlights including the Rolex
and Cartier anchored Watches of Switzerland in American
Dream, New Jersey and Watches of Switzerland, One
Vanderbilt, New York. Additionally, the significant elevation
of our existing portfolio of showrooms continued in both
the UK and US with 15 projects completed, including the
launch of our Mappin & Webb contemporary design. We
would also like to welcome our new colleagues from the
showrooms we acquired from Ernest Jones in the year.
We were excited to be one of the first to offer Rolex
Certified Pre-Owned, which launched in July 2023 in the US
followed, shortly afterwards, in the UK in September 2023.
Trading has been very encouraging, and this programme has
introduced a new client base for this product. During FY25,
we will expand this offering across Rolex agency network in
the UK and US and elevate the in-store presence of pre-
owned product. We believe pre-owned will be a strong
driver of growth for the Group.
The acquisition of Roberto Coin Inc. post year-end,
accelerates our luxury branded jewellery strategy. Roberto
Coin is a globally renowned brand, with a particularly strong
position in the North American market and has high-quality,
exquisite designs. We will apply our proven elevation strategy
in retail and luxury to the Roberto Coin brand across the US,
Canada, Central America and the Caribbean. We are looking
forward to working with our new colleagues in expanding
the business further.
We are known for our best-in-class client experience and our
continual pursuit of further elevating the luxury experience
for our clients. This year we focused on embedding Xenia,
our elevated Client Experience Programme, across our
broader organisation, including Support Centres. Based on
the excellent feedback we have received to date from clients,
the programme continues to impress and differentiate us
from our competitors.
SUSTAINABILITY
During the year we have further delivered on our ESG pillars
of People, Planet and Product, with a real focus on the
circular economy. We successfully expanded our repairs and
servicing capacity which included an additional facility based
in Leicester.
We are proud to have been accredited as a Living Wage
Employer in the UK and we continue to receive strong
colleague engagement scores across our business.
GOVERNANCE
We continue to make advances in relation to diversity and
inclusion in the boardroom, with senior management, and
throughout the organisation. The Group not only meets the
recommendations of the FTSE Women Leaders Review but
was ranked 10th within the FTSE 250 Women Leaders
Review. We also maintained the recommendations of the
Parker Review for the Board.
LOOKING AHEAD
We enter FY25 in a position of strength, one in which we
continue to invest in our proven model and gain market
share. We have an exciting pipeline of showroom projects,
including the flagship Rolex boutique on Old Bond Street,
London and I am confident that through our proven and
distinctive business model we are well positioned to deliver
sustained growth.
I want to personally thank Brian, our executive team and
colleagues throughout the organisation for their hard work
and dedication, as well as my fellow Board members for their
active role in supporting the work of the team.
I would also like to take this opportunity to thank you, our
shareholders, for your continued support.
IAN CARTER
CHAIR
26 June 2024
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
CHIEF EXECUTIVE OFFICER’S REVIEW
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
“I am proud of the performance that our team has
delivered this year in what was undoubtedly a more
challenging market.”
BRIAN DUFFY
CEO
FY24 was a more challenging year for the Group, but
despite this we delivered revenue growth of +2% in constant
currency. Profitability was impacted by the lack of leverage
and the headwinds of Interest Free Credit costs. Our US
performance was particularly strong, at +11% in constant
currency, demonstrating the strength and opportunity of
the US market. In both the UK and US markets we have
been pleased to see growth in our Registration of Interest
lists for key products in limited supply.
The macro-economic backdrop in the UK resulted in a more
unpredictable year for the Group, and sales in the UK and
Europe declined -5% year on year. The UK luxury watch
market is going through a period of normalisation following
the COVID boom, where consumers had more disposal
income to spend on watches and jewellery. High inflation and
interest rates resulted in increased cost-of-living for the UK
consumer and this coupled with significant price increases,
mainly due to the strength of the Swiss Franc, from luxury
watch brands meant that the aspirational customer was
more squeezed and inclined to defer purchases. The UK
market is now almost entirely domestic, following the
withdrawal of VAT free shopping for tourists following
Brexit, resulting in very low levels of overseas shoppers.
In both the US and the UK we have continued to gain market
share, driven by our proven, differentiated business model
which sets us apart in the industry. We have continued to
drive high quality growth including showroom enhancement,
strategic acquisitions and building infrastructure across our
markets but particularly in our US business, which now
makes up 45% of Group sales.
As outlined in our Long Range Plan, luxury branded jewellery
has become a key part of our strategy for growth. We have
built strategic partnerships defined at the Global level to
support our ambitious growth plans. We are continuing to
add prestigious luxury jewellery brands to our portfolio,
including David Yurman, Pomellato, FRED, Repossi, Pasquale
Bruni and Faberge. In addition we are expanding key existing
brands within our portfolio of Roberto Coin, Chopard,
Messika and Fope.
We have also made significant progress with our Mappin &
Webb luxury jewellery boutique in Manchester, which opens
in FY25 and includes the first DeBeers mono-brand boutique
in the UK outside of London.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Post year end, we completed our acquisition of Roberto
Coin Inc. – the exclusive North American distributor of
Roberto Coin – dramatically accelerating our luxury jewellery
branded strategy, and we see enormous potential in bringing
together this iconic brand with our retailing expertise and
resources. Going forward we will work with our new retail
partners to improve the point-of-sale experience through
shop-in-shop design, develop mono-brand retailing and
invest in online and marketing.
This year saw the launch of the Rolex Certified Pre-Owned
programme and we are highly encouraged by the extremely
strong performance. During FY25 we will continue to roll
this out to further locations and we expect that our sales will
benefit from dedicated shop-in-shop formats, window
displays and increased marketing. Pre-owned sales of other
brands also performed well and we are extending this
offering in our showroom portfolio in FY25.
Over the year, we have continued to invest for high quality
growth across showroom projects and strategic acquisitions,
whilst building resources and infrastructure within our US
business. We have made excellent progress on our
showroom expansion and refurbishment programme, with
22 new showrooms opened and 15 refurbished. Our
showroom design is a key part of our client appeal, where we
focus on welcoming, browsable, modern showrooms. In the
US we opened two multi-brand showrooms in American
Dream, New Jersey and One Vanderbilt, New York. We also
relocated our Mayors Dadeland, Florida showroom and
expanded the Rolex Millenia mono-brand boutique, Orlando,
Florida. In the UK, we continued our roll out of the
Goldsmiths Luxury concept with seven showrooms either
expanded or refurbished including some of our larger
showrooms such as Liverpool, Birmingham Bullring and
Manchester Trafford Centre. We expanded our new Mappin
& Webb contemporary concept with refurbishments of
Glasgow, York, Guernsey and Bluewater. This new concept
modernises the showroom environment, whilst maintaining
the sense of heritage with the Mappin & Webb brand. We
also completed the major expansion of the Patek Philippe
space in Watches of Switzerland 155 Regents Street, London.
We are excited about the strong pipeline of showroom
projects we have planned in FY25, including the flagship
Rolex boutique on Old Bond Street, London, Audemars
Piguet Townhouse, Manchester, introduction of Rolex into
Watches of Switzerland Plano, Texas and relocations of
Mayors Tampa, St Johns and Sarasota, Florida and expansion
of Betteridge Vail, Colorado. We have also recently secured
the conversion of our existing multi-brand Mayors Lenox,
Atlanta into a Rolex mono-brand boutique, which will open
in FY25 and are expanding the Patek Philippe space in
Betteridge Greenwich, Connecticut.
In November 2023, we completed the acquisition of 15
luxury watch showrooms from Ernest Jones. The rebranding,
colleague training and system conversions are now complete,
and these showrooms are trading in line with our expectations.
One of our key strengths is client experience, which is
underpinned by our ‘Xenia’ client service programme. Xenia
is heart of everything that we do and is based on three pillars
Know Me; WOW Me; Remember Me. This year we have
maintained our focus on embedding these fundamental
pillars across our showrooms and online proposition. We
also recognise that client service goes beyond our external
clients, and this year we started to embed Xenia into our
Support Centre, driving client service at the centre of all
stakeholder interactions.
Our partnerships with the most recognised and prestigious
luxury watch brands have continued to strengthen
throughout FY24. In 2024, Watches of Switzerland celebrates
its centenary year and with it we have showcased a number
of exclusive products with key brands such as Cartier,
Girard-Perregaux and BVLGARI.
We were delighted to host a Grand Prix d’Horologie De
Genève (GPHG) exhibition in New York at our Soho flagship
for the second year running. This event, which took place in
October 2023, aimed to highlight the most remarkable
contemporary watch designs in the world, while celebrating
horology culture and excellence.
In April 2024, we secured a three-year partnership with
Académie Hologère des Créateurs Indépendants (AHCI),
which exists to preserve traditional watchmaking, support
talented watch makers and promote quality, innovation and
creativity. This non-profit organisation provides watchmaking’s
rising stars with a platform, as well as support and guidance,
as they hone their craft and begin their careers.
In February 2024, we commenced our new partnership with
American Express Centurion in the US, which offers an
exclusive concierge programme to US Centurion members.
The partnership was celebrated with a launch party at the
Amex Centurion Club at One Vanderbilt, New York.
12
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CHIEF EXECUTIVE OFFICER’S REVIEW
continued
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
We have continued to stay true to our ESG pillars of
people,planet and product throughout FY24. Highlights during
the year include:
– Expanded our repairs and servicing capacity in the UK and
US as part of our focus on the circular economy. This has
doubled watchmaking capability in the UK. We also
increased our circularity KPI of the number of watches of
repaired, serviced or resold as a percentage of new watch
sales to 46% from 44% in the prior year
– UK accredited as Real Living Wage Employer
– Met the recommendations of the FTSE Women Leaders
Review and ranked number 10 for the FTSE 250
– Maintained the recommendations for the Parker Review
for the Board
– Improved our CDP Climate Change score year-on-year
from a ‘C’ to a ‘B’
– Launched a colleague incentive to encourage and reward
eco-friendly behaviours
– Mappin & Webb named as CSR Jewellery Retailer of the
Year in the 2023 Professional Jeweller Awards
– £7.5 million to date donated to The Watches of
Switzerland Group Foundation, the aim of which is to
provide essential support to charities located in the
communities in which we operate, focusing on poverty,
the advancement of education and relief to those in need
– We have strengthened our relationship with the Prince’s
Trust and the Group was the headline sponsor for the
Prince’s Trust Palace to Palace Bike Ride for the second year
– Linked our existing loan facility to the achievement of our
near-term science-based emission reduction targets and
circularity goals
LONG RANGE PLAN
Looking forward, we remain confident in the LRP targets to
more than double sales and Adjusted EBIT by the end of FY28,
from an FY23 base. Going into FY25, we have the strongest
ever pipeline of committed Rolex and other key brand
projects through to FY28. The initial performance of Rolex
Certified Pre-Owned has been ahead of our expectations,
and we expect Rolex Certified Pre-Owned to outperform
the targets previously outlined in the LRP in November 2023.
The recent acquisition of Roberto Coin Inc. will spearhead our
luxury branded jewellery strategy and we see further potential
above and beyond what was incorporated in our LRP.
In line with our disciplined approach to capital allocation and
given the pipeline of high ROI opportunities in the UK and
US, we have announced our intention to reallocate investment
from the European market into these higher returning regions
over the period of the LRP. We are in negotiations with our
brand partners for the transfer of our existing European
mono-brand boutiques. The additional growth from Rolex
Certified Pre-Owned and Roberto Coin Inc., together with
acquisition opportunities in the US, is expected to offset the
reduction from European sales within the life of the LRP.
GUIDANCE FOR FY25
Following the more challenging trading conditions of FY24,
we are cautiously optimistic about trading in FY25. The
industry as a whole is more conservative on production given
the current volatility in the market, which we believe is a
responsible approach to the long-term growth trend of the
luxury watch market. Our FY25 guidance, as issued on 16
May 2024, projects full year revenue of between £1.67 and
£1.73 billion, reflecting constant currency sales growth of
9%-12%. We expect Adjusted EBIT margin expansion of
+0.2 to +0.6 percentage points from FY24. We will continue
to invest in our showroom portfolio, with a capex spend of
£60 – £70 million.
Given the strength of our model and continued investment
in the right areas for growth, I am confident that our business
can come out of a difficult trading period stronger and well
positioned to capitalise when the market conditions improve.
We believe fundamentally in the resilience and long-term
strength of the luxury watch and jewellery markets.
Finally, we have over 2,900 colleagues at the Watches of
Switzerland Group and I would like to thank all of them for
their continued hard work and dedication, which is definitely
the key to our success. I would also like to welcome our new
colleagues from Roberto Coin Inc. and look forward to
working with them on the future growth of this iconic brand.
BRIAN DUFFY
CHIEF EXECUTIVE OFFICER
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
SWISS CONCENTRATION
Limited threat from technology
or geography.
A UNIQUE MARKET
Led by the most prestigious global brands
focused on investment, product quality and
innovation and brand marketing, achieving a
higher average selling price than most luxury
consumer goods categories.
SUPPORTS A MORE CIRCULAR ECONOMY
High-quality mechanical luxury watches can be
passed down for generations, traded in or resold.
Most can be repaired indefinitely and many of the
materials they contain are recyclable.
DEMAND EXCEEDS SUPPLY FOR KEY BRANDS
The overall market demand for Swiss watches
exceeds production levels and supply. Clients are
required to ‘register interest’ for key products.
WHAT DIFFERENTIATES THE
LUXURY WATCH CATEGORY?
14
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
MARKET REVIEW
HIGH BARRIERS TO ENTRY
Strong brand partnerships are based on many
years of experience and category expertise.
Brands actively manage distribution through
Selective Distribution Agreements.
STRONG VALUE RETENTION
Rarity, heritage, craftsmanship and
precious materials support brand image
and value; some products considered
investment asset class.
LITTLE THREAT OF DIGITAL PUREPLAY DEVELOPMENT
Brands generally require prior showroom approval
as a prerequisite for online selling; multi-channel is a
preferred direction.
SPECIALIST CATEGORY
Specialist for both the manufacturer and the
retailer; consumers respond to expertise,
authority and heritage.
15
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
2009:
Exports to the UK
up +0.1% (in GBP)
2020:
12-weeks pandemic
lockdown in Switzerland
2011-13:
Chin/HK ule
2014-16:
Chin/HK correction
2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
CHF billion
Luxury Non-luxury
+4.5% (+4.4%
1
)
Total CAGR 2000 to 2023
+5.5% (+5.4%
1
)
Non-luxury CAGR 2000 to 2023
-2.0% (-2.3%
1
)
Luxury
2
CAGR 2000 to 2023
Source: Company information, Swiss Watch Federation statistics
0
5
10
15
20
30
25
1 CAGR shown through 2022
2 Luxury is defined as exports >CHF 500
(20)%
(15)%
(10)%
(5)%
0%
10%
15%
20%
vs 2023
USA
3%
15%
(1)%
7%
(1)%
(2)%
8%
9%
4%
(19)%
(18)%
UK EU China Hong Kong World
vs 2022
Source: Swiss Watch Federation
5%
(25)%
9%
THE LUXURY WATCH MARKET HAS A
STRONG TRACK RECORD OF GROWTH
MARKET REVIEW
continued
The Group estimates global retail sales of luxury watches were approximately
£50.8 billion in calendar year 2023 (2022: £44.1 billion). This is based on the
estimated retail value of Swiss luxury watches (Swiss exports and the Swiss
market), repairs and services and the contribution from non-Swiss luxury
watch brands.
Luxury watches have continued to be supported by long-term increases in
prices, with the average selling price (ASP) of Swiss watch exports (wholesale)
generating a 23-year CAGR of +5.5% (2023 vs 2000).
Watches at the luxury end of the market have outperformed lower priced
segments and represent 94% of the value of global Swiss watch exports in
calendar year 2023.
In recent years the US market has been leading in terms of Swiss watch exports
growth, as can be seen in the graph opposite. The UK market has seen a slight
decline in the first four months of 2024, but is significantly up on a two-year basis.
RESILIENT LONG-TERM GROWTH IN SWISS WATCH EXPORTS (CALENDAR YEARS)
SWISS WATCH EXPORTS (WRISTWATCHES
PRICED ABOVE 500 CHF) JANUARY TO MAY 2024
The luxury watch industry is well protected with high barriers to entry
and a track record of consistent long-term growth, underpinned by
sustained investment and elevated innovation.
16
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DISCIPLINED DISTRIBUTION MANAGEMENT
THROUGH SELECTIVE DISTRIBUTION AGREEMENTS
LOYAL, DIVERSE, MULTI-GENERATIONAL
CLIENT BASE
Distribution of luxury watches takes place under Selective Distribution Agreements,
strict legally binding contracts entered into with brands on a point-of-sale basis.
These are ordinarily limited by geography and ensure retailers maintain strict
presentation standards. Selective Distribution Agreements enable brands to manage
the number of points of sale and qualitative criteria on retailer approval. Product
presentation and client experience are closely monitored by the brand owners.
Globally, the retail market for luxury watches is fragmented, predominantly
comprised of a large volume of small retailers.
Luxury watches attract a set of shoppers, who can become repeat clients, spanning
age, income groups and genders. The internet has, over the years, had an increasingly
positive impact on digital and social media appealing to a younger market.
Our showroom design, location, marketing and the Group’s unique client service
appeals to a broad demographic audience.
Market trends have benefitted more recently from price increases and consumer
trends towards higher price point products.
For the total luxury watch industry, demand
has increased at a faster rate than
production, in part reflecting the labour-
intensive nature of watchmaking and its
dependence on highly skilled watchmakers
in Switzerland. Long-term growth has been
underpinned by increased ASP, positive mix
effects and limited volume increases.
Luxury watch brand owners are made up
of major independents, large groups and
smaller independents, as can be seen
opposite. Our Group provides the largest
selection of luxury watches covering a wide
range of prices and consumer preferences,
including the largest and best-known brands
alongside smaller independent brands.
We stock confidently, which provides our
clients with a greater width and depth of
availability. The table opposite shows the
breakdown of the Group’s brand partners.
GLOBAL BRANDS HAVE SUPPLY-DRIVEN GROWTH
Major
independents
Swatch Group Richemont LVMH
Source: Morgan Stanley, Sixth Annual Swiss Watcher (28 February 2024)
The graph below shows estimated 2023 calendar year global retail sales for the major Swiss watch brands.
Independents
17
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
UK Italy France Germany Benelux Spain Nordics US
60
80
0
20
40
2019
Source: Company estimates
2020 2021 2022 2023 Our key markets
MARKET REVIEW
continued
CONTINUOUS PRODUCT INNOVATION
AND ADVANCEMENT
GEOGRAPHICAL MARKETS
Luxury watches are characterised by a focus on product innovation and
advancement and are normally introduced at prestigious watch fairs in
Switzerland. In the UK and the US, there is a strong preference for sports
models with the key brands consistently investing to ensure the highest degree
of technical specifications.
This year we attended Watches and Wonders 2024, the largest watchmaking
gathering ever to take place in Geneva, where exciting new products were
launched, accompanied by relevant marketing support.
Watchmakers are making greater use of strap and dial combinations to increase
consumer interest.
The luxury watch industry is benefitting from greater flexibility over production and
reduced product development timeframes due to the advancements in 3D printing.
The Group operates in the UK and US markets, two of the major Swiss watch
markets. The following chart shows the luxury watch retail sales per capita over
the last five years.
On a per capita basis, the UK market has outperformed the US market and all
major European markets since 2000. The UK market has the highest per capita
retail spend by domestic clients on luxury watches; we believe the differential to
other markets reflects retail investment, not consumer behaviour, creating an
opportunity to successfully replicate our model in other geographies and building
on the success we have delivered in the US to date.
LUXURY WATCH PER CAPITA RETAIL SALES (US$)
18
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
19
Source: Swiss Watch Federation
1 CAGR shown through 2022.
46%
5%
8%
19%
22%
Watches of Switzerland Group
National groups
Independent jewellers
Luxury department stores
Corporate boutiques
2
46%
8%
5%
22%
Watches of Switzerland Group
National groups
Independent jewellers
Luxury department stores
Corporate boutiques
2
19%
Source: GFK
2 Directly operated by the brands.
2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2022 20232020
CHF 500-3,000 CHF 3,000+
1,400
200
600
400
1,200
1,000
800
0
CHF million
+7.8% (+7.8%
1
)
CAGR 2000 to 2010
CAGR 2000 to 2023
+5.6%
CAGR 2010 to 2023
+9.6% (+9.8%
1
)
The UK is the fifth largest market
globally for Swiss luxury watch
exports. The Group estimates retail
sales of luxury watches amounted to
£3.4 billion in calendar year 2023
(£2.9 billion in 2022).
The UK market remains a well-
invested multi-channel market and
highly engaged and sophisticated
domestic clientele which has typically
had a preference for the sports luxury
watch category.
In the period 2000 to 2023, Swiss
watch exports to the UK increased by
a CAGR of 7.8%. 2024 has started
slower, with UK Swiss watch exports
-1% year-on-year to April 2024.
The UK market is made up of national
groups, independent jewellers, luxury
department stores and boutiques
directly operated by the brands.
The UK market is led by Rolex, with
strong market positions of Patek
Philippe, OMEGA, Cartier, Breitling,
TAG Heuer and TUDOR.
UK MARKET HIGHLIGHTS
5
CALENDAR YEAR 2023
RANKING IN GLOBAL
MARKETS FOR SWISS
WATCH EXPORTS
£3.4bn
ESTIMATED 2023 LUXURY
WATCH RETAIL SALES
(2022:£2.9bn)
THE UK LUXURY WATCH MARKET
LUXURY SWISS WATCH EXPORTS TO THE UK (CALENDAR YEARS)
UK LUXURY WATCH MARKET 2023
Watches of Switzerland, Battersea Power Station, London
2 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
MARKET REVIEW
continued
Source: Swiss Watch Federation
1 CAGR shown through 2022.
2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019
2021
2022
2023
2020
CHF 500-3,000 CHF 3,000+
3,500
0
700
1,400
2,100
2,800
CHF million
+4.5% (+4.4%
1
)
CAGR 2000 to 2010
CAGR 2000 to 2023
-0.3%
CAGR 2010 to 2023
+8.4% (+8.4%
1
)
After a period of underinvestment in
the market leading up to 2018, the
US performed strongly and is today
the largest global market for Swiss
watch exports, overtaking China in
2021. The Group estimates retail
sales of luxury watches reached $9.9
billion in calendar year 2023 (2022:
$8.2 billion).
The US market is led by Rolex with
strong market positions of Cartier, Patek
Philippe, Audemars Piguet, OMEGA,
TUDOR, Breitling, Officine Panerai and
TAG Heuer. Additionally, there are also
relatively strong market positions for
smaller independent brands such as
MB&F, Bovet and H.Moser & Cie.
US retail distribution is in the process
of consolidation towards larger
showroom formats in major shopping
centres and retail investment from
the Watches of Switzerland Group
and others has increased. The US
market is predominantly domestic,
although domestic tourism (e.g. to
Florida or Las Vegas) is significant. In
recent years Rolex, Patek Philippe and
other brands have been rationalising
distribution, reducing the number of
agencies to a smaller number of higher
quality retailers.
US MARKET HIGHLIGHTS
1
CALENDAR YEAR 2023
RANKING IN GLOBAL
MARKETS FOR SWISS
WATCH EXPORTS
$9.9bn
ESTIMATED 2023 LUXURY
WATCH RETAIL SALES
(2022:$8.2bn)
THE US LUXURY WATCH MARKET
LUXURY SWISS WATCH EXPORTS TO THE US (CALENDAR YEARS)
Watches of Switzerland, Hudson Yards, New York
21
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
0
100%
17% 18%
20%
22%
25%
27%
30% 32%
34%
80%
40%
20%
60%
2020 2021 2022 2023 2024 2025 2026 20272019
Brands
Non-branded
CAGR: Brands 13% Non-branded 1%
Source: Metals Focus, Refinitive GFMS, ICE Benchmark Administration, World Gold Council
Source: Metals Focus, Refinitive GFMS, ICE Benchmark Administration, World Gold Council
Source: McKinsey, Euromonitor
JEWELLERY MARKET WORLDWIDE – TREND IS INEXORABLY TOWARDS BRANDS
LUXURY JEWELLERY MARKET
Our luxury watch business is
complemented by a strong luxury
jewellery offering.
The US and UK markets are among
the largest globally on a per capita
basis for luxury jewellery (Source:
World Gold Council).
The US is the strongest market in the
Western world for luxury jewellery
per capita.
The global luxury jewellery market has
seen global trends towards the
branded component of the market, as
demonstrated in the graph opposite.
Luxury branded jewellery typically has
a higher Average Selling Price (ASP)
and frequency of purchase along with
higher levels of self-purchase, leading it
to be less promotional and less cyclical
than commodity jewellery. We see
this as a significant area of growth for
the Group going forward, where we
can apply our expertise gained in
luxury watches to the luxury branded
jewellery sector.
2015 2016 2017
2018
2019
2021 2022 20232020
-10%
-20%
-30%
10%
0%
20%
30%
40%
50%
60%
US
UK
EU
World total
+8.4%
UK CAGR 2015 to 2023
US CAGR 2015 to 2023
+2.0%
JEWELLERY DEMAND: CUMULATIVE YOY% (CALENDAR YEARS)
2018
2019
2020 2021 2022 2023
25
30
0
5
10
15
20
US
UK
EU (exc UK and CIS)
LUXURY JEWELLERY DEMAND PER CAPITA (US$)
2 2
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
MARKET REVIEW
continued
Tiffany & Co
Cartier
David Yurman
Van Cleef & Arpels
BVLGARI
Roberto Coin
Others
Source: WOSG estimates
The acquisition of Roberto Coin Inc., the exclusive distributor of Roberto Coin
in North America, on 8 May 2024, further develops the Group’s opportunities
within the luxury branded jewellery market. Robert Coin is the sixth largest
luxury jewellery brand (by retail sales) in the US as can be seen in the graph
(opposite), competing with other top 10 industry leading brands such as Cartier,
Tiffany, Van Cleef & Arpels, BVLGARI and David Yurman. For more details on
our Roberto Coin Inc. acquisition please refer to pages 46 to 49.
US MARKET SHARE AT RETAIL SALES VALUE (2023 CALENDAR YEAR)
ROBERTO COIN INC. IS A MAJOR PLAYER IN THE
USLUXURY BRANDED JEWELLERY MARKET
23
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
0
120
47
18
65
38
18
56
53
22
75
CAGR
2019-22
Total +4%
+2% +10% ~60%
+7%
Pre-owned
CAGR
2022-28
Online
Share ‘28
55
19
74
81
33
114
80
40
Retail price in the US
2020 2021 2022 2028
estimate
2019
Luxury watches ($bn)
Pre-owned watches ($bn)
Sources: FHS, Altagamma, Euromonitor, expert interview, BCG Analysis, WOSG
1 Source: BCG Luxury Preowned Watches,
Your Time Has Come (March 2023)
PRE-OWNED WATCH MARKET
We believe the pre-owned market is
a positive development for the retail
market. It provides liquidity and value
preservation for luxury watches. This
is a growing sector due to the supply
of certain products being inadequate
to meet demand in the first hand
market and for collectors given nearly
95%
1
of watches are no longer in
production. The pre-owned market
today has a dependence on product
sold at prices above retail due to
unavailability and scarcity.
The market is made up of pre-owned
(purchase or trade-in watches to sell
on) and online marketplace players.
During the year, Rolex launched the
Rolex Certified Pre-Owned programme
offering the opportunity to purchase
from its official authorised retailers pre-
owned watches that are certified as
authentic and provide a Rolex-backed
two-year international guarantee. This
has opened the pre-owned market up
to a customer who may have previously
been concerned about purchasing pre-
owned items. We see Rolex Certified
Pre-Owned as a significant opportunity
for the Group and at the year-end we
showcased Rolex Certified Pre-Owned
in 19 showrooms in the UK and 17 in the
US, alongside our online offering.
PRE-OWNED GLOBAL MARKET, GROWING STRONGER IN WESTERN MARKETS AND ONLINE
REPAIRS AND SERVICING
The Group believes repairs and
servicing complements the first-hand
market for luxury watches and is
critical in protecting and prolonging
the life and value of the products.
The market is primarily supported by
traditional multiple and independent
retailers and brand in-house resources.
The Group estimates repairs and servicing
represents approximately 5% of the
market and is very important in terms of
providing a luxury client experience.
Repairs and servicing has not kept pace
with the growth in new watch sales. The
Group continues to invest in expanding its
capacity to repair and service timepieces
in both the UK and US.
Repairs and servicing contribute to the
circular economy; refer to page 102 to
105 to learn more.
2 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
MARKET REVIEW
continued
PRE-OWNED AND ONLINE MARKETPLACE KEY PLAYERS
Watchfinder & Co.
Acquired by Richemont in 2018
Bucherer WatchBox
Now part of the 1916 Company
Hodinkee
Crown & Caliber
Acquired by Hodinkee in 2021
Bob’s
Watches
Analog:Shift
Acquired by the Watches of
Switzerland Group in 2020
Watches of
Switzerland Group
Chrono24 eBay Auction Houses
2 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OUR BUSINESS MODEL
2 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
HOW THE GROUP CREATES VALUE
DRIVEN BY
OUR PURPOSE
To WOW our clients while
caring for our colleagues, our
communities and our planet.
WHAT WE DO
We partner with the most
prestigious luxury watch and
jewellery brands to provide the
highest level of client service by
well-trained, expert colleagues
in modern, luxurious and
welcoming showroom
environments and leading-edge
online sites. This is all supported
by our international scale, fully
integrated technology and
impactful marketing.
Our key markets are the UK
and US.
INPUTS
HOW WE CREATE VALUE
BRAND PARTNERSHIPS
Our strong and long-standing relationships
with the most recognised and prestigious
luxury watch and jewellery brands. These
relationships have been forged over many
years and include new relationships with
developing brands.
Please see pages 28 to 33 for more details
on the prestigious brands we partner with.
COLLEAGUES
The Watches of Switzerland Group is
committed to building a great place to work
by giving colleagues every reason to join, grow
and stay with our Group. We recognise the
many benefits a diverse and inclusive
workforce can bring and embrace all talent.
CLIENTS
We offer the greatest choice of brands
and products in the world of luxury
watches and jewellery. We aim to make
our clients feel welcome through
unintimidating, inviting, browsable, modern
and luxurious environments in our
showrooms and online.
DESTINATION SHOWROOMS
Our clients purchase our products through
our retail network of directly operated
showrooms. These include multi-brand
showrooms, a presence in travel retail,
online and a growing portfolio of
mono-brand boutiques in partnership with
our brands.
FINANCIAL INVESTMENT
Watches of Switzerland Group PLC is listed
on the London Stock Exchange. Through
focused investment we drive growth,
generate shareholder value and ensure the
long-term sustainable future of the Group.
BRAND PARTNERSHIPS
We collaborate with our long-standing brand partners to
elevate and expand their distribution and partner on demand
forecasting, product launches, showroom projects, online,
clienteling, marketing events and learning and development
for our colleagues.
CLIENT EXPERIENCE
Our showroom colleagues provide expertise and knowledge
to ensure an exceptional client experience through extensive
learning and development.
We have developed our industry-leading Xenia
Client Experience Programme. Refer to page 40
forfurther details.
SHOWROOM ENVIRONMENT
Our well-invested showrooms are luxurious, open,
welcoming, contemporary, spacious, non-intimidating
and browsable. The design concept is regularly assessed
in order to ensure we continue to appeal to a broad
client demographic and drive high levels of productivity
across our estate.
MULTI-CHANNEL
Our multi-channel model spans a well-invested showroom
network, with flagships, regional showrooms, travel retail and
mono-brand boutiques complemented by market-leading
ecommerce platforms. The Group has a truly multi-channel
approach, which includes click and collect, an appointment
system and the Luxury Watch and Jewellery Virtual Boutique.
MARKETING
We deliver impactful marketing focused on digital
communications, Client Relationship Management, PR, client
experiences and co-operative activity with brand partners.
Our editorial content across watches and jewellery provides
an authoritative voice within our market. Refer to page 35 for
further details.
SCALE
High barriers to entry created through national coverage in
the UK with a portfolio of 158 showrooms in the UK and a
growing and significant presence in the US with 56
showrooms (at 28 April 2024).
27
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OPERATIONAL EXCELLENCE
Technology: Our fully integrated IT systems are based on a single
SAP platform powering showroom point of sale, CRM, reporting
solutions, live inventory availability and operations. This single
platform enables rapid expansion capabilities in new markets or
through acquisitions.
Merchandising: Dynamic inventory management optimises stock
availability, enhances showroom productivity and in the UK, allows
for nationwide coverage, giving us a key competitive advantage.
Retail operations: We aim to continually drive productivity
and profitability, with a high level of accountability and
performance management.
FINANCIAL DISCIPLINE
Financial performance: We run all our showrooms to be profitable,
leveraging showroom and central overheads through top line growth
with strict investment criteria on projects or investment opportunities.
Cash generation: The strong, consistent generation of cash is fuelled
by strict working capital management, with sufficient liquidity to fund
growth and to provide for potential acquisition opportunities. We
take a disciplined and data-led approach to return on investment,
aiming to deliver long-term sustainable earnings growth whilst
retaining financial capability to invest in our business and to execute
our strategic priorities.
COLLEAGUES AND COMMUNITIES
We develop our colleagues through significant investment in training
and development. This is supported by promoting an open and
inclusive environment through listening to our colleagues.
The Watches of Switzerland Group Foundation which supports a
number of causes, with an emphasis on helping poor and vulnerable
people out of poverty. Refer to pages 86 to 91 for further details.
PLANET AND PRODUCT
We are determined to operate to high levels of environmental
stewardship, while safeguarding against climate related risk and
supporting a more circular economy, through our repairs and
pre-owned businesses.
We are committed to making sure our supply chain operates responsibly
and that everyone we do business with, respects and protects the lives
of workers, their communities and the planet.
We have reinforced our commitment to caring for our planet, by
linking our existing loan facility to the achievement of our near-term
science-based emission reduction targets and circularity goals.
VALUE CREATED
£1,538m
FY24 REVENUE
19.5%
FY24 RETURN ON
CAPITAL EMPLOYED
1
£226m
FY24 CASH GENERATED
FROM OPERATIONS
2,900+
NUMBER OF COLLEAGUES
£7. 5m
PAID BY THE GROUP TO THE
WATCHES OF SWITZERLAND
GROUP FOUNDATION SINCE
LAUNCH
158
UK SHOWROOMS
AT 28 APRIL 2024
56
US SHOWROOMS
AT28 APRIL 2024
223
TOTAL SHOWROOMS
AT 28 APRIL 2024
£135m
FY24 ADJUSTED EBIT
1
1 This is an Alternative Performance Measure. Refer to the Glossary on pages 254 to 257 for
definition and reconciliation to statutory measures where relevant.
2 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Our Brand
Partnerships
Our long-standing association with the most
recognised and prestigious luxury watch and jewellery
brands is a key point of distinction and a cornerstone
of our unique client experience.
29
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
29
LUXURY WATCHES
We have developed strong, long-standing and collaborative partnership’s with the most
prestigious luxury watch brands over the years. We constantly strive to represent our brand
partners in the best possible way to our clients, working together to identify distribution
opportunities, partner on demand forecasting and product development, and collaborating
closely on all showroom projects, across our online platform, clienteling initiatives and marketing
activities. We also collaborate on training our colleagues with our brand partners to ensure we
have experts across all brands within our business.
Utilising over 180 years of experience and perpetuating the
tradition of Genevan watchmaking, Patek Philippe has always been
at the forefront of the luxury watch industry.
Founded in 1905 in London by Hans Wilsdorf, Rolex
watches are crafted from the finest raw materials
andassembled with scrupulous attention to detail.
3 0
OUR BRAND PARTNERSHIPS
Audemars Piguet is the oldest fine watchmaking manufacturer
still in the hands of its founding families (Audemars and Piguet).
Space, James Bond and the Olympics – when it comes to
co-associations, OMEGA certainly beats most watch brands in terms
of cool, but above that is their absolute mastery of technology and
ability to produce some of the finest movements available today.
Widely regarded as the inventor of the first watch
designed to be worn on the wrist, Cartier was established
in Paris in 1847 and is arguably one of the most
recognisable Maisons in the world.
TAG Heuer creates watches that will take you anywhere – into
the ocean’s depths, up a mountain, behind the wheel of a car.
TAG Heuer timepieces are reliable, innovative and versatile.
Léon Breitling started his eponymous brand in 1884 and it has
specialised in complicated timepieces and chronographs from the
beginning, going on to pioneer the wrist-worn chronograph, which
washugely popular with pilots.
Since its founding in 1926, TUDOR has endeavoured to produce
the best possible watches at the best possible price. This mission,
bold then as it is now, is inspired by the vision of the brand’s
founder Hans Wilsdorf.
31
OUR BRAND PARTNERSHIPS
32
OUR BRAND PARTNERSHIPS
LUXURY JEWELLERY
At the Watches of Switzerland Group, our brands Mappin & Webb, Goldsmiths, Mayors and
Betteridge offer their very own collections of jewellery all steeped in a rich history and heritage,
making our showrooms and websites the destination for fine luxury jewellery. We are also
privileged to partner with the best luxury jewellery brands in the world, including Roberto Coin,
BVLGARI, FOPE, Messika, Jenny Packham and Gucci.
33
OUR BRAND PARTNERSHIPS
1. GROW REVENUE, PROFIT AND
RETURN ON CAPITAL EMPLOYED
2. ENHANCE STRONG BRAND
PARTNERSHIPS
3. DELIVER AN EXCEPTIONAL
CLIENT EXPERIENCE
4. DRIVE CLIENT AWARENESS AND
BRAND IMAGE THROUGH MULTIMEDIA
WITH IMPACTFUL MARKETING
WHAT IT MEANS
To drive revenue growth across our markets of the UK and the US and deliver
further operational leverage. Generate strong free cash flow conversion to
support growth leading to enhanced Return on Capital Employed (ROCE).
Delivered through consistent, sustained capital investment and selective
acquisitions to support growth.
WHAT IT MEANS
Our strong and long-standing relationships with the most recognised and
prestigious luxury watch and jewellery brands have remained a point of
distinction. Many of these relationships have been forged over many years, but
also include new relationships with some exciting brands. We have also developed
exclusive partnerships and representations for some of our brand partners.
We work with a long-term view on elevating our brand partners’ equity in the
markets we serve and operate in full collaboration and transparency across all
aspects of the product, marketing and distribution mix.
WHAT IT MEANS
Our Xenia Client Experience Programme is an opportunity to create a unique
differentiator to our competition. Everything we do is driven by our client
experience and our colleagues who are either serving a client or serving
someone who is. Our three Xenia pillars of Know Me, WOW Me and Remember
Me enable all colleagues to focus on how we make our clients feel throughout
every interaction with our brands.
WHAT IT MEANS
Creative, effective and relevant marketing content targeted towards a broad
aspirational audience, to support our showrooms and showcase our breadth of
range and expertise. We adopt a multi-channel marketing approach to maximise
awareness, invest in performance marketing to drive sales both online and
offline, and work with brand partners on co-op marketing campaigns, clienteling
and events.
HOW WE PERFORMED IN FY24
– Group revenue +2% at constant currency and flat at reported rates vs FY23,
Adjusted EBIT of £135 million (-18% vs FY23) and ROCE of 19.5% (-840bps vs FY23)
– Opened three multi-brand showrooms including the One Vanderbilt, New
York and the Rolex-anchored American Dream, New Jersey
– Acquired 15 luxury watch showrooms from Ernest Jones in November 2023
– 15 showrooms refurbished including the launch of the Mappin & Webb
contemporary concept in four showrooms
– 19 new mono-brand boutiques in the UK, US and Europe in partnership with
TAG Heuer, Breitling and Grand Seiko
– Rolex Certified Pre-Owned launched in Summer 2023 and is expected to be
a high growth area for the Group
HOW WE PERFORMED IN FY24
– Attended multiple watch and jewellery events, including Watches and Wonders
Geneva, Geneva Watch Days, Vicenza Jewellery show and JCK/Couture in Las Vegas
– Formulation of long-term development plans with our strategic brand partners
– Commenced acceleration of luxury branded jewellery with new brand partners
– Investment in client events included hosting of high-end jewellery events in
London, Manchester and Glasgow in the UK and across several Mayors and
Betteridge showrooms in the US
– Increased our collaboration with brands on all aspects of co-operative
marketing, including digital communication, events and advertising
– Working with the brands on significant training programmes for our colleagues
– Watches of Switzerland hosted the 2023 Grand Prix d’Horlogerie de Genève
(GPHG) award-winning watches at Soho, New York
– Started to celebrate the Watches of Switzerland 100 year anniversary (2024)
with exclusive brand collaborations and special watch releases
– Three-year partnership with Académie Horlogère des Créateurs Indépendants
HOW WE PERFORMED IN FY24
– Continued to deliver Xenia across our showrooms and Luxury Watch and
Jewellery Virtual Boutique and launched our Xenia principles in our Support
Centres – please refer to page 40 for more details
– Our Luxury Watch and Jewellery Virtual Boutique continues to bridge the gap
between online and showrooms, offering unparalleled client service under a
truly multi-channel approach. We continued to increase resource this year in
both the UK and US allowing more clients access and improving turnaround
time on enquiries
– In the UK, we hosted 280 events and entertained nearly 9,000 clients in both
showrooms and key prestigious locations around the UK with our key brand
partners across watches and jewellery along with pre-owned events
– In the US, we hosted over 220 events and entertained over 4,400 clients
across showrooms and external venues with our key brand partners including
launch events for our AMEX Centurion partnership and client event in
partnership with GPHG
HOW WE PERFORMED IN FY24
– Continued focus on performance marketing with market-leading digital
campaigns across Google, optimised for multi-channel return
– Our presence on social media continues to be an important channel to inspire,
engage and target a new, younger audience:
– In the UK total campaign impressions (including search and shopping) were
over 5.0 billion
– In the US total campaign impressions (including search and shopping) were
over 1.0 billion
– Investment in print media and outdoor advertising with our key brand partners,
along with bursts of activity to support our Watches of Switzerland Group
exclusives and new agencies
– Investment in local activations, ensuring each new or refurbished showroom
has a localised support plan to help drive awareness and footfall
– Extensive PR activity in the US with activations such as the launch of the
partnership with AMEX Centurion and the GPHG
OBJECTIVES FOR FY25
– Invest in our showroom portfolio with an exciting pipeline including:
– Flagship Rolex boutique, Old Bond Street London
– New Mappin & Webb luxury jewellery boutique, Manchester
– New Audemars Piguet Townhouse, Manchester operating as a joint venture
– Relocation of Watches of Switzerland Plano, Texas and introduction of Rolex
– New Mappin & Webb multi-brand in Edinburgh
– New Watches of Switzerland Ross Park, Pittsburgh
– Relocation/expansion of Mayors Tampa, Mayors St Johns and Mayors
Sarasota, Florida
– Continue to grow pre-owned and Rolex Certified Pre-Owned
– Expansion of luxury branded jewellery within our portfolio of showrooms and
online
– Completed the acquisition of Roberto Coin Inc., the exclusive distributor of
Roberto Coin in North America in May 2024
OBJECTIVES FOR FY25
– Continue to grow our brand partners’ equity, through network elevation and
excellence in merchandising and retail
– Develop strategic joint business plans focused on distribution, product
launches, training and marketing
– Execute our luxury branded jewellery strategy
– Further accelerate our development on pre-owned and Rolex Certified Pre-
Owned
– Increased collaboration with both local market brand management, and
relevant global teams
– Ensure a high level of transparency and integrity in our business practices
– Strengthen partnerships with our brands on our ESG agenda
OBJECTIVES FOR FY25
– Continue to focus on the Xenia client experience across our showrooms and
embed throughout all our processes and support teams
– Further expansion and centralisation of processes into the Luxury Watch and
Jewellery Virtual Boutique in the UK and US
– Continue to elevate and widen our client event programme – with focus on
strong commercial client events
– Focus on clienteling the Collector with relevant activations and personalised
relationships
– Enhanced training programme to deliver exceptional services supported by a
new global Learning Management System
OBJECTIVES FOR FY25
– Continue to drive awareness through a multi-channel strategy with bold,
impactful content creation
– Ongoing investment in performance marketing to drive sales both online and
offline
– Focus on pre-owned and the circular economy of selling and buying in pre-
owned watches
– Implement co-operative plans to support new brand partners in luxury
jewellery
– Devise and implement localised marketing plans to support City Destinations
of WOSG dominance
– Continue to focus on PR activations in the US to drive brand awareness
– Full funnel omnichannel approach to drive Watches of Switzerland and Mayors
brand awareness and convert clients when and where they are best optimised
LINK TO KPIs
1
2
3
4
5
6
7
8
9
12
LINK TO KPIs
5
8
9
12
LINK TO KPIs
8
9
LINK TO KPIs
9
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
3
4
6
8
9
10
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
3
5
6
7
8
9
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
3
4
5
6
7
8
9
11
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
3
4
6
8
9
Read more on pages 134 to 139 Read more on pages 134 to 139 Read more on pages 134 to 139 Read more on pages 134 to 139
Within the framework of our seven strategic priorities, we made progress during FY24 through elevated levels of
investment and focus on further developing our client-centric business model.
DELIVERING OUR STRATEGY
OUR STRATEGY
3 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
1. GROW REVENUE, PROFIT AND
RETURN ON CAPITAL EMPLOYED
2. ENHANCE STRONG BRAND
PARTNERSHIPS
3. DELIVER AN EXCEPTIONAL
CLIENT EXPERIENCE
4. DRIVE CLIENT AWARENESS AND
BRAND IMAGE THROUGH MULTIMEDIA
WITH IMPACTFUL MARKETING
WHAT IT MEANS
To drive revenue growth across our markets of the UK and the US and deliver
further operational leverage. Generate strong free cash flow conversion to
support growth leading to enhanced Return on Capital Employed (ROCE).
Delivered through consistent, sustained capital investment and selective
acquisitions to support growth.
WHAT IT MEANS
Our strong and long-standing relationships with the most recognised and
prestigious luxury watch and jewellery brands have remained a point of
distinction. Many of these relationships have been forged over many years, but
also include new relationships with some exciting brands. We have also developed
exclusive partnerships and representations for some of our brand partners.
We work with a long-term view on elevating our brand partners’ equity in the
markets we serve and operate in full collaboration and transparency across all
aspects of the product, marketing and distribution mix.
WHAT IT MEANS
Our Xenia Client Experience Programme is an opportunity to create a unique
differentiator to our competition. Everything we do is driven by our client
experience and our colleagues who are either serving a client or serving
someone who is. Our three Xenia pillars of Know Me, WOW Me and Remember
Me enable all colleagues to focus on how we make our clients feel throughout
every interaction with our brands.
WHAT IT MEANS
Creative, effective and relevant marketing content targeted towards a broad
aspirational audience, to support our showrooms and showcase our breadth of
range and expertise. We adopt a multi-channel marketing approach to maximise
awareness, invest in performance marketing to drive sales both online and
offline, and work with brand partners on co-op marketing campaigns, clienteling
and events.
HOW WE PERFORMED IN FY24
– Group revenue +2% at constant currency and flat at reported rates vs FY23,
Adjusted EBIT of £135 million (-18% vs FY23) and ROCE of 19.5% (-840bps vs FY23)
– Opened three multi-brand showrooms including the One Vanderbilt, New
York and the Rolex-anchored American Dream, New Jersey
– Acquired 15 luxury watch showrooms from Ernest Jones in November 2023
– 15 showrooms refurbished including the launch of the Mappin & Webb
contemporary concept in four showrooms
– 19 new mono-brand boutiques in the UK, US and Europe in partnership with
TAG Heuer, Breitling and Grand Seiko
– Rolex Certified Pre-Owned launched in Summer 2023 and is expected to be
a high growth area for the Group
HOW WE PERFORMED IN FY24
– Attended multiple watch and jewellery events, including Watches and Wonders
Geneva, Geneva Watch Days, Vicenza Jewellery show and JCK/Couture in Las Vegas
– Formulation of long-term development plans with our strategic brand partners
– Commenced acceleration of luxury branded jewellery with new brand partners
– Investment in client events included hosting of high-end jewellery events in
London, Manchester and Glasgow in the UK and across several Mayors and
Betteridge showrooms in the US
– Increased our collaboration with brands on all aspects of co-operative
marketing, including digital communication, events and advertising
– Working with the brands on significant training programmes for our colleagues
– Watches of Switzerland hosted the 2023 Grand Prix d’Horlogerie de Genève
(GPHG) award-winning watches at Soho, New York
– Started to celebrate the Watches of Switzerland 100 year anniversary (2024)
with exclusive brand collaborations and special watch releases
– Three-year partnership with Académie Horlogère des Créateurs Indépendants
HOW WE PERFORMED IN FY24
– Continued to deliver Xenia across our showrooms and Luxury Watch and
Jewellery Virtual Boutique and launched our Xenia principles in our Support
Centres – please refer to page 40 for more details
– Our Luxury Watch and Jewellery Virtual Boutique continues to bridge the gap
between online and showrooms, offering unparalleled client service under a
truly multi-channel approach. We continued to increase resource this year in
both the UK and US allowing more clients access and improving turnaround
time on enquiries
– In the UK, we hosted 280 events and entertained nearly 9,000 clients in both
showrooms and key prestigious locations around the UK with our key brand
partners across watches and jewellery along with pre-owned events
– In the US, we hosted over 220 events and entertained over 4,400 clients
across showrooms and external venues with our key brand partners including
launch events for our AMEX Centurion partnership and client event in
partnership with GPHG
HOW WE PERFORMED IN FY24
– Continued focus on performance marketing with market-leading digital
campaigns across Google, optimised for multi-channel return
– Our presence on social media continues to be an important channel to inspire,
engage and target a new, younger audience:
– In the UK total campaign impressions (including search and shopping) were
over 5.0 billion
– In the US total campaign impressions (including search and shopping) were
over 1.0 billion
– Investment in print media and outdoor advertising with our key brand partners,
along with bursts of activity to support our Watches of Switzerland Group
exclusives and new agencies
– Investment in local activations, ensuring each new or refurbished showroom
has a localised support plan to help drive awareness and footfall
– Extensive PR activity in the US with activations such as the launch of the
partnership with AMEX Centurion and the GPHG
OBJECTIVES FOR FY25
– Invest in our showroom portfolio with an exciting pipeline including:
– Flagship Rolex boutique, Old Bond Street London
– New Mappin & Webb luxury jewellery boutique, Manchester
– New Audemars Piguet Townhouse, Manchester operating as a joint venture
– Relocation of Watches of Switzerland Plano, Texas and introduction of Rolex
– New Mappin & Webb multi-brand in Edinburgh
– New Watches of Switzerland Ross Park, Pittsburgh
– Relocation/expansion of Mayors Tampa, Mayors St Johns and Mayors
Sarasota, Florida
– Continue to grow pre-owned and Rolex Certified Pre-Owned
– Expansion of luxury branded jewellery within our portfolio of showrooms and
online
– Completed the acquisition of Roberto Coin Inc., the exclusive distributor of
Roberto Coin in North America in May 2024
OBJECTIVES FOR FY25
– Continue to grow our brand partners’ equity, through network elevation and
excellence in merchandising and retail
– Develop strategic joint business plans focused on distribution, product
launches, training and marketing
– Execute our luxury branded jewellery strategy
– Further accelerate our development on pre-owned and Rolex Certified Pre-
Owned
– Increased collaboration with both local market brand management, and
relevant global teams
– Ensure a high level of transparency and integrity in our business practices
– Strengthen partnerships with our brands on our ESG agenda
OBJECTIVES FOR FY25
– Continue to focus on the Xenia client experience across our showrooms and
embed throughout all our processes and support teams
– Further expansion and centralisation of processes into the Luxury Watch and
Jewellery Virtual Boutique in the UK and US
– Continue to elevate and widen our client event programme – with focus on
strong commercial client events
– Focus on clienteling the Collector with relevant activations and personalised
relationships
– Enhanced training programme to deliver exceptional services supported by a
new global Learning Management System
OBJECTIVES FOR FY25
– Continue to drive awareness through a multi-channel strategy with bold,
impactful content creation
– Ongoing investment in performance marketing to drive sales both online and
offline
– Focus on pre-owned and the circular economy of selling and buying in pre-
owned watches
– Implement co-operative plans to support new brand partners in luxury
jewellery
– Devise and implement localised marketing plans to support City Destinations
of WOSG dominance
– Continue to focus on PR activations in the US to drive brand awareness
– Full funnel omnichannel approach to drive Watches of Switzerland and Mayors
brand awareness and convert clients when and where they are best optimised
LINK TO KPIs
1
2
3
4
5
6
7
8
9
12
LINK TO KPIs
5
8
9
12
LINK TO KPIs
8
9
LINK TO KPIs
9
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
3
4
6
8
9
10
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
3
5
6
7
8
9
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
3
4
5
6
7
8
9
11
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
3
4
6
8
9
Read more on pages 134 to 139 Read more on pages 134 to 139 Read more on pages 134 to 139 Read more on pages 134 to 139
KEY PERFORMANCE INDICATORS PRINCIPAL RISKS AND UNCERTAINTIES
7
Cash generated from operations
8
Average selling price
9
Number of showrooms
0
Colleague Engagement Survey
ESG – Carbon emissions
2
ESG – Circularity
7
Regulatory and compliance
8
Economic and political
9
Brand and reputational damage
0
Financial and treasury
Climate change
Revenue
2
Operating profit/EBIT
3
Adjusted EBIT
4
Basic EPS
5
Adjusted EPS
6
Return on Capital Employed
Business strategy execution and development
2
Key suppliers and supply chain
3
Client experience and market risks
4
Colleague talent and capability
5
Data protection and cyber security
6
Business interruption
35
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
5. LEVERAGE BEST-IN-CLASS
OPER ATIONS
6. EXPAND OUR
MULTI-CHANNEL LEADERSHIP
7. CONTINUE TO ADVANCE
THEESGAGENDA
WHAT IT MEANS
Merchandising
Dynamic inventory management optimises stock availability, enhances showroom
productivity and in the UK, allows for nationwide coverage, giving us a key
competitiveadvantage.
We have optimised our online business across the US and the UK.
Retail operations
We aim to continually drive productivity and profitability, with a high level of
accountability and performance management.
IT systems
Our fully integrated IT systems are based on a single SAP platform powering
showroom point of sale, Client Relationship Management, reporting solutions,
live inventory availability and operations. This single platform enables rapid
expansion capabilities in new markets or through acquisitions.
WHAT IT MEANS
Our multi-channel business model is a key competitive advantage and
underscores our ability to react with speed and agility to a rapidly evolving
consumer environment whilst offering our clients an exceptional experience.
We continue to invest in expanding and enhancing our platform, consisting of
multi-brand showrooms, online, travel retail and mono-brand boutiques.
WHAT IT MEANS
We continue to progress towards Environmental, Social and Governance best
practices, with the aim of future-proofing our business and driving long-term
value andstakeholder satisfaction.
HOW WE PERFORMED IN FY24
Merchandising
– Improved product availability across the majority of our brands and showroom
productivity
– Extended the level of SKUs we have for key brands for our ecommerce
platform, to ensure we have the full range of products available by brand
– Reviewed inventory composition and turn to optimise open-to-buy, cost to
assort and bestsellers and novelties coverage
Retail operations
– Launched a 12 month look ahead retail calendar into the business to ensure all
retail activities are balanced and key initiatives launch with a positive impact
– Refined all retail procurement policies and processes, streaming workload for
retail colleagues and reducing costs
– A dedicated retail support contact team introduced to improve efficiencies in
showrooms
– Fully integrated the Ernest Jones acquisition into the Group’s operations
IT systems
– Continuing to refresh and expand our in-store technology, ensuring showroom
teams have the best technology to hand in support of every client transaction
– Enhancing the Group’s cyber security protection
HOW WE PERFORMED IN FY24
Multi-brand showrooms
– Acquisition of 15 luxury watch showrooms from Ernest Jones
– Opening three new showrooms, one of which is anchored by Rolex
– Completed the significant refurbishments/expansions of 14 multi-brand showrooms,
including the launch of our new Mappin & Webb contemporary concept
Online
– Continued to leverage our market-leading position in the UK and accelerate
our market share in the US, through our competitive advantage in digital
marketing andomnichannel excellence
Mono-brand boutiques
– Developed and enhanced the channel, opened 19 new mono-brand boutiques,
bringing our global network to a total of 99 boutiques (UK: 59, US: 31, Europe:
9) as at 28 April 2024
Travel retail
– Travel retail in the UK continues to improve as traffic continues to recover
from the pandemic
– Opened two mono-brand boutiques for TUDOR and TAG Heuer in
GatwickAirport
HOW WE PERFORMED IN FY24
– Achieved Real Living Wage employer status
– Colleague engagement score of 76%
– Further closure of the UK Gender Pay Gap by 1% to 20%
– Ranked #10 in the FTSE Women Leaders Review
– Donated £1,080,000 to UK charities and $175,000 to US charities through
TheWatches of Switzerland Group Foundation
– As at May 2024, rated ‘1’ by ISS Social Quality Score
– Improved our CDP score year-on-year from a C to a B
– Launch of Rolex Certified Pre-Owned which is now offered in 19 showrooms
in the UK and 17 in the US
– Increased repairs and pre-owned capacity and doubled our pre-owned
revenue year-on-year by Q4
– Launched colleague incentive scheme to reward ‘green’ behaviours
– Undertook a review of our approach to procurement and supply chain
management to strengthen engagement and achieve ESG goals
– Linked our existing loan facility to the achievement of our near-term science-
based emission reduction targets and circularity goals. Performance against
ESG KPIs can be found on page 55
OBJECTIVES FOR FY25
– Optimal brand presentation in our showrooms with stock availability and
depth and width of assortment, calibration according to business needs and
space capacity
– Inventory composition to further improve to ensure faster inventory turn
– Speed to market and system agility
– Continued refurbishment and expansion of showroom network
– Opening our first joint venture Audemars Piguet Townhouse in Manchester
– Embedding the retail transformation programme
– Data accuracy and trends reporting to power effective business decisions
– Continue to enhance our cyber security programme
– Open new US Support Centre in Fort Lauderdale, Florida
OBJECTIVES FOR FY25
– Ongoing investment in elevating and upgrading the existing network as well as
opening in new, strategic locations such as the flagship Rolex boutique on
London’s Old Bond Street
– Growing sector leadership online with a focus on luxury watches, jewellery
and luxury branded jewellery with continual improvement of user experience
– Working closely with our brand partners to further develop our multi-channel
partnerships
– Withdraw from our European mono-brand operations to refocus capital on
the higher-returning territories of the US and UK
OBJECTIVES FOR FY25
– Improve colleague engagement year-on-year
– Measure diversity and inclusion and deliver progress year on year
– Progress towards Great Place to Work accreditation
– Set long-term, science-based targets to reach net-zero GHG emissions by
2050 andevolve our climate transition planning
– Centralise our procurement and supply chain management functions to
strengthen engagement and due diligence
– Leverage AI to support FY25 ESG reporting and supply chain engagement
– Continue to increase the use of renewable energy across our Group
– Grow our range of products with positive environmental and social attributes
– Support circularity by promoting repairs and pre-owned
LINK TO KPIs
2
3
4
5
6
7
8
9
12
LINK TO KPIs
9
LINK TO KPIs
10
11
12
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
3
4
6
7
8
10
11
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
3
4
6
8
10
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
6
9
10
11
Read more on pages 134 to 139 Read more on pages 134 to 139 Read more on pages 134 to 139
OUR STRATEGY
continued
36
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
5. LEVERAGE BEST-IN-CLASS
OPER ATIONS
6. EXPAND OUR
MULTI-CHANNEL LEADERSHIP
7. CONTINUE TO ADVANCE
THEESGAGENDA
WHAT IT MEANS
Merchandising
Dynamic inventory management optimises stock availability, enhances showroom
productivity and in the UK, allows for nationwide coverage, giving us a key
competitiveadvantage.
We have optimised our online business across the US and the UK.
Retail operations
We aim to continually drive productivity and profitability, with a high level of
accountability and performance management.
IT systems
Our fully integrated IT systems are based on a single SAP platform powering
showroom point of sale, Client Relationship Management, reporting solutions,
live inventory availability and operations. This single platform enables rapid
expansion capabilities in new markets or through acquisitions.
WHAT IT MEANS
Our multi-channel business model is a key competitive advantage and
underscores our ability to react with speed and agility to a rapidly evolving
consumer environment whilst offering our clients an exceptional experience.
We continue to invest in expanding and enhancing our platform, consisting of
multi-brand showrooms, online, travel retail and mono-brand boutiques.
WHAT IT MEANS
We continue to progress towards Environmental, Social and Governance best
practices, with the aim of future-proofing our business and driving long-term
value andstakeholder satisfaction.
HOW WE PERFORMED IN FY24
Merchandising
– Improved product availability across the majority of our brands and showroom
productivity
– Extended the level of SKUs we have for key brands for our ecommerce
platform, to ensure we have the full range of products available by brand
– Reviewed inventory composition and turn to optimise open-to-buy, cost to
assort and bestsellers and novelties coverage
Retail operations
– Launched a 12 month look ahead retail calendar into the business to ensure all
retail activities are balanced and key initiatives launch with a positive impact
– Refined all retail procurement policies and processes, streaming workload for
retail colleagues and reducing costs
– A dedicated retail support contact team introduced to improve efficiencies in
showrooms
– Fully integrated the Ernest Jones acquisition into the Group’s operations
IT systems
– Continuing to refresh and expand our in-store technology, ensuring showroom
teams have the best technology to hand in support of every client transaction
– Enhancing the Group’s cyber security protection
HOW WE PERFORMED IN FY24
Multi-brand showrooms
– Acquisition of 15 luxury watch showrooms from Ernest Jones
– Opening three new showrooms, one of which is anchored by Rolex
– Completed the significant refurbishments/expansions of 14 multi-brand showrooms,
including the launch of our new Mappin & Webb contemporary concept
Online
– Continued to leverage our market-leading position in the UK and accelerate
our market share in the US, through our competitive advantage in digital
marketing andomnichannel excellence
Mono-brand boutiques
– Developed and enhanced the channel, opened 19 new mono-brand boutiques,
bringing our global network to a total of 99 boutiques (UK: 59, US: 31, Europe:
9) as at 28 April 2024
Travel retail
– Travel retail in the UK continues to improve as traffic continues to recover
from the pandemic
– Opened two mono-brand boutiques for TUDOR and TAG Heuer in
GatwickAirport
HOW WE PERFORMED IN FY24
– Achieved Real Living Wage employer status
– Colleague engagement score of 76%
– Further closure of the UK Gender Pay Gap by 1% to 20%
– Ranked #10 in the FTSE Women Leaders Review
– Donated £1,080,000 to UK charities and $175,000 to US charities through
TheWatches of Switzerland Group Foundation
– As at May 2024, rated ‘1’ by ISS Social Quality Score
– Improved our CDP score year-on-year from a C to a B
– Launch of Rolex Certified Pre-Owned which is now offered in 19 showrooms
in the UK and 17 in the US
– Increased repairs and pre-owned capacity and doubled our pre-owned
revenue year-on-year by Q4
– Launched colleague incentive scheme to reward ‘green’ behaviours
– Undertook a review of our approach to procurement and supply chain
management to strengthen engagement and achieve ESG goals
– Linked our existing loan facility to the achievement of our near-term science-
based emission reduction targets and circularity goals. Performance against
ESG KPIs can be found on page 55
OBJECTIVES FOR FY25
– Optimal brand presentation in our showrooms with stock availability and
depth and width of assortment, calibration according to business needs and
space capacity
– Inventory composition to further improve to ensure faster inventory turn
– Speed to market and system agility
– Continued refurbishment and expansion of showroom network
– Opening our first joint venture Audemars Piguet Townhouse in Manchester
– Embedding the retail transformation programme
– Data accuracy and trends reporting to power effective business decisions
– Continue to enhance our cyber security programme
– Open new US Support Centre in Fort Lauderdale, Florida
OBJECTIVES FOR FY25
– Ongoing investment in elevating and upgrading the existing network as well as
opening in new, strategic locations such as the flagship Rolex boutique on
London’s Old Bond Street
– Growing sector leadership online with a focus on luxury watches, jewellery
and luxury branded jewellery with continual improvement of user experience
– Working closely with our brand partners to further develop our multi-channel
partnerships
– Withdraw from our European mono-brand operations to refocus capital on
the higher-returning territories of the US and UK
OBJECTIVES FOR FY25
– Improve colleague engagement year-on-year
– Measure diversity and inclusion and deliver progress year on year
– Progress towards Great Place to Work accreditation
– Set long-term, science-based targets to reach net-zero GHG emissions by
2050 andevolve our climate transition planning
– Centralise our procurement and supply chain management functions to
strengthen engagement and due diligence
– Leverage AI to support FY25 ESG reporting and supply chain engagement
– Continue to increase the use of renewable energy across our Group
– Grow our range of products with positive environmental and social attributes
– Support circularity by promoting repairs and pre-owned
LINK TO KPIs
2
3
4
5
6
7
8
9
12
LINK TO KPIs
9
LINK TO KPIs
10
11
12
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
3
4
6
7
8
10
11
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
3
4
6
8
10
LINK TO PRINCIPAL RISKS AND UNCERTAINTIES
1
2
6
9
10
11
Read more on pages 134 to 139 Read more on pages 134 to 139 Read more on pages 134 to 139
SUSTAINABILITY
Our strategy is underpinned by our
ESG Pillars
PEOPLE
Give our colleagues every reason to join, grow and stay
Attract and retain talent
Build an organisation fit for the future
Leverage our unique culture
Support our local communities
PRODUCT
Improve our traceability and sourcing standards
Highlight industry progress
Support circularity through repairs, servicing and our
pre-owned business
PLANET
Achieve net-zero carbon by 2050
Help preserve natural resources
Read more on page 72
Read more on page 92
Read more on page 123
37
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OUR STRATEGY IN ACTION
The Rolex Certified Pre-Owned programme vouches for the authenticity of
previously owned Rolex watches. Each watch is meticulously serviced and
authenticated by Rolex. Every watch comes with a Rolex Certified Pre-
Owned seal, symbolising its status as certified, and comes with an
international two-year guarantee.
The Rolex Certified Pre-Owned offering is only available within the authorised
distribution network for Rolex. This ensures that clients who are interested in
purchasing a pre-owned Rolex will get the best in client service, advice and
hospitality during their purchasing journey.
Following the initial launch, Rolex Certified Pre-Owned is now offered in 19
showrooms in the UK and 17 in the US. Our new flagship Rolex boutique on
Old Bond Street, London, which opens in FY25, will have a dedicated floor for
Rolex Certified Pre-Owned. Rolex Certified Pre-Owned is also sold through
our online websites.
We are excited by our initial trading in Rolex Certified Pre-Owned, which has
surpassed our expectations. It is clear that this offering is bringing in a new client
to pre-owned, one who appreciates the certainty around the authenticity that
the Rolex Certified Pre-Owned seal brings. As we move into FY25, the offering
will be further enhanced through a dedicated shop-in-shop design and a
refreshed marketing campaign.
We expect Rolex Certified Pre-Owned to be an important growth driver for
the Group.
Rolex Certified Pre-Owned is another example of the Group’s focus on
supporting the circular economy. For more information on other initiatives,
please refer to pages 102 to 104.
ROLEX CERTIFIED PRE-OWNED PROGRAMME
Rolex launched its Certified Pre-Owned programme in 2022 and we were
pleased to commence this offering to our clients in July 2023 in the US and
September 2023 in the UK.
LINK TO STRATEGY
“Our Rolex Certified Pre-Owned programme
has proven itself a success with positive results
in short order. With continual growth since
launch, our showrooms are leading the way
with sales, offering our clients an unmatched
assortment and top-tier experiences. Demand
continues to build, and we are delighted
to be partnered with Rolex in the further
development of this programme.”
JAMES LAMDIN
US VICE PRESIDENT VINTAGE & PRE-OWNED TIMEPIECES
3 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
39
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OUR STRATEGY IN ACTION
continued
Xenia is our elevated Client Experience Programme, which has been
embedded throughout the Watches of Switzerland Group. It is at the heart
of everything we do but is especially important when it comes to providing
exceptional experiences for our clients – both external and internal.
Our Xenia initiative is based on three pillars: Know Me; WOW Me; Remember
Me and provides the universal standard for all our retail and support services.
Xenia is based on the power of WOW and is how we can build an advantage
over our competitors. The opportunity to WOW starts before the client steps
through the door of one of our showrooms and our retail teams strive to go
above and beyond to deliver an exceptional client experience.
This year we have maintained our focus on embedding the fundamental pillars
of Xenia across the entire Group and the continued investment in training and
leadership has aided in maintaining our Xenia standards. In addition, we have
regularly assessed our client experience and satisfaction across multiple touch
points in the UK and the US in line with Xenia principles.
In the UK, our Voice of the Client survey provides us with valuable real-life
feedback about clients’ experiences. 91% of our surveyed clients rate their
interactions with our showroom colleagues as either 9 or 10 out of 10 in their
feedback. 7 out of 10 surveyed clients felt their visits went above and beyond
their expectations, which is an essential pillar of our client experience ethos.
We further measure our client experience success through emotional drivers
where we achieved an outstanding over 91% connection with our clients in
emotional forces ‘Status’, ‘Certainty’ and ‘Fair Treatment’. Our UK Net Promoter
Score (NPS)
®
also remains consistently world class at over 82%.
We carry out multiple mystery shop programmes to measure the consistency
in delivering on our Xenia client experience principles and brand standards for
luxury service. Results from these programmes show that on over 93% of
occasions, our clients are made to feel at ease before the consultation had
commenced. Clients are engaged with the showroom teams demonstrating
expertise, confidence, and passion in over 90% of occasions. Also, an exceptional
first impression was made for 8 out of 10 clients during their initial visits, with a
conscious effort to build a personal rapport made by our colleagues and felt by
our clients on 77% of occasions.
Our mystery shopping success in the UK has been mirrored in the US with 8 out
of 10 clients feeling a rapport was built with the colleague during their visit and
98% of clients made to feel at ease before the consultation commenced.
We actively promote reviews through Trustpilot for online clients. In the UK our
Trustpilot scores average 4.7 out of 5.0, and our organically generated Google reviews
have achieved an average rating of 4.5 out of 5.0 across all our UK fascia brands.
In the US, we actively track Google reviews using Podium software in our
boutiques, where we have achieved an excellent 4.9 out of 5.0 rating, and our
US Trustpilot scores average 4.7 out of 5.0.
The success of these measures is at the core of the delivery of our Client
Experience Programme as we continue to evolve in line with our clients’ changing
needs. Our clients remain at the centre of everything we do.
X EN I A
Following the successful launch of our Xenia Client Experience Programme in
October 2021, the focus in FY24 has been to continue to deliver Xenia in our
showrooms and to launch the concept in our Support Centres.
LINK TO STRATEGY
“I recently had the pleasure of visiting Mappin & Webb and
my experience was nothing short of exceptional. The team
are truly outstanding. They are not only knowledgeable about
their products but also attentive and friendly. The team went
above and beyond to ensure that I found the perfect piece that
matched both my style and preference.”
TAKEN FROM THE VOICE OF THE CLIENT SURVEY
Net Promoter
®
, NPS
®
, NPS Prism
®
, and the NPS-related emoticons are registered trademarks of
Bain&Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter
SystemSM are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.
4 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
41
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
41
Mark Appleby LVO, Crown Jeweller
OUR STRATEGY IN ACTION
continued
From the solemn dignity of Her Majesty Queen Elizabeth II’s state funeral
to the majestic splendour of the Coronation of King Charles III, the
Crown Jeweller played a pivotal role in preserving and enhancing
the grandeur of these historic occasions. As we reflect upon the past year,
we are reminded of the timeless craftsmanship, meticulous attention to
detail, and unwavering dedication that the Crown Jeweller brings to each
ceremonial setting.
The Crown Jeweller, Mark Appleby LVO, is an integral part of our business as the
Head of Jewellery Services for Mappin & Webb and oversees all the craftsmanship
that is produced in our jewellery workshop and studios. Mappin & Webb has
been Warrant Holders to all the United Kingdom’s sovereigns since 1897, having
served five monarchs over a continuous period of 125 years. Today we continue
as Jewellers, Goldsmiths, and Silversmiths to His Royal Highness King Charles III.
Mark Appleby was appointed to the position of Crown Jeweller in 2017, having
also held the position of Personal Jeweller to the sovereign since 2012. This
further cemented the Company’s long-standing royal connection, being the 10th
person ever to be awarded this incredible honour. The Crown Jeweller is the
custodian of the Crown Jewels which are held in the Tower of London. Mark’s
responsibilities are cleaning the jewels once a year for the viewing public and
attending the Royal Maundy service (most recently at Worcester) ensuring the
17th century Maundy plates that bear the alms are transported safely and look
their best. The presence of the Crown Jeweller is required at the annual State
Opening of Parliament, being responsible for the monarch’s Instruments of
State; the Imperial State Crown, two heavy ornamental masses and the English
Sword of State. The Crown Jeweller is also responsible for ensuring the Royal lily
font and Royal christening Ewer are in place at the chapel for Royal christenings,
as these are part of the Crown Jewels.
The last year has been unprecedented for the first time in 70 years, due to the
end of the magnificent reign of Her Majesty Queen Elizabeth II and the role of
the Crown Jeweller was called upon to play an important role in the committal
service. In his role as Crown Jeweller, Mark was responsible for the placement
and subsequent removal of the Imperial State Crown, the Sovereign’s Sceptre
and Orb from the late Queen’s coffin before the internment at Windsor Castle
in September 2022.
Subsequently, the Crown Jeweller then played an important role during the
preparation for and at the Coronation by ensuring that the regalia, including the
Crowns, Sceptre, and many other ceremonial items, were in pristine condition
and ready for the ceremony. One of Mark’s responsibilities during this time was
to modify the St Edward’s Crown (the crowning crown), the Imperial State
Crown and make major modifications to the Queen Mary Crown, which was
worn by Her Majesty, Queen Camilla. The attention to detail and craftsmanship
in the work Mark does in his role as the Crown Jeweller is essential in upholding
the traditions and rituals of the Coronation, which made it a seamless and
majestic occasion.
Over 20 million people in the UK alone watched as King Charles III was crowned
and it was the most watched broadcast of the year. This does not account for
the millions also watching these historic events around the world.
THE JEWEL IN OUR CROWN
The past year has been a momentous one, marked by significant events
that have underscored the invaluable role of the Crown Jeweller in our
nation’s traditions and ceremonies.
LINK TO STRATEGY
The role of the Crown Jeweller is an honour bestowed to so few and yet as
recognition of his work and dedication, Mark Appleby, Crown Jeweller was
honoured by King Charles III in his 2024 New Year honours list, appointing him
to the Royal Victorian Order by awarding him an LVO.
Whilst we proudly display the Royal Warrants awarded to the business in our
Mappin & Webb showrooms, additionally, the expertise that we have in-house
within our jewellery workshop is unprecedented. Working alongside Mark
Appleby LVO is the former Crown Jeweller, Martin Swift. The two work
together, under one roof, with a dedicated team around them. Mappin & Webb
clients are presented with collections not only overseen by the Crown Jeweller
but actual one-off pieces that are handcrafted in the jewellery workshop which
adds regal prestige to the luxury of each piece.
42
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
43
OUR STRATEGY IN ACTION
continued
By the early 1930s, our first showroom opened in Ludgate Hill, London,
under the name G&M Lane & Co. The business thrived in this location and
continued to supply some of the finest timepieces to prestigious clients until
a devastating World War II attack on London.
Maurice Lane set up once again and secured the premises of another showroom
in the same location. By the 1940s, the business had survived the war by dealing
mostly in precision engineering components that contributed to the war effort.
By the end of the war, business was thriving again and G&M Lane & Co. started
trading as Watches of Switzerland. By the mid-1950s, seven showrooms were
operating. These were Bond Street, Regent Street, Piccadilly, Edinburgh,
Manchester, Birmingham and Cardiff and we continue to operate from several
of these locations today.
During the 1970s, Watches of Switzerland opened single-brand boutiques for Patek
Philippe, Piaget and in 1978, opened our first Rolex boutique on Old Bond Street.
Watches of Switzerland continued to grow and in 2014, we celebrated our 90th
anniversary with the opening of a new London-based flagship showroom at 155
Regent Street, the largest luxury watch showroom in Europe, spanning across
three floors. The opening of the new Regent Street showroom was celebrated
with a full 360 marketing campaign including out-of-home advertising and print
across several key titles around London as well as a number of events with key
clients, influencers and celebrities.
In October 2015, we relocated our Oxford Street showroom in order to create
a significant presence in London’s key affluential areas. In 2016, we completed
this strategy by relocating our Knightsbridge showroom to Brompton Road, and
so our ‘Golden Triangle’ as it is fondly referred to, was complete.
In 2017, Watches of Switzerland ventured overseas with the opening of a
showroom in the Wynn Resort, Las Vegas and in 2018 opened a flagship
showroom in Greene Street, Soho, New York. This was followed by openings of
Watches of Switzerland showrooms in Hudson Yards, New York and The Encore
WATCHES OF SWITZERLAND CENTENARY
One hundred years ago, Maurice Lane set up the first iteration of the Watches of
Switzerland business and began selling fine Swiss watches via mail order, making 2024 a
special year for the Group as we proudly celebrate our centenary year.
LINK TO STRATEGY
Boston Harbor, Massachusetts. In 2021 we acquired new Watches of Switzerland
showrooms in the Mall of America, Minneapolis, Minnesota, from Ben Bridge
Jewellers and in Legacy West, Plano, Texas from Timeless Luxury Watches. In
addition, in 2022, we opened showrooms in Kenwood, Cincinnati, Ohio and
acquired a Bernie Robbins showroom in Marlton, New Jersey and converted it to
Watches of Switzerland.
In the last few years, we are proud to have opened new Watches of Switzerland
showrooms in key locations such as American Dream, New Jersey, One Vanderbilt,
New York and Gatwick Airport, Broadgate and Battersea Power Station, London.
To celebrate 100 years of experience, dedication and partnerships, working
alongside key partner brands, we decided to commemorate not only our 100
years, but 100 years of horology with a new marketing campaign and ten
exclusive collaborations.
To kick off this exciting year, we have worked with Cartier on an exclusive Tank
Louis which was launched to key clients in February 2024. This timepiece
features a sophisticated and elevated design to appeal to everyone, with a
brushed gold dial offering a subtle radiant effect. The elegant dark-navy alligator
strap offers a timelessly elegant pairing whilst drawing attention to the deep blue
of the sapphire cabochon in the crown and its blued-steel hands.
In March 2024 we launched our overarching centenary campaign featuring some
iconic key and core pieces that have been solidified as some of the most noted
over the last century, with creative drawing inspiration from 1920s inspired Art
Deco. Each new exclusive piece has its own creative treatment echoing the era
it was first introduced and layered into the main campaign. This rolls out as a full
funnel marketing campaign across both traditional and digital touchpoints and
includes performance marketing, paid social, CRM, in-showroom activations,
1-2-1 appointments to view these pieces, as well as the exclusives and so much
more. A truly memorable year for us indeed!
4 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Top: Watches of Switzerland Group Limited Edition Girard-Perregaux Laureato
Bottom: Watches of Switzerland Group Limited Edition BVLGARI Serpenti Seduttori
4 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OUR STRATEGY IN ACTION
continued
On 8 May 2024, we announced that the Group had acquired the exclusive
distribution rights for the Roberto Coin brand in North American markets,
the USA, Canada, Central America and the Caribbean, through the
acquisition of Roberto Coin’s US associated company, Roberto Coin Inc., for
a total consideration of $130 million.
The acquisition of Roberto Coin Inc. builds on the Group’s proven capabilities in
showcasing luxury brands and represents a significant milestone in our stated
strategy to accelerate growth in the luxury branded jewellery category in the
US, the world’s largest and fastest growing luxury jewellery market. The
transaction marks a step change in Roberto Coin’s retail and distribution strategy,
underpinned by our retail and digital expertise and portfolio of 56 showrooms
across the US.
ROBERTO COIN ACQUISITION
On 8 May 2024 the Group acquired Roberto Coin Inc., an associated company of Roberto Coin
S.p.A., which has exclusive distribution rights for the Roberto Coin brand in North America,
Canada, Central America and the Caribbean for a total consideration of $130 million
1
.
LINK TO STRATEGY
ROBERTO COIN HIGHLIGHTS
– Roberto Coin S.p.A. was founded in 1996 and is headquartered in
Vicenza, Italy, the home of Italian jewellery
– The globally renowned brand is admired for its unique designs,
high-quality craftsmanship, and attention to detail. Each handcrafted
piece features a hidden ruby, showcasing the brand’s commitment
toexcellence
– The US precious jewellery market is by far the world’s largest jewellery
market, and the Roberto Coin brand has developed a strong position in
it, competing successfully with other top 10 industry leading brands such
as Cartier, Tiffany, Van Cleef & Arpels, BVLGARI and David Yurman
– Roberto Coin Inc. has exclusive perpetual rights to import and
distribute Roberto Coin jewellery throughout the US, Canada, Central
America and the Caribbean
– Roberto Coin Inc. sells to major department stores, jewellery groups,
and independent jewellers in more than 400 points of sale
– Roberto Coin Inc. achieved sales of approximately $139 million in 2023
– Roberto Coin Inc. continues to operate as an independent, standalone
company within the Watches of Switzerland Group
– The Coin family have retained a seat on the Roberto Coin Inc. board of
directors and Peter Webster remains as President of Roberto Coin Inc.,
supported by the exceptional experienced and dedicated team he has
built over the past 30 years
– The acquisition builds on our successful partnership with Roberto Coin,
which spans over a decade; Roberto Coin is currently available in 16
Group showrooms in the US
1 $10 million is deferred and contingent on the future profitability of the business, subject to working capital adjustments.
4 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC RATIONALE FOR THE ACQUISITION OF ROBERTO COIN INC
Luxury branded jewellery is a core pillar of the Group’s growth strategy;
the trend within the global luxury jewellery market is towards branded
jewellery which made up 27% of the market in 2024, up from 17% in 2019.
The acquisition builds on the Group’s proven capabilities in showcasing
luxury brands across both watches and jewellery and will significantly
enhance our strategic positioning in the luxury branded jewellery category
in the US, the world’s largest luxury jewellery market on a per capita basis.
The Group will leverage its operational and retailing expertise to drive
incremental growth in the Roberto Coin Inc. business, both across Robert
Coin Inc.’s wholesale distribution and well as Direct To Consumer (DTC)
in the Group’s retail boutiques and online:
Expansion opportunities in wholesale
– Grow the wholesale business under the leadership of Peter Webster
– Expand the wholesale network with independent retailers
– Develop joint business plans with wholesale partners
– Grow the export market outside of the US
DTC through the Group’s showroom portfolio and online
– Vertical margin gains through securing product direct from Roberto
Coin S.p.A.
– Increasing the number of points of sale within the showroom portfolio
– Using the Group’s CRM and clienteling capabilities to drive sales
– Growing the high-end Roberto Coin Collection
Opportunities for both DTC and wholesale
– Elevating the showroom presentation of the brand through the
development of market-leading shop-in-shop display formats
– Opening mono-brand boutiques and franchise stores
– Investing in brand marketing, including digital, to drive brand awareness
– Developing the online proposition
Brian Duffy, Chief Executive Officer of the Watches of Switzerland
Group, commented on the day of the acquisition:
“We have partnered with Roberto Coin for over a decade in the US, retailing its
elegant jewellery in a number of our Mayors’ showrooms. It is a hugely popular,
growing brand, occupying a strong position in the market, underpinned by
product quality, design creativity and imagination.
We believe there is significant opportunity to leverage our proven retail
expertise in luxury branded jewellery. The luxury branded jewellery category
has consistently outperformed the wider jewellery sector, and we see further
strategic and operational opportunities for the business within the broader
Group. We are committed to our new wholesale partners and excited to work
with them and help them grow with Roberto Coin.
Today’s strategically and financially attractive acquisition is indicative of our
ambition and the momentum we are building in this exciting category. It will
allow us to take one of the fastest growing jewellery brands in the US and use
our retail and operational expertise to accelerate growth and further elevate the
Roberto Coin proposition in North and Central America.
It has been a great pleasure getting to know Roberto and Peter over the last 18
months while we have been discussing this exciting opportunity. We are
enormously appreciative of the trust Roberto, his family and Peter Webster
have placed in us for this important next stage of the brand’s development. We
are delighted to welcome Roberto Coin Inc. colleagues into the Group and look
forward to working closely with Roberto and Peter.”
In addition, Roberto Coin, Founder and CEO of Roberto Coin,
commented on the day:
“Today’s announcement marks a significant step change in the development of
Roberto Coin Inc. Roberto Coin is synonymous with design creativity, diversity,
innovation and imagination. We are delighted to have partnered with the
Watches of Switzerland Group, who have a real understanding and appreciation
of our unique, world-class brand and products, and can accelerate our retail
strategy in North and Central America. We look forward to benefitting from
their wealth of luxury retail and digital experience to unleash the growth
potential of the Roberto Coin brand across our chosen markets.”
47
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ABOUT THE ROBERTO COIN BRAND
Roberto Coin is a brand of fine jewellery whose operational and production
headquarters are located in the heart of Vicenza, otherwise known as the City of
Gold because of the proliferation of goldsmiths. Roberto Coin jewellery champions
the traditional values of Italian artisanship, with Coin’s immense creativity and his
love of fashion and the arts being channelled through every piece.
The brand has become famous throughout the world for its collections’ design
and technological innovation, which pay homage to, and revolutionise ancient
Italian manufacturing techniques, as well as for its particular “art of creating
newauthenticity”.
Roberto Coin, the brand’s founder, designer and eclectic businessman, defines
his desire to make collections that are always distinct and to guarantee that each
piece of jewellery is perceived as unique. Far from standardised, the brand avoids
aesthetic traits that would make it easily recognisable.
Roberto Coin prefers that the details of artisanship tell the story of his mission
to create beauty – mixing the past with the present and the codes of elegance
with the forms of art and architecture that inspire him, particularly as he’s
walking through the alleyways of Venice, the city where he was born.
Another fundamental element that ties the collections together and has made
the brand an icon of refinement throughout the world, is a small signature ruby
found inside every piece. It’s positioned so that it’s in contact with the wearer’s
skin, respecting the ancient legend that rubies could confer a long and happy life.
This precious signature has always been the message that the brand dedicates to
each of its clients. Loved by movie and fashion stars, Roberto Coin’s jewellery
takes centre stage on international red carpets and countless editorial pages. In
part, this is a result of the brand’s tireless ethical commitment, a beacon that has
illuminated Roberto Coin since its foundation; a commitment that includes the
activities of the Kimberley Process, World Diamond Council, Dodd Frank Act,
Responsible Jewellery Council, CIBJO and carbon offsetting.
Today Roberto Coin is universally recognised as a pioneering talent in conceiving
new trends and as a man capable of balancing creativity and commerce in the
name of a success that is as brilliant as it is responsible.
Roberto’s creations have conquered more than 60 countries around the world,
the United States being the largest market, where the brand is a leader in the
jewellery industry along with the most important brands.
OUR STRATEGY IN ACTION
continued
4 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ABOUT MR ROBERTO COIN
After a first successful career in the world of hospitality in Great Britain, at the
age of 32, Roberto Coin decides to return to his home country, Italy and turn a
new page in his life. Driven by his natural passion for style and exclusivity, he
approaches the jewellery world accompanied by a great will to learn and to
dialogue with the main international entrepreneurs and the Italian artisanal
maestros who teach him all the secrets of the industry.
In 1996, the crucial decision: creating his own jewellery brand. At this point
Roberto Coin’s vision and creativity manifest themselves freely creating
collections that are as exclusive and multifaceted as the women who wear them.
In a very short time the brand becomes recognised and esteemed worldwide.
Since the beginning, Roberto Coin has signed each one of his creations with a
small ruby set inside; a secret message of good wishes dedicated to his clients
that over the years has conferred him the nickname of ‘The Collector of Rubies’.
Beyond the grand success of his creations, in 2009 and in 2013 Roberto Coin
was invested by the Italian Republic with the titles of Grand Officer and
Commander Order of Merit. He is also a member of the board of directors of
the World Diamond Council, the organisation that collaborated with UN to
create the Kimberly Process.
In the last 20 years he has been awarded with many different prizes, relating
to the beauty of his collections and also to his direct efforts in corporate
socialresponsibility.
Today Roberto Coin lives between Vicenza and Venice and continues his travels
around the world where he takes inspiration for five new collections every year.
THE MAGICAL RUBY SIGNATURE
The idea of the ruby as a symbolic signature comes from an ancient time and the
pages of antique books. A passion for history and mythology led Roberto Coin
to discover three very special stories. Three tales that mixed reality and
imagination, as is the nature of every true legend, which led him to a fundamental
choice for his future.
The first legend belongs to the world of ancient Egypt. The pharaohs believed
that the ruby was a sort of talisman capable of, if kept in contact with the skin,
guaranteeing love, joy and everlasting health.
The second legend narrates the tale of Burmese warriors who wore the ruby
for protection on the battlefield. And lastly, the third legend comes from an old
Hindu myth in which rubies were considered to be the precious fruits of the
sacred Kalpa tree – the tree of hopes and desires.
Roberto Coin found a passionate, meaningful symbol in the ruby and decided to
identify the soul and the mission of his creative world with this little precious stone.
In 1996, the launch of the Appassionata collection marked not only the beginning
of the brand’s history, but also the first time that the magical signature, a small
ruby with an immense story, was set in the inside of every piece of the collection.
The now famous hidden ruby conveys a message of goodwill from Roberto Coin,
combining the ardour of courage, the passion of love and the vitality of hope.
49
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
New Repairs and Service Centre, Leicester, opened in FY24
OUR STRATEGY IN ACTION
continued
The Group estimates repairs and servicing represents approximately 5% of
the market, which is primarily supported by traditional multiple and
independent retailers and brand in-house resources.
Our in-house expertise differentiates us from competitors and positions us as a
trusted authority, allowing us to provide clients with a convenient and reliable
service, maintain greater control over the quality of repairs and keep more
watches and jewellery at their highest use and value for as long as possible.
In FY24, our investment included the addition of a 6,000 sq. ft state-of-the-art
Repairs and Servicing Centre in Leicester, allowing our UK teams to accommodate
a further 14,000 repairs over the next three years, while providing repairs and
servicing support for strategic brand partners. This important addition to the
existing Manchester service centre and nine showroom-based watch workshops,
gives us the largest luxury watch services provision of any retailer in the UK.
We also relocated our Newcastle watch workshop to facilitate another six
repairs and servicing specialists. Phase one of a new client facing repairs system
was rolled out across all UK showrooms, with phase two being developed which
will allow clients to track their repairs
In the US, our Repairs and Servicing Group (RSG) comprises two strategically
located service centres to support the full repairs and servicing needs of our Mayors,
Watches of Switzerland, Betteridge, mono-brands and Analog:Shift businesses. In
FY24, we grew our RSG capacity by almost 2,700 sq. ft to accommodate a further
28 watch makers and technicians, and meet demand, with repairs increasing 85%
from FY22 to FY24.
See page 103 for more information on how we are growing our team of highly
skilled and accredited watchmakers, accelerating repair and servicing turnaround
times and supporting the growth of Rolex Certified Pre-Owned.
REPAIRS AND SERVICING
We continue to invest in repairs and servicing, which is critical to the success of
our pre-owned businesses and achieving our circularity goals, while contributing
toclient loyalty and repeat business.
LINK TO STRATEGY
5 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
51
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
HOW THE GROUP
MEASURES PERFORMANCE
Key Performance Indicators (KPIs) are designed to measure the development, performance and position of the business.
Certain KPIs are Alternative Performance Measures (APMs). The Directors use these measures as they provide additional
useful information and analyses on the underlying trends, performance and position of the Group. The APMs are not
defined by IFRS and therefore may not be directly comparable with other companies’ APMs. These measures are not
intended to be a substitute for, or superior to, IFRS measures.
KEY PERFORMANCE INDICATORS
REVENUE OPERATING PROFIT/EBIT ADJUSTED EBIT BASIC EPS ADJUSTED EPS RETURN ON
CAPITAL EMPLOYED
DEFINITION AND PURPOSE
Revenue is stated exclusive of sales taxes and is
measured in accordance with IFRS 15 ‘Revenue
from contracts with customers’.
Growing revenue is a key pillar of our business
strategy.
DEFINITION AND PURPOSE
Statutory measure under IFRS representing
Profit/Earnings Before Interest and Taxation.
Growing profit is a key pillar of our business strategy.
DEFINITION AND PURPOSE
Operating profit before exceptional items and IFRS 16
impact. This is a measure of profitability that excludes
one-off exceptional items and IFRS 16 adjustments to
allow for comparability between years.
This measure is defined as segment profit under
IFRS 8 ‘Operating segments’ and is reconciled to
Profit Before Taxation on an IFRS basis in note 2
to the Financial Statements.
Growing profit is a key pillar of our business strategy.
This measure was linked to the Executive
performance target for the FY24 annual bonus.
Further detail can be found in the Remuneration
Committee Report on page 176.
DEFINITION AND PURPOSE
Basic EPS is a statutory measure defined by IAS 33
‘Earnings Per Share’. EPS is a direct measure of
profitability per share held in the Group.
Growing Basic EPS is a key pillar of our business
strategy.
DEFINITION AND PURPOSE
Basic Earnings Per Share adjusted for exceptional
items as disclosed in note 4 to the Financial
Statements. This measure is reconciled to statutory
measures in note 9 to the Financial Statements.
This is a measure of profit per share held in the
Group, excluding exceptional items and IFRS 16
adjustments. This presents the Group’s underlying
performance without distortion from one-off or
non-trading events to provide comparability
between years.
Growing Adjusted EPS is a key pillar of our business
strategy. This measure is linked to the Executive
performance target for the LTIP incentives.
Further detail can be found in the Remuneration
Committee Report on page 176.
DEFINITION AND PURPOSE
Return on Capital Employed (ROCE) is defined
as Adjusted EBIT divided by average capital
employed. Average capital employed is total
assets less current liabilities on a pre-IFRS 16
basis. The calculation for ROCE is included in the
Glossary on page 256.
ROCE demonstrates the efficiency with which
the Group utilises capital, and is a key pillar of
our business strategy.
This measure is linked to the Executive
performance target for the LTIP incentives.
Further detail can be found in the Remuneration
Committee Report on page 176.
PERFORMANCE (£ MILLION)
1,542.8
1,537.9
1,238.0
905.1
FY23
FY24
FY22
FY
21
Group revenue is in line with the prior year and
market guidance provided in January 2024.
Further details on the revenue performance in
the year can be found in the Financial Review on
pages 56 to 61.
PERFORMANCE (£ MILLION)
142.1
81.9
178.6
120.0
FY23
FY24
FY22
FY
21
Operating profit reduced by 33% in the year,
behind revenue growth. The reported number is
after the impact of £33.2 million of exceptional
costs (see note 4 in the Consolidated Financial
Statements for details).
Further details on profit performance in the year
can be found in the Financial Review on pages 56
to 61.
PERFORMANCE (£ MILLION)
130.3
77.6
165.1
134.7
FY23
FY24
FY22
FY
21
Adjusted EBIT reduced by 18% on the prior year,
behind revenue growth driven by higher costs.
This is in line with market guidance provided in
January 2024.
Further details on profit performance in the year
can be found in the Financial Review on pages 56
to 61.
PERFORMANCE (p)
42.2
51.2
25.0
21.1
FY23
FY24
FY22
FY
21
Basic EPS has reduced from 51.2p to 25.0p in
the year, reflecting the decreased profitability
inthe year.
For further detail please refer to note 9 in the
Consolidated Financial Statements on page 228.
PERFORMANCE (p)
41.8
52.7
38.0
23.8
FY23
FY24
FY22
FY
21
FY24 Adjusted EPS reduced by 28% relative
to the prior year, reflecting the decrease in
profitability during the year.
For further detail please refer to note 9 in the
Consolidated Financial Statements on page 228.
PERFORMANCE (%)
27.4
27.9
19.5
19.7
FY23
FY24
FY22
FY
21
ROCE has reduced by 840bps to 19.5% in the
year. The decrease largely reflects the decrease
inAdjusted EBIT.
Further details on the performance in the year
can be found in the Financial Review on pages 56
to 61.
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
8
10
FINANCIAL PERFORMANCE
52
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PRINCIPAL RISKS AND UNCERTAINTIES
7
Regulatory and compliance
8
Economic and political
9
Brand and reputational damage
0
Financial and treasury
Climate change
Business strategy execution and development
2
Key suppliers and supply chain
3
Client experience and market risks
4
Colleague talent and capability
5
Data protection and cyber security
6
Business interruption
STRATEGIC PRIORITIES
Grow revenue, profit and
Return on Capital Employed
Enhance strong brand partnerships
Deliver an exceptional client service
Drive client awareness and brand image
Leverage best-in-class operations
Expand multi-channel leadership
Continue to advance the ESG agenda
REVENUE OPERATING PROFIT/EBIT ADJUSTED EBIT BASIC EPS ADJUSTED EPS RETURN ON
CAPITAL EMPLOYED
DEFINITION AND PURPOSE
Revenue is stated exclusive of sales taxes and is
measured in accordance with IFRS 15 ‘Revenue
from contracts with customers’.
Growing revenue is a key pillar of our business
strategy.
DEFINITION AND PURPOSE
Statutory measure under IFRS representing
Profit/Earnings Before Interest and Taxation.
Growing profit is a key pillar of our business strategy.
DEFINITION AND PURPOSE
Operating profit before exceptional items and IFRS 16
impact. This is a measure of profitability that excludes
one-off exceptional items and IFRS 16 adjustments to
allow for comparability between years.
This measure is defined as segment profit under
IFRS 8 ‘Operating segments’ and is reconciled to
Profit Before Taxation on an IFRS basis in note 2
to the Financial Statements.
Growing profit is a key pillar of our business strategy.
This measure was linked to the Executive
performance target for the FY24 annual bonus.
Further detail can be found in the Remuneration
Committee Report on page 176.
DEFINITION AND PURPOSE
Basic EPS is a statutory measure defined by IAS 33
‘Earnings Per Share’. EPS is a direct measure of
profitability per share held in the Group.
Growing Basic EPS is a key pillar of our business
strategy.
DEFINITION AND PURPOSE
Basic Earnings Per Share adjusted for exceptional
items as disclosed in note 4 to the Financial
Statements. This measure is reconciled to statutory
measures in note 9 to the Financial Statements.
This is a measure of profit per share held in the
Group, excluding exceptional items and IFRS 16
adjustments. This presents the Group’s underlying
performance without distortion from one-off or
non-trading events to provide comparability
between years.
Growing Adjusted EPS is a key pillar of our business
strategy. This measure is linked to the Executive
performance target for the LTIP incentives.
Further detail can be found in the Remuneration
Committee Report on page 176.
DEFINITION AND PURPOSE
Return on Capital Employed (ROCE) is defined
as Adjusted EBIT divided by average capital
employed. Average capital employed is total
assets less current liabilities on a pre-IFRS 16
basis. The calculation for ROCE is included in the
Glossary on page 256.
ROCE demonstrates the efficiency with which
the Group utilises capital, and is a key pillar of
our business strategy.
This measure is linked to the Executive
performance target for the LTIP incentives.
Further detail can be found in the Remuneration
Committee Report on page 176.
PERFORMANCE (£ MILLION)
1,542.8
1,537.9
1,238.0
905.1
FY23
FY24
FY22
FY
21
Group revenue is in line with the prior year and
market guidance provided in January 2024.
Further details on the revenue performance in
the year can be found in the Financial Review on
pages 56 to 61.
PERFORMANCE (£ MILLION)
142.1
81.9
178.6
120.0
FY23
FY24
FY22
FY
21
Operating profit reduced by 33% in the year,
behind revenue growth. The reported number is
after the impact of £33.2 million of exceptional
costs (see note 4 in the Consolidated Financial
Statements for details).
Further details on profit performance in the year
can be found in the Financial Review on pages 56
to 61.
PERFORMANCE (£ MILLION)
130.3
77.6
165.1
134.7
FY23
FY24
FY22
FY
21
Adjusted EBIT reduced by 18% on the prior year,
behind revenue growth driven by higher costs.
This is in line with market guidance provided in
January 2024.
Further details on profit performance in the year
can be found in the Financial Review on pages 56
to 61.
PERFORMANCE (p)
42.2
51.2
25.0
21.1
FY23
FY24
FY22
FY
21
Basic EPS has reduced from 51.2p to 25.0p in
the year, reflecting the decreased profitability
inthe year.
For further detail please refer to note 9 in the
Consolidated Financial Statements on page 228.
PERFORMANCE (p)
41.8
52.7
38.0
23.8
FY23
FY24
FY22
FY
21
FY24 Adjusted EPS reduced by 28% relative
to the prior year, reflecting the decrease in
profitability during the year.
For further detail please refer to note 9 in the
Consolidated Financial Statements on page 228.
PERFORMANCE (%)
27.4
27.9
19.5
19.7
FY23
FY24
FY22
FY
21
ROCE has reduced by 840bps to 19.5% in the
year. The decrease largely reflects the decrease
inAdjusted EBIT.
Further details on the performance in the year
can be found in the Financial Review on pages 56
to 61.
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
3
4
8
9
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
8
10
FINANCIAL PERFORMANCE
53
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
NUMBER OF SHOWROOMS
COLLEAGUE
ENGAGEMENT SURVEY
ESG – CARBON EMISSIONS ESG – CIRCULARITY
DEFINITION AND PURPOSE
Number of showrooms at the end of the
financial year. This metric demonstrates the
Group’s size and scale.
DEFINITION AND PURPOSE
Strong engagement is an important indicator of
culture, retention, productivity and ultimately
business performance. In line with our
commitment to complete an annual Colleague
Engagement Survey, our most recent survey was
completed in January 2024.
DEFINITION AND PURPOSE
The Board has made a commitment to achieve net-
zero emissions by 2050. This KPI reflects the
Group’s near-term commitment to reduce Scope 1
and 2 carbon emissions by 50% by 2030. The KPI
reported is the total gross Scope 1 and Scope 2
emissions (tCO
2
e).
In March 2023, the Science Based Targets initiative
(SBTi) have provided external validation of our
near-term emissions reduction target.
DEFINITION AND PURPOSE
Supporting circularity of luxury watches,
measured by the number of watches repaired,
serviced or resold as a percentage of the
number of new watch sales. This metric aligns to
our ESG pillars.
NUMBER OF SHOWROOMS
131
146
167
124
40
47
56
30
171
193
223
Total
154
UK and
Europe
US
FY24 FY23 FY22 FY2
In the UK and Europe, the Group opened 12
showrooms, acquired 15 and closed six. In the
US, the Group opened ten showrooms and
closed one showroom.
Our 223 showrooms includes 99 dedicated
mono-brand boutiques.
COLLEAGUE ENGAGEMENT (%)
86%
81%
76%
85%
FY23
FY24
FY22
FY
21
Colleague engagement in the year was measured
at 76%, a decrease from the prior year, but
remains significantly higher than the average for
the retail sector. Further detail can be found in the
Environmental, Social and Governance section on
page 82.
PERFORMANCE (tCO
2
e)
1,875
1,906
1,723
1,411
3,598
3,866
1,848
2,038
1,828
Total
3,307
UK and
Europe
US
0.0029
0.0025
0.0037
Scope 1 and 2 intensity ratio
(tCO
2
e per £'000 revenue)
FY23
FY22
FY
21
FY24 FY23 FY22 FY21
2,385
4,233
FY24
0.0028
Absolute carbon emissions have increased in line
with increased showroom numbers.
Further detail can be found in the Environmental,
Social and Governance section on page 121.
PERFORMANCE
45%
44%
46%
36%
FY23
FY24
FY22
FY
21
This indicator pertains to our goal to extend the
life of luxury watches. FY24 was ahead of the prior
year, and we intend to increase circularity year-on-
year, driven by Rolex Certified Pre-Owned.
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
4
11
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
4
11
LINK TO PRINCIPAL RISKS AND
UNCERTAINTIES
7
8
9
11
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
8
9
11
CASH GENERATED
FROM OPERATIONS
AVERAGE SELLING PRICE
DEFINITION AND PURPOSE
Cash generated from operations is defined
under IAS 7 ‘Statement of Cash Flows’. This isa
direct measure of cash generation from the
operations of the business excluding financing,
investing, tax and defined benefit pension
contributions.
DEFINITION AND PURPOSE
Average selling price (ASP) represents revenue
generated (including sales-related taxes) in a period
from sales of the category, divided by the total
number of units of such products sold during the
period. This metric is a measure of sales performance.
Luxury watches are defined as those that have a
Recommended Retail Price greater than £1,000.
Luxury jewellery is defined as those that have a
Recommended Retail Price greater than £500.
PERFORMANCE (£ MILLION)
186.6
239.2
225.5
169.8
FY23
FY24
FY22
FY
21
Cash generated from operations decreased by
£13.7 million but remains strong in the year.
Further details on cash flow performance in the
year can be found in the Financial Review on
pages 56 to 61.
PERFORMANCE
Luxury
watches
Luxury
jewellery
Luxury
watches
Luxury
jewellery
5,523
6,284
6,689
1,508
13,246
5,253
5,940
1,318
1,453
1,208
11,476
12,006
12,818
6,099
6,830
5,221
UK and Europe (£)
US ($)
FY24 FY23 FY22 FY21
The total luxury watches ASP has increased in all
geographies due to pricing and the mix of
products sold. Luxury jewellery ASP increased in
the UK and Europe, but decreased in the US due
to the mix of products sold.
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
8
10
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
8
NON-FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE
KEY PERFORMANCE INDICATORS
continued
5 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PRINCIPAL RISKS AND UNCERTAINTIES
7
Regulatory and compliance
8
Economic and political
9
Brand and reputational damage
0
Financial and treasury
Climate change
Business strategy execution and development
2
Key suppliers and supply chain
3
Client experience and market risks
4
Colleague talent and capability
5
Data protection and cyber security
6
Business interruption
STRATEGIC PRIORITIES
Grow revenue, profit and
Return on Capital Employed
Enhance strong brand partnerships
Deliver an exceptional client service
Drive client awareness and brand image
Leverage best-in-class operations
Expand multi-channel leadership
Continue to advance the ESG agenda
NUMBER OF SHOWROOMS
COLLEAGUE
ENGAGEMENT SURVEY
ESG – CARBON EMISSIONS ESG – CIRCULARITY
DEFINITION AND PURPOSE
Number of showrooms at the end of the
financial year. This metric demonstrates the
Group’s size and scale.
DEFINITION AND PURPOSE
Strong engagement is an important indicator of
culture, retention, productivity and ultimately
business performance. In line with our
commitment to complete an annual Colleague
Engagement Survey, our most recent survey was
completed in January 2024.
DEFINITION AND PURPOSE
The Board has made a commitment to achieve net-
zero emissions by 2050. This KPI reflects the
Group’s near-term commitment to reduce Scope 1
and 2 carbon emissions by 50% by 2030. The KPI
reported is the total gross Scope 1 and Scope 2
emissions (tCO
2
e).
In March 2023, the Science Based Targets initiative
(SBTi) have provided external validation of our
near-term emissions reduction target.
DEFINITION AND PURPOSE
Supporting circularity of luxury watches,
measured by the number of watches repaired,
serviced or resold as a percentage of the
number of new watch sales. This metric aligns to
our ESG pillars.
NUMBER OF SHOWROOMS
131
146
167
124
40
47
56
30
171
193
223
Total
154
UK and
Europe
US
FY24 FY23 FY22 FY2
In the UK and Europe, the Group opened 12
showrooms, acquired 15 and closed six. In the
US, the Group opened ten showrooms and
closed one showroom.
Our 223 showrooms includes 99 dedicated
mono-brand boutiques.
COLLEAGUE ENGAGEMENT (%)
86%
81%
76%
85%
FY23
FY24
FY22
FY
21
Colleague engagement in the year was measured
at 76%, a decrease from the prior year, but
remains significantly higher than the average for
the retail sector. Further detail can be found in the
Environmental, Social and Governance section on
page 82.
PERFORMANCE (tCO
2
e)
1,875
1,906
1,723
1,411
3,598
3,866
1,848
2,038
1,828
Total
3,307
UK and
Europe
US
0.0029
0.0025
0.0037
Scope 1 and 2 intensity ratio
(tCO
2
e per £'000 revenue)
FY23
FY22
FY
21
FY24 FY23 FY22 FY21
2,385
4,233
FY24
0.0028
Absolute carbon emissions have increased in line
with increased showroom numbers.
Further detail can be found in the Environmental,
Social and Governance section on page 121.
PERFORMANCE
45%
44%
46%
36%
FY23
FY24
FY22
FY
21
This indicator pertains to our goal to extend the
life of luxury watches. FY24 was ahead of the prior
year, and we intend to increase circularity year-on-
year, driven by Rolex Certified Pre-Owned.
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
1
2
4
11
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
4
11
LINK TO PRINCIPAL RISKS AND
UNCERTAINTIES
7
8
9
11
LINK TO KEY PRINCIPAL RISKS AND
UNCERTAINTIES
8
9
11
NON-FINANCIAL PERFORMANCE
ESG KPIs linked to new multicurrency revolving loan facility in the year.
55
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
FINANCIAL REVIEW
56
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
The Group’s Consolidated Income Statement is shown below which is
presented including IFRS 16 ‘Leases’ and includes exceptional items.
All growth rates in this report are calculated on unrounded numbers.
Income Statement – post-IFRS 16
andexceptional items (£million)
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023
YoY
variance
Revenue 1,537.9 1,542.8 -%
Operating profit 120.0 178.6 -33%
Net finance cost (27.9) (23.8) -17%
Profit before taxation 92.1 154.8 -40%
Tax ation (33.0) (33.0) -%
Profit for the financial period 59.1 121.8 -51%
Basic Earnings Per Share 25.0p 51.2p -51%
Management monitors and assesses the business performance on a pre-IFRS 16
and exceptional items basis, which is shown below. This aligns to the reporting
used to inform business decisions, investment appraisals, incentive schemes and
debt covenants. A full reconciliation between the pre- and post-IFRS 16 results
is shown in the Glossary on page 257.
Income Statement – pre-IFRS 16
andexceptional items (£million)
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023
YoY
variance
Revenue 1,537.9 1,542.8 -%
Net margin
1
562.2 576.3 -2%
Showroom costs (289.1) (279.2) 4%
4-Wall EBITDA
1
273.1 297.1 -8%
Overheads (85.3) (84.1) -1%
EBITDA
1
187.8 213.0 -12%
Showroom opening and closing costs (8.9) (11.6) -24%
Adjusted EBITDA
1
178.9 201.4 -11%
Depreciation, amortisation and loss on
disposal of fixed assets
(44.2) (36.3) -22%
Adjusted EBIT
1
(Segment profit) 134.7 165.1 -18%
Net finance costs (5.8) (5.9) -2%
Adjusted profit before taxation
1
128.9 159.2 -19%
Adjusted Earnings Per Share
1
38.0p 52.7p -28%
REVENUE
Revenue by geography and category
52 weeks ended
28 April 2024
(£million)
UK and
Europe US Total Mix
Luxury watches
2
709.4 635.3 1,344.7 87%
Luxury jewellery
3
62.1 40.3 102.4 7%
Services/other 74.6 16.2 90.8 6%
Total revenue 846.1 691.8 1,537.9 100%
52 weeks ended
30 April 2023
(£million)
UK and
Europe US Total Mix
Luxury watches 749.6 586.5 1,336.1 87%
Luxury jewellery 67.8 51.4 119.2 7%
Services/other 72.5 15.0 87.5 6%
Total revenue 889.9 652.9 1,542.8 100%
Group revenue was flat on last year at £1,537.9 million (+2% on a constant
currency basis).
Group revenue from luxury watches grew by +1% (+3% in constant currency)
on the prior year and made up 87% of revenue in line with the prior year.
Demand for our key brands, particularly products on Registration of Interest
lists, continues to be strong, with consistent additions and conversions. Recent
price increases across luxury watch brands, driven by cost inflation and foreign
currency movements, have impacted affordability for some consumers,
particularly in the UK, where the challenging macroeconomic backdrop was
more pronounced as inflation remained higher throughout the year. We believe
this has led to a deferral of purchases amongst a certain cohort of consumers.
The Rolex Certified Pre-Owned programme was launched in the US in July
2023 and in the UK in September 2023. Rolex Certified Pre-Owned is currently
available in 19 agencies in the UK and 17 in the US and also available online. The
performance of this programme has exceeded our expectations, and we will be
rolling it into more showrooms during FY25. The sourcing of product for the UK
market has become easier as we have continued to look for opportunities to
grow. Total pre-owned and vintage (including Rolex Certified Pre-Owned) sales
doubled year-on-year by Q4 FY24 and we see pre-owned as being a major
growth factor for the Group.
Group luxury jewellery revenue declined by -14% (-13% in constant currency) on
the prior year. This reflected market trends impacted by overall consumer
sentiment, particularly within the bridal category, although we did see improving
trends in Q4 FY24 with Group luxury jewellery revenue -1%. The majority of
luxury jewellery sold by the Group is retailed under our house brands of
Goldsmiths, Mappin & Webb, Mayors and Betteridge. Our strategy is to grow
our luxury branded jewellery offering, where we partner with other major
luxury jewellery brands. Luxury branded jewellery sales continue to significantly
outperform non-branded jewellery.
1
This is an Alternative Performance Measure and is shown on a pre-IFRS 16 basis. Refer to the Glossary on pages 254 to 257 for definition, purpose and reconciliation to statutory measures whererelevant.
2 Luxury watches are defined as those that have a Recommended Retail Price greater than £1,000.
3 Luxury jewellery is defined as those that have a Recommended Retail Price greater than £500.
57
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Services/other revenue, consisting of servicing, repairs, insurance services and
the sale of fashion and classic watches and other non-luxury jewellery grew by
+4%. During the year we expanded our Manchester servicing and repairs centre,
which is now dedicated to Rolex, and opened a new servicing and repairs centre
in Leicester.
Group ecommerce
4
sales declined by -11% compared to the prior year, impacted
by the mix of products sold through this channel and performance of the UK
market. We continue to be the market leader in ecommerce for luxury watches
and jewellery in the UK and are growing our proposition in the US.
US revenue increased by +6% year-on-year (+11% on a constant currency basis)
and the US business made up 45% of the Group’s revenue in FY24 (FY23: 42%).
Underlying growth was strong across all locations with continued consumer
appetite for high demand products. New York and the Wynn Resort, Las Vegas
performed particularly strongly. This was accomplished through a combination of
our quality product offering and superior client experience and backed up by strong
marketing campaigns which had significant reach across offline and online channels.
During the year, the US opened ten showrooms. This included eight mono-
brand boutiques in three locations: Topanga, California; New Orleans, Louisiana;
and Murray, Utah. A further two multi-brand showrooms were opened, being
a Rolex-anchored multi-brand Watches of Switzerland showroom at American
Dream, New Jersey which was fully completed in October 2023 with the
opening of a large Cartier space, and our third Watches of Switzerland
showroom in Manhattan, at One Vanderbilt in March 2024.
UK and Europe revenue declined by -5% during the year. Sales in the UK were
driven by a domestic clientele and the Group continued to grow market share.
Tourist sales continue to remain low, particularly on account of the removal of
VAT free shopping for tourists. Interest in the category remains high and
showroom colleagues continued to build strong client relationships, but the
overall market was challenging with a reduction in spend across the category.
During the year, we opened eight mono-brand boutiques in the UK, and a
further multi-brand Goldsmiths showroom in Bromley. In November 2023, the
Group completed the acquisition of 15 luxury watch showrooms from Ernest
Jones, comprised of fourteen multi-brand and one mono-brand showrooms.
Since acquisition the showrooms have been rebranded and updated with new
systems and merchandising, with training and marketing taking place to gain the
full beneficial impact of the acquisition in FY25. Six non-core showrooms were
closed giving a net increase of 18 in the UK.
In the period, 15 projects were completed enhancing our existing estate to
further elevate the partner brands we display in those showrooms and advance
our client experience; this included a number of high-turnover Goldsmith
showrooms in the Trafford Centre, Manchester; the Bullring, Birmingham; and
Metrocentre, Newcastle. The new contemporary concept Mappin & Webb
showrooms were opened in York, Guernsey, Bluewater and Glasgow.
Three showrooms were opened in Europe taking the total number to nine. In
line with our disciplined approach to capital allocation and given the pipeline of
high returning opportunities in the UK and US, the Group announced on 16 May
2024 that it intends to reallocate investment from the European market into
these higher returning regions. We are in negotiations with our brand partners
for the transfer of our existing mono-brand boutiques.
PROFITABILITY
Income Statement –
pre-IFRS 16 and exceptional
items (£million)
Profitability as a % of revenue
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023 YoY variance
Net margin
1
36.6% 37.4% (80bps)
Showroom costs 18.8% 18.1% 70bps
4-Wall EBITDA
1
17. 8% 19.3% (150bps)
Adjusted EBITDA
1
11.6% 13.1% (150bps)
Adjusted EBIT
1
8.8% 10.7% (190bps)
Net margin as a % of revenue was 36.6% in the year. This was 80bps lower than
the prior year driven by product mix and the higher cost of Interest Free Credit
due to the annualisation of interest rate rises.
Showroom costs increased by £9.9 million (+3.5%) from the prior year, to
£289.1 million. Showroom costs as a percentage of revenue increased by 70bps
from 18.1% to 18.8%. This reflects the opening of new showrooms, the annualisation
of prior year openings, showroom costs relating to the Ernest Jones acquisition and
annual pay rises to colleagues. This was partly offset by a reduction in business rates
and efficiencies found within showroom payroll, and digital marketing investment
which continues to maximise traffic and conversion versus cost.
Overheads increased by £1.2 million (+1%) due to IT investment to support
future growth, annual pay rises to colleagues along with the opening of our new
support centre in Leicester. This was partly offset by efficiencies within marketing
and a reduction in colleague incentive payments.
Showroom opening and closing costs include the cost of rent (pre-IFRS 16),
rates and payroll prior to the opening or closing of showrooms, or during
closures when refurbishments are taking place. This cost will vary annually
depending on the scale of expansion in the year. Total costs for the year were
£8.9 million versus £11.6 million in FY23, reflecting the decreased number of
refurbishments and openings undertaken.
Exceptional items
Exceptional items are defined by the Group as those which are significant in
magnitude or are linked to events which are expected to be infrequent in nature.
The majority of the items below do not have a cash impact.
Exceptional items (£million)
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023
Business acquisitions costs
3.3 0.9
Rolex Old Bond Street 2.5 –
European showroom impairment 8.6 –
Showroom impairment
– Impairment of property, plant and equipment 7.2 –
– Impairment of right-of-use assets 13.0 –
– Other onerous contracts 1.0 –
– Reversal of impairment – (0.7)
Reversal of inventory provision created on acquisition (2.4) –
Amortisation of capitalised transaction costs – 0.7
Total exceptional items 33.2 0.9
Of which impacts:
Adjusted EBIT 31.9 0.2
Finance costs 1.3 0.7
4 Ecommerce sales are sales which are transacted online.
5 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
FINANCIAL REVIEW
continued
Business acquisition costs
Professional and legal expenses and integration costs on business combinations
have been expensed to the Consolidated Income Statement as an exceptional
cost as they are regarded as non-trading, non-underlying costs and are
considered to be material by nature. The total cost shown here also includes
expenses incurred in the year in relation to the Roberto Coin Inc. acquisition
which completed post year end.
Rolex Old Bond Street
A new 7,200 sq. ft showroom is being built in partnership with Rolex. This new
flagship will be our largest Rolex showroom and reflects the importance of the
London market and the special relevance of London to the history of Rolex. The
cost shown here is the IFRS 16 depreciation charge and other costs whilst the
showroom is being constructed. They are deemed to be exceptional in nature
given that this unique proposition results in a project size and complexity
significantly outside of a standard build, coupled with documented project delays
outside of the Group’s control.
European showroom impairment
The exceptional costs are reflective of both asset write downs and onerous
contracts in relation to the European showrooms. In line with our disciplined
approach to capital allocation and given the pipeline of high returning
opportunities in the UK and US, the Group announced after the year end date,
it intends to reallocate investment from the European market into these higher
returning regions. We are in negotiations with our brand partners for the
transfer of a number of our existing European mono-brand boutiques.
Showroom impairment
The current macroeconomic environment, increased interest rates, and
inflationary trends gave rise to indicators of impairment in the current period.
Consequently, discounted cashflows were performed on all cash generating
units (CGUs) with indicators of impairment. This resulted in a non-cash
impairment charge of £26.2 million, of which £16.4 million related to right-of-use
assets (ROU assets). A significant proportion of the ROU assets impairment
arose due to the differences between the interest rates used to initially recognise
the ROU asset and the much higher interest rates in place at the year-end used
in formulating the discount rates to value the future cash flows. A further
provision of £1.0 million relates to associated onerous contracts. See note 4 of
the Consolidated Financial Statements for further details.
Reversal of inventory provision created on acquisition
In the prior period, for the Betteridge acquisition, an estimate was made of the
fair value of inventory acquired with a provision recorded in goodwill. During the
year, the Group achieved higher product margins on a number of these inventory
lines through maximisation of our CRM database. The gain is deemed to be
exceptional in nature.
ADJUSTED EBIT AND STATUTORY OPERATING PROFIT
As a result of the items noted above, Adjusted EBIT was £134.7 million, a decrease
of £30.4 million -18% on the prior year.
After accounting for exceptional costs of £31.9 million and IFRS 16 adjustments
of +£17.2 million, statutory operating profit (EBIT) was £120.0 million, a decrease
of 33% on the prior year.
FINANCE COSTS
Net finance costs (£million)
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023
Pre-IFRS 16 net finance costs,
excludingexceptionals
5.8 5.9
IFRS 16 interest on lease liabilities 20.8 17.2
Total net finance costs,
excludingexceptionals
26.6 23.1
Interest payable on borrowings increased in the period, reflecting higher market
lending rates and further borrowing to fund the acquisition of 15 showrooms
from Ernest Jones. This was offset by higher interest rates earned on cash
balances held, and the ability to be more flexible throughout the year with the
new multicurrency revolving credit facility. The impact was a net reduction in the
pre-IFRS 16 interest charge of £0.1 million to £5.8 million. The IFRS 16 interest
on lease liabilities increased by £3.6 million due to recent additions to the lease
portfolio as we continue to invest in showroom portfolio expansion.
Details of a further £1.3 million of exceptional finance costs are given in note 4
of the Consolidated Financial Statements.
TAXATION
The pre-IFRS 16 Effective Tax Rate (ETR) for the period before exceptional
items was 30.3%. The increase versus our guided ETR is partly driven by the
impact of the reduced share price on the share based payments charge. Full
detail can be found in note 8 within the Consolidated Financial Statements.
The statutory (post-IFRS 16 and including exceptionals) effective tax rate was
35.8%. This is higher than the applicable UK corporation tax rate for the year of
25.0% as a result of higher chargeable taxes on US profits, the impact of
expenses disallowed for corporation tax, and non-recognition of deferred taxes
in Europe.
BALANCE SHEET
Balance Sheet (£million) 28 April 2024 30 April 2023
Goodwill and intangibles 215.7 200.4
Property, plant and equipment 191.4 154.4
Right-of-use assets 381.8 359.1
Inventories 393.3 356.0
Trade and other receivables 24.6 19.8
Trade and other payables (216.5) (219.6)
Lease liabilities (460.4) (410.4)
Net cash
1
0.7 16.4
Other
(7. 6) (6.8)
Net assets 523.0 469.3
Goodwill increased as a result of the Ernest Jones showroom acquisition in the
year which gave rise to £16.0 million of goodwill, together with a £0.5 million
favourable exchange impact. A further £2.4 million of computer software
additions were made in the year as part of ongoing IT developments, offset by
amortisation of £2.8 million.
59
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Property, plant and equipment increased by £37.0 million in the year. Additions
of £87.4 million (including £5.8 million from the Ernest Jones acquisition) were
offset by depreciation of £39.7 million, impairments of £9.8 million, and a loss on
disposal and foreign exchange movements of £0.9 million.
Including software costs, which are disclosed as intangibles, capital additions
(including accruals) were £84.0 million in the year of which £81.3 million (FY23:
£73.0 million) was expansionary. Expansionary capex relates to new showrooms,
relocations or major refurbishments (defined as costing over £0.25 million). In
the year, the Group opened 22 new showrooms, and refurbished 15 showrooms.
Investment in our portfolio is paramount to our strategy andthe Group follows
a disciplined payback policy when making capital investment decisions.
Right-of-use assets increased by £22.7 million in the year, to £381.8 million.
Additions to the lease portfolio along with lease renewals or other lease changes
were £94.5 million. This has been offset by depreciation of £56.0 million and
impairments of £16.4 million. The remaining movement is a £0.6 million
favourable foreign exchange impact.
Lease liabilities increased by £50.0 million in the year. The portfolio changes
noted above increased the lease liability by £95.5 million. Interest charged on the
lease liability was £22.1 million and there was a £0.5 million adverse foreign
exchange impact. Lease payments were £68.1 million, giving a final lease liability
balance of £460.4 million.
Inventory levels increased by £37.3 million (+10%) compared to the prior year.
£25.3 million of inventory was acquired as part of the Ernest Jones acquisition,
and the Group increased pre-owned watches and Rolex Certified Pre-Owned
volume by £26.9 million. This has been offset through a reduction in underlying
inventory to maintain stock turn at appropriate levels. The inventory obsolescence
risk remains low for the Group.
Trade and other receivables increased by £4.8 million compared to FY23. Overall
the balance remains relatively low and represents prepayments, rebate receivables,
rent deposits and other ad hoc receivables such as property contributions.
Trade and other payables decreased by £3.1 million. The balance remains in
line with FY23 as a result of focus on inventory management and ongoing
costcontrol.
Other includes taxation balances, defined benefit pension and capitalised
financecosts.
NET CASH/DEBT AND FINANCING
Net cash on 28 April 2024 was £0.7 million, a decrease of £15.7 million since
30 April 2023. The strong free cash flow
1
of £117.6 million being utilised for
£78.0 million of expansionary capex
1
, £44.2 million relating to the Ernest Jones
acquisition and £7.2 million for the purchase of own shares to satisfy future
management incentives.
Net debt post-IFRS 16 was £458.0 million. The value comprises the pre-IFRS 16
net cash of £0.7 million and the £460.4 million lease liability, offset by capitalised
transaction costs of £1.7 million. The balance increased by £64.0 million (from
£394.0 million) in the period, principally driven by additions to the lease portfolio.
The Group’s maximum amount available under its committed facility was
£225.0million at 28 April 2024.
Facility from 9 May 2023 Expiring
Amount
(million)
Multicurrency revolving loan facility – UK SONIA
+1.50% to +2.55%
May 2028 £225.0
During the year, on 9 May 2023, the Group signed a new five-year £225.0 million
multicurrency revolving loan facility with lenders. The new facility uses UK SONIA
+1.50% to +2.55%. The existing facilities were repaid and extinguished on this date.
£115.0 million of these facilities were drawn down at 28 April 2024. Liquidity
headroom (defined as unrestricted cash plus undrawn available facilities) was
£209.3 million. Further detail with regards to covenant tests and liquidity headroom
can be found in borrowings note 18 within the Consolidated Financial Statements.
Post year-end, the Group drew down on a new loan facility to fund the
acquisition of Roberto Coin Inc. This $115.0 million loan facility has the same
interest rate and covenants as our existing RCF facility and has a term of one
year, with two six-month extension periods taking the maximum term length to
two years. In taking out this additional facility we have maintained our financial
flexibility to pursue further acquisitions in the future.
CASH FLOW
Cash flow (£million)
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023
Adjusted EBITDA
1
178.9 201.4
Share-based payments 2.1 3.5
Working capital (20.3) (22.5)
Pension contributions (0.7) (0.7)
Tax (33.5) (26.6)
Cash generated from operating activities 126.5 155.1
Maintenance capex (2.7) (4.6)
Net interest (6.2) (4.7)
Free cash flow
1
117.6 145.8
Free cash flow conversion
1
66% 72%
Expansionary capex (78.0) (67. 5)
Acquisitions (44.2) (24.9)
Purchase of own shares (7. 2) (21.3)
Refinancing costs (2.2) –
Exceptional items – expenses on business
acquisitions
(2.5) (0.9)
Cash flow (16.5) 31.2
Net repayment of borrowings (5.0) –
Net (decrease)/increase in cash
and cash equivalents
(21.5) 31.2
Free cash flow decreased by £28.2 million to £117.6 million in the year to 28
April 2024 and free cash flow conversion was 66% compared to 72% in the
prior year.
6 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
FINANCIAL REVIEW
continued
Cash flow from trading reduced (Adjusted EBITDA decreased by £22.5 million),
in addition to a £20.3 million adverse working capital movement, driven by the
inventory increase in the year as noted above. Tax cash payments increased to
£33.5 million in line with the tax charge in the year.
Expansionary cash capex of £78.0 million was higher than the prior year due to
an increase in new showroom openings and refurbishments. FY24 had a higher
proportion of capex spend in the first half of the year, as we looked to complete
significant projects ahead of the holiday season. Showrooms will therefore
benefit from a full year of opening in FY25.
£7.2 million of shares were purchased in the period to satisfy management
incentive schemes, which will vest in the future periods.
Exceptional cash items of £2.5 million principally relates to professional and legal
expenses in relation to actual and future acquisitions, including the acquisition of
Roberto Coin Inc. which took place post year end.
RETURN ON CAPITAL EMPLOYED (ROCE)
1
52 weeks ended
28 April 2024
52 weeks ended
30 April 2023
ROCE 19.5% 27.9%
FY24 ROCE is 19.5%, a decrease of 840bps in comparison to the prior year.
Thisis as a consequence of Adjusted EBIT decreasing by -18% compared to the
prior period.
ROBERTO COIN INC. ACQUISITION
On 8 May 2024, the Group signed and completed the acquisition of the entire
share capital of Roberto Coin Inc., the exclusive distributor of Roberto Coin in
the US, Canada, Central America and the Caribbean (the Acquisition).
The Acquisition completed for a total cash consideration of $130.0 million (of
which $10.0 million is deferred for one year and contingent on the future
profitability of the acquired business), subject to working capital adjustments.
Roberto Coin Inc. achieved annual revenue of $137.2 million and profit before
taxation of $29.8 million for the audited financial year ended 31 December 2023.
Gross assets at that date were $102.4 million.
The Acquisition was financed via a new $115.0 million term loan facility. At the
date of the Acquisition, the transaction increased the Group’s leverage to c.0.8x
Net Debt/Adjusted EBITDA at the year end date and c0.6x on a pro-forma basis.
The Acquisition will be margin enhancing and EPS accretive from the date
ofacquisition.
CAPITAL ALLOCATION
The Group has a clear framework of capital allocation and is focused on
optimising capital deployment for the benefit of all our stakeholders, with a focus
on long-term sustainable growth in the business. It is also important for the
Group to maintain financial and operational flexibility to be able to react tactically
to opportunities, such as strategic acquisitions, at speed. Our capital allocation
framework is as follows:
1. Showroom investments – given the attractive returns from showroom
investments, this is our key focus area to allocate capital to
2. Strategic acquisitions – this is a key pillar of our growth strategy, as outlined in
our Long Range Plan to FY28. Acquisitions must deliver return on investment
in line with our disciplined financial criteria, within an appropriate timeframe
3. Returns to shareholders – in the event of surplus capital/cash flow above
and beyond the requirements of the business for investment into showrooms
or strategic acquisitions, we would consider returns to shareholders either
through ordinary dividends or share buy backs, with the appropriate
mechanism to be decided at the appropriate time by the Board
SHOWROOM PORTFOLIO
As at the 28 April 2024, the Group had 223 showrooms. The movement in showroom numbers is included below:
UK
multi-brand
showrooms
UK
mono-brand
boutiques
Europe
mono-brand
boutiques
Total UK and
Europe
US
multi-brand
showrooms
US
mono-brand
boutiques Total US Total Group
30 April 2023 89 51
6 146 24
23 47 193
Openings 1 8 3 12 2 8 10 22
Acquisitions 14 1 – 15 – – – 15
Closures (5) (1) – (6) (1) – (1) (7)
28 April 2024 99 59 9 167 25 31 56 223
61
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The following table sets out where stakeholders of Watches of Switzerland Group PLC can find relevant
non-financial and sustainability information within this Annual Report and Accounts further to the Financial Reporting
Directive requirements contained in Sections 414CA and 414CB of the Companies Act 2006.
This Non-Financial and Sustainability Information Statement highlights information necessary for an understanding
of the Company’s development, performance, position and impact of its activity, information relating to environmental, colleagues, social
matters, respect for human rights, anti-bribery, corruption and fraud matters. The information listed below is incorporated by cross
references to other areas of the Annual Report and Accounts and the Company website where further information can be found.
ENVIRONMENT
Key matters Relevant policies and procedures which govern our approach Pages
Climate related financial disclosures Task Force on climate related Financial Disclosures Report
Analysis of resilience
Risk Management
Companies Act 2006
106 to 122
114 to 117
130 to 132
106 to 122
Taking action on climate change Our ESG Partner Standards set out our net-zero GHG emissions goal and the actions we need to
take within our value chain to achieve them.
94 and 95
Reducing our impact on
the environment*
Our Environment Policy, Vendor Code of Conduct and ESG Partner Standards promote the
efficient use of resources and energy in our supply chain and ensures a Group-wide commitment to
continual improvement and compliance with environmental legislations and regulations.
92 to 100
Providing sustainable solutions* Our Modern Slavery Statement includes key performance indicators. 125
COLLEAGUES
Key matters Relevant policies and procedures Pages
Encouraging colleagues to raise matters
of concern*
Where colleagues have concerns about suspected wrongdoing, misconduct or malpractice
connected to the Group they can report such concerns on a confidential and anonymous basis, and
without fear of retaliation, using our Whistleblowing Policy and procedures.
129
Investing in our people and a diverse
workforce
Our Diversity & Inclusion Policy ensures that colleagues are treated fairly and equally and that
diversity and inclusion is embraced.
74 and 75
Providing our colleagues with a safe
working environment
We are committed to maintaining safety standards that comply with legislation and enable
colleagues to be confident that their workplace is safe.
83
SOCIAL MATTERS
Key matters Relevant policies and procedures Pages
Developing responsible supply chains* Our Vendor Code of Conduct and ESG Partner Standards include measures taken to ensure that
products are sourced responsibly and that adequate standards are maintained throughout our
supply chain.
124
Promoting a healthy corporate culture Our values underline the way we conduct business and recognise we will only continue to be
successful if we grow profitability and conduct our business in a way which impacts all of our
stakeholders in a positive way.
66
Business standards of behaviour* Our Code of Ethics ensures that all business is conducted in a fair and ethical manner with the
highest levels of integrity and professional standards globally.
129
ANTI-BRIBERY, CORRUPTION AND FRAUD
Key matters Relevant policies and procedures Pages
Prevention of bribery, corruption
andfraud*
Our Anti-Bribery, Corruption & Fraud Policy outlines the behaviours and principles required of
colleagues to prevent any form of bribery, corruption or fraud.
129
Promoting ethical supply chains* Our Vendor Code of Conduct defines the principles and standards we expect suppliers to
understand and adhere to.
124
RESPECT FOR HUMAN RIGHTS
Key matters Relevant policies and procedures Pages
Approach to human rights and modern
slavery*
Approved annually, by the Board, our Modern Slavery Statement sets out the steps that we take to
ensure, as far as possible, that slavery and trafficking do not exist in our supply chain or in any part
of our business.
Human Rights Policy.
125
A description of our business model can be found on pages 26 and 27.
Where principal risks have been identified in relation to any of the matters listed above, these can be found on pages 134 to 139.
Our non-financial key performance indicators can be found on pages 53 and 54.
* Find out more about our policies in the Governance section on our corporate website thewosgroupplc.com
62
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
HOW WE ENGAGE WITH
OUR STAKEHOLDERS
SECTION 172(1) STATEMENT
The Board believes that in order to maximise value and deliver
long-term success, it is critical that we understand who our key
stakeholders are, This will enable us to build relationships,
engage in proactive and constructive dialogue, and to ensure
we deliver on what is important to them. To that end,
engagement with all of our stakeholders plays a vital role in
delivering our Group strategy.
Section 172(1) of the Companies Act 2006 requires that the
directors of a company must act in the way they consider, in good
faith, would be most likely to promote the success of the company
for the benefit of its members as a whole, having regard to each of
its stakeholders and taking into account the factors listed in Section
172(1) (a) to (f). The Board therefore considers the views of each
of its stakeholders as part of the decision-making process. Details
of governance in action can be found on page 153.
STAKEHOLDER MAPPING
Our key stakeholders are all those parties with an interest in the outcome of our Group’s actions. To
deliver our strategy in line with our Purpose, we need to understand the priorities of our stakeholders
and how to engage with each of them effectively. The Board considers the parties listed here to be
those which are identified as most likely to be affected by its principal decisions.
BRAND PARTNERS
& OTHER SUPPLIERS
COLLEAGUES
COMMUNITIES CLIENTS
INVESTORS
63
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
WHY WE ENGAGE
At the Watches of Switzerland Group, we are
committed to giving our colleagues every reason to
join, grow and stay with our Group.
Our colleagues care about:
– Job security, future prospects with learning and
development opportunities
– Regular and relevant communications and engagement
with management
– Fair compensation and benefits
– Being part of a diverse, equitable and inclusive workplace
– Taking a position on the environment, sustainability
and giving back to the community
– Meritocracy and equal access to opportunity,
support and development
WHY WE ENGAGE
Our clients are central to all we do, building relationships
and understanding clients is key.
We engage with our clients to:
– Provide our expert knowledge and advice
– Ensure we always give them a memorable experience
– Provide an exceptional client experience through
Xenia, our Client Experience Programme
– Ensure we provide a major point of experience
which positively differs from our peers
WHY WE ENGAGE
Relationships are built on mutual trust and respect, we
recognise the responsibility we undertake to represent
the brands and contribute to their long-term value
appreciation. We maintain and continue to develop
long-standing partnerships through:
– Working in partnership with our brands on co-op
marketing activities, incentives and training opportunities
– Offering a comprehensive range of brand partner
products to our clients
– Long-term collaboration on all areas of our business
– Ensuring and developing a socially and environmentally
responsible supply chain
– Ongoing meetings and dialogues including clienteling
events
HOW WE ENGAGE
– Regular development reviews, performance discussions
and face-to-face training
– Annual Colleague Engagement Surveys, understanding
what matters and development of action plans
– Feedback from the Diversity Council and Employee
Resource Groups (ERGs)
– Colleague representation at local and global Listening
Forum meetings
– Having an innovative, accessible and collaborative
two-way communication platform
– Presentations by senior management, providing
business updates with the opportunity for questions
and discussions
– Ensuring all colleagues have sight of vacancies and
opportunities within the Group
– Encouraging participation in charitable activities
through fundraising and volunteering
HOW WE ENGAGE
– Through Xenia, both in retail and the Support Centre
– 1:1 clienteling between showroom colleagues and
clients to engage on product launches and services
– Supporting clients with their buying journeys, both
in showrooms and online with the Luxury Watch
and Jewellery Virtual Boutique
– Engaging through multiple social media platforms
– Continuing with strong client event programmes
throughout the UK and US
– Engaging if something goes wrong through our
Client Recovery Team
HOW WE ENGAGE
– Regular top to top meetings locally and in brand
partner head offices in Switzerland
– Regional and local brand partner and supplier events
– Ongoing dialogue, including the launch of exclusive
ranges
– Actively identifying distribution opportunities
– Collaborating to provide our colleagues with
extensive training
– Range planning through sharing market trend data,
defining product assortment and providing long-
term planning data at micro and macro level
– Attendance of industry fairs, including Watches
ofWonder
MONITORING THE IMPACT OF OUR
ENGAGEMENT
– The Board receives feedback from the Designated
Non-Executive Director for Workforce Engagement
and senior management after each Listening Forums
– Results of the annual Colleague Engagement Survey
and proposed action plans are presented to the Board
– The Board reviews the gender pay gap and discusses
the year-on-year results
– Achievement of the certification as a Real Living
Wage employer in the UK
– Meeting the prescribed FTSE 350 Women Leaders
Review gender balance, and achieving 10th place in
the UK FTSE 250 Women Leaders Index (up from
15th last year)
– Meeting the Board’s Parker Review ethnicity targets early
MONITORING THE IMPACT OF OUR
ENGAGEMENT
The Board receives updates on client experience
through a number of performance indicators including:
– UK Voice of the Client shows 91% of surveyed
clients, rate interactions with retail colleagues as 9
or 10 out of 10
– Client experience success is measured through
emotional drivers with 92% of clients feeling valued
– UK Net Promoter Score (NPS) is world class at
over 82%
– UK and US Trustpilot, for online clients, scores an
average 4.7, out of 5
– UK and US Google reviews score an average 4.5
and 4.9 out of 5, respectively
MONITORING THE IMPACT OF OUR
ENGAGEMENT
– Efficient and timely flow of product into the
showrooms, including limited editions, exclusives
and first to market
– Each Board meeting includes a report on how the
business is expanding by assessing and improving
market share, and developing and expanding our
luxury jewellery brands
– Continued uptake to our Supply Chain Management
system, EcoVadis
– 100% of our key watches and jewellery suppliers
have accepted the terms of the Vendor Code of
Conduct or have an equivalent standard
– Ensuring our ESG Partner Standards are distributed
to all new suppliers
– Statistics regarding compliance training are
presented to the Board after each Audit & Risk
Committee meeting
COLLEAGUES
CLIENTS
BRAND PARTNERS
& OTHER SUPPLIERS
6 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
SECTION 172(1) STATEMENT
continued
WHY WE ENGAGE
Continuous engagement with investors helps us to
understand their views and priorities, it builds trust and
helps secure ongoing support. In turn, investors rely on
us to protect and manage their investments in a
responsible and sustainable way that generates value
over the long-term. We engage with our investors to:
– Achieve sustainable growth and superior returns in
the share price
– Ensure current and potential investors understand
our business, Long Range Plan to FY28 and strategic
objectives
– Promote the strong and robust corporate
governance framework that exists
WHY WE ENGAGE
One of our core values is that we care for our
communities by engaging and actively supporting those
in need. Both The Watches of Switzerland Group
Foundation for the UK and the US and the Company
support a range of causes including partnerships with
The Prince’s Trust, Crisis, Habitat for Humanity and the
Fuel Bank Foundation as well as a network of food banks
in large city centres where colleagues and clients live.
HOW WE ENGAGE
– Ongoing dialogue between investors and the CEO
and CFO including investor roadshows
– Meetings and calls between major shareholders and
the Chair
– Hosting investor days with guided showroom tours
in the UK and in the US along with other in-person
events
– The Board attends the Annual General Meeting
in-person
– Stock Exchange announcements, press releases, results
briefings and participation in investor conferences
– Publication of presentations and reports on the
corporate website
HOW WE ENGAGE
– We support The Watches of Switzerland Group
Foundation to drive positive change within the
communities we operate
– Donated £1.5 million to the Foundation (£7.5million
donated since formation)
– Donations to other charities in particular, headline
sponsor for the Prince’s Trust Palace to Palace Bike
Ride and sponsor of the annual Prince’s Trust
Changemaker award
– Developing volunteering programmes in the UK
and the US
– Being signatories to British Retail Consortium’s,
‘Better Jobs’ Diversity & Inclusion Charter
– Being members of Business in the Community, the
responsible business network established by King
Charles III when he was Prince of Wales, and the
Race at Work Charter
– Successful participation in charitable activities
through fundraising and volunteering, including the
CEO completing The Palace to Palace Bike Ride
MONITORING THE IMPACT OF OUR
ENGAGEMENT
– The Chair reports to the Board following direct
dialogue with investors
– Analysts and broker feedback provided to the
Board after each public announcement detailing
market reaction and investor views
– Corporate brokers attended, in-person, two
scheduled Board meetings
– The CEO, CFO and the Group Finance and Investor
Director provide regular updates to theBoard
– The Group Finance and Investor Relations Director
participated in over 250 investor meetings and events
MONITORING THE IMPACT OF OUR
ENGAGEMENT
Through regular feedback particularly focusing on:
– Updates from the ESG Committee
– Updates from the UK and US Foundation are
provided to the Board at each meeting and a
separate presentation is given annually
– Direct feedback from charities
– Feedback from the local and global Listening Forums
– An increase of 23% in colleague volunteering hours
compared to FY23
– Continued financial support from the Group to the
UK and US Foundation
INVESTORS
“Engagement with all of
our stakeholders plays a
vital role in delivering our
Group strategy. The Board
considers all stakeholders
as part of our decision-
making process.”
IAN CARTER
CHAIR OF THE BOARD
COMMUNITIES
6 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OUR PURPOSE AND VALUES OUR ESG STRATEGY
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
OUR ESG STRATEGY
With our highly engaged colleagues, brand partners, scale and
expertise, we are uniquely positioned to achieve this.
Our ESG strategy is evolving to focus on key material issues in line
with best practice and global reporting frameworks, with input from
key stakeholder groups.
This strategy is underpinned by clear priorities and ambitious targets
to safeguard against environmental, social and governance risk, while
leveraging opportunities to secure a more sustainable future.
Guided by our Purpose, our strategy is to build
a more sustainable, valuable business
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A
F
E
G
U
A
R
D
O
U
R
R
E
P
U
T
A
T
I
O
N
OUR VALUES
OUR PURPOSE
WE EARN TRUST
& CONFIDENCE
By being true to
ourselves and honest
and transparent with our
colleagues, our clients
and our brand partners
WE TREAT EVERYONE
WITH RESPECT
By working together to
cultivate a secure and
supportive workplace,
with equal opportunities
and respect
WE DO THE RIGHT
THING, ALWAYS
By making the right
decisions for the benefit
of our colleagues,
stakeholders and
wider society
Our Purpose is an inextricable part of how we do
business. Environmental and social factors are
considered in our decision-making processes,
atevery level of our business.
Our values shape our culture and behaviour, driving
performance and purposeful action. They are the
cornerstone of our Code of Ethics and truly represent
whowe are.
WE CARE FOR OUR
COMMUNITIES
By actively engaging in
ourcommunity and
supporting those
inneed
WE PROTECT
OUR PLANET
By working with our
industry and other
stakeholders to
minimise our impact on
the environment
WE ADVOCATE FOR
OUR INDUSTRY
By proactively
promoting the interests
and responsibilities of
the luxury watch and
jewellery sectors in
ourmarkets
To WOW our clients, while caring for our
colleagues, our communities and our planet
6 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DELIVERING VALUEOUR ESG STRATEGY
Our foundational pillars provide a strategic framework
and guiding principles to help streamline our
decision-making and ensure everyone across our Group
works towards common goals
We WOW clients with the finest selection of watches
and jewellery, together with world class service.
We provide colleagues with rewarding careers, support a
thriving economy, and care for our communities through
rigorous ESG standards and via The Watches of
Switzerland Group Foundation.
We track our progress holistically, across non-financial
and financial performance.
Progress towards our ESG goals are considered
aspart of our colleague bonus scheme, reinforcing
our commitment to a more sustainable future
(referto page 177).
In addition, our existing loan facility is linked to the
achievement of our near-term science-based emission
reduction targets and circularity goals.
PEOPLE
GOALS
– Give colleagues every reason to join, growand
stay with our Group through attracting and
retaining talent, building an organisation fit for
the future and leveraging our unique culture
– Support our local communities
SUPPORTING UN SDGS
1
PLANET
GOALS
– Achieve net-zero GHG emissions by 2050
– Preserve natural resources
SUPPORTING UN SDGS
PRODUCT
GOALS
– Improve our traceability and sourcing standards
and highlight the sustainable attributes of our
watches and jewellery
– Support circularity in watches and jewellery
through repairs, servicing and our pre-owned
business
SUPPORTING UN SDGS
BRAND PARTNERS
& OTHER SUPPLIERS
COLLEAGUES
CLIENTS
COMMUNITIES
INVESTORS
As of June 2024, the Group holds ISS Prime Rating and the top QualityScore of ‘1’ for
Environment and Social. As of April 2024, we also hold the top MSCI ESG Rating of AAA.
The MSCI index is widely recognised as the leader for global equity benchmarks. The use by
Watches of Switzerland Group PLC of any MSCI ESG Research LLC or its affiliates (‘MSCI’) data,
and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a
sponsorship, endorsement, recommendation, or promotion of WOSG by MSCI. MSCI services
and data are the property of MSCI or its information providers, and are provided ‘as-is’ and
without warranty. MSCInames and logos are trademarks or service marks of MSCI.
OUR ESG PILLARS DELIVERING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS
DRIVING SUCCESS
1 UN Sustainable Development Goals
67
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
KEY TARGETS AND
HIGHLIGHTS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
6 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PEOPLE
PLANET
PRODUCT
At the Watches of Switzerland Group, we are
committed to giving our colleagues every
reason to join, grow and stay with our Group.
FY24 has been a year of investment and
consolidation as we delivered the first full year
of our new People Strategy. The focus has
been on talent management, building a stronger
organisation with the right skills for the future.
Despite the macroeconomic climate, we
remain committed to our Purpose and Values,
which underpin our strong culture.
We are determined to operate to the highest
levels of environmental stewardship, while
safeguarding against climate related risk and
supporting a more circular economy, through our
after-sales and servicing and pre-owned businesses.
We are taking action to achieve net-zero
GHG emissions by 2050, in line with what the
latest climate science says is necessary to
meet the goals of the Paris Agreement and
pursue efforts to limit warming to .5°C.
We are committed to making sure our supply
chain operates responsibly and that everyone we
do business with, respects and protects the lives
of workers, their communities, and the planet.
We are helping clients to make more
sustainable choices, by promoting the longevity
of well-made watches and jewellery, highlighting
innovation and advancement in circular design,
and growing our range of products with
positive environmental and social attributes.
KEY TARGETS & COMMITMENTS KEY TARGETS & COMMITMENTS KEY TARGETS & COMMITMENTS
– Participate in annual Colleague engagement
survey and deliver progress year-on-year
– Measure diversity and inclusion and deliver
progress year-on-year
– External accreditation by Great Place
to Work by 2026
– Reduce Scope and 2 GHG emissions
by 50% and Scope 3 emissions by 42%
by 2030 from a FY20 baseline
– Improve or maintain our CDP Climate
Change score year-on-year
– Year-on-year increase in the number
of watches repaired, serviced or resold,
measured as a percentage of new
watchsales
– Improve our traceability and sourcing
standards and highlight the sustainable
attributes of our watches and jewellery
HIGHLIGHTS FOR FY24 HIGHLIGHTS FOR FY24 HIGHLIGHTS FOR FY24
– Further closure of UK Gender Pay Gap by
% to 20%
– Group inclusion score of 77%
– Real Living Wage accredited in the UK and
all US colleagues paid above state minimum
– Ranked #0 in the FTSE 250 Women
Leaders Review
– Donated £.5 million in FY24 (£7.5 million in
total) to The Watches of Switzerland Group
Foundation to support local communities
– 23% increase in colleague volunteering
hours to 82
– As at June 2024 rated ‘’ by ISS Social
Quality Score
– Reduced our Group GHG emissions by
3.% year-on-year
– Improved our CDP Climate Change score
year-on-year from ‘C’ to ‘B’
– Launched an internal incentive to reward
colleagues for positive environmental
behaviours
– As at June 2024 rated ‘’ by ISS
Environmental Quality Score
– Expanded our Group repairs and servicing
capacity by almost 0,000 sq. ft to support
the circularity of watches and jewellery
– Increased the number of watches repaired,
serviced or resold year-on-year as a
percentage of the sale of new watches
by2%
– Scored a Supplier Engagement Rating of ‘A-’
from CDP
– As at June 2024 rated ‘’ by ISS Quality Score
%
COLLEAGUE ENGAGEMENT SCORE WITH AN 85%
RESPONSE RATE
%
UK PROPERTIES UNDER OUR CONTROL
POWERED BY RENEWABLE ENERGY
,
ADDITONAL REPAIRS OUR NEW UK SERVICE
CENTRE CAN ACCOMMODATE OVER NEXT
THREE YEARS
Read more from page 74
Read more from page 93
Read more from page 124
69
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
MATERIALITY ASSESSMENT
ESG GOVERNANCE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
APPROACH
Guided by our purpose and values to ‘do the right thing, always’, we operate a
responsible and ethical business by aspiring to best practice and understanding
stakeholder expectations, then making sure this is reflected in our business decisions.
The Board is committed to delivering continuous improvements across our
environmental and social activities through collaboration, innovation and directly
or indirectly investing in initiatives that benefit our colleagues, clients and local
communities, while adding value for our brand partners and other suppliers,
andinvestors.
Our ESG risk register ensures a systematic approach to ESG risk management,
which allows us to formally monitor our risk profile and manage change at the
appropriate levels, while mitigating or removing risks to our business operations
before they materialise. Our risk management framework also allows us to
identify and act on opportunities arising from a changing climate. More
information on how we are identifying and managing climate related risks and
opportunities, can be found in our Task Force on Climate Related Financial
Disclosures (TCFD) Statement on page 106.
MATERIALITY ASSESSMENT
Early in 2024, we carried out a materiality assessment to refine our ESG
reporting framework and further engage our stakeholder groups.
During this assessment, we engaged with internal and external stakeholders to
help us understand what issues are important to them and prioritise current and
emerging issues impacting on our business, as well as understanding the risks and
opportunities they present.
The results support our progress towards a more focused and performance-
driven ESG strategy, structured around shared and material priorities.
Our process
. Following approval by the Board of the approach and stakeholder selection, a
‘long list’ of 80 ESG issues was compiled using global reporting standards,
investor rating agency analysis and peer benchmarking
2. The Group’s ESG Steering Group selected 20 key issues that were felt most
appropriate to the Group and its values
3. Stakeholders were invited to rate which of these 20 ESG issues were most
appropriate to them
4. The results of the assessment were mapped onto a matrix
Issues identified as ‘most relevant’ were then subject to a gap analysis to
determine the levels of alignment with the Group’s core business operations and
ESG strategy. These issues were also mapped against the Group’s ESG risk
register to ensure consistency of risk ratings with priority.
During FY25, the ESG Steering Group will ensure that, where any gaps exist
between stakeholder priority and the Group’s view, there are either defined
actions to close the gap, or a robust rationale for maintaining a difference in priority.
Our approach to determining the materiality will be reviewed on an annual basis.
Key:
1 Packaging
2 Biodiversity & nature
3 Social impact
4 Transparency & reporting
5 Traceability of raw materials
6 Anti-bribery, corruption & fraud
7 Anti-money laundering
8 Health, safety and wellbeing
9 Achieving GHG reduction targets
10 Climate action
11 Energy management
12 Sustainable procurement
13 Diversity & inclusion
14 Whistleblowing & grievance procedures
15 Colleague engagement
16 Training & education
17 Supply chain engagement
18 Brand & reputation
19 Data protection & cyber security
20 Circularity via repairs & pre-owned
“Fundamentally, our approach to ESG
is to do the right thing, always.”
ANDERS ROMBERG
CHIEF FINANCIAL OFFICER
Importance to the Group
Importance to stakeholders
70
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
COLLABORATION WITH PARTNERS
The Group’s business strategy is aligned with the United Nations
Sustainable Development Goals (UNSDGs) and we support the principles
of the UN Global Compact, which aims to prioritise and mobilise efforts
to drive business action to achieve these goals by 2030.
We are active members of the British Retail Consortium and the UK
Government’s All-Party Corporate Responsibility Group, as well as
Business in the Community, which is the largest and most influential
responsible business network dedicated to building a fairer, greener world.
We also partner with international social enterprise, Slave-Free Alliance,
to support the delivery of our human rights and modern slavery roadmap.
In FY24, we announced a three-year partnership with the Association of
Creative Independent Watchmakers, to help provide talented watchmakers
with a platform, guidance and support, as they hone their skills and shape
their careers.
Through our business and The Watches of Switzerland Group Foundation,
we continue to enjoy long-standing partnerships with charities including
local food banks in the UK and Habitat for Humanity in the US, as well as
The Prince’s Trust in both the UK and US. More information on how we
are caring for our communities through the Foundation can be found on
pages 86 to 91.
We strongly encourage all supplier partners to align with relevant, well-
recognised sustainability standards and certifications, as well as adhere to
external initiatives or sets of principals. More information on our supply
chain management and due diligence can be found on pages 125 to 126.
ESG GOVERNANCE
The Group is committed to high standards of environmental and social
governance and our Board governance structure can be found on page 132.
The Board has overall responsibility for sustainability and is supported by the
dedicated ESG Committee, chaired by Baroness (Rosa) Monckton MBE, Non-
Executive Director.
Our ESG Committee meets a minimum of three times a year, plus, where
appropriate, additional meetings are held dedicated to training and awareness.
The Committee plays an active role in the development and delivery of the
Group’s ESG Strategy by considering best practice, ratifying key decisions, and
providing accountability against KPIs in relation to our three ESG Pillars of People,
Planet and Product.
The ESG Committee is supported by an ESG Steering Group, which is comprised
of members of senior management, each with formal operational responsibility
for the management of environmental, social and governance issues. The ESG
Steering Group is chaired by our CFO, Anders Romberg, and driven by our
experienced Head of Sustainability and ESG, Kesah Trowell.
The ESG Steering Group aims to meet once a month and exists primarily to help
mitigate risk, and to oversee the development of a progressive ESG Strategy and
ensure its successful delivery across the Group.
PEOPLE
WORKING
GROUP
Led by Executive
Director, HR,
Philippa Jackson
PLANET
WORKING
GROUP
Led by CFO,
Anders Romberg
PRODUCT
WORKING
GROUP
Led by Executive
Director, Global
Buying and
Merchandising,
Eric Macaire
GOVERNANCE
WORKING
GROUP
Led by Company
Secretary &
General Counsel,
Laura Battley
BOARD
TRADING BOARD
Attended by
senior management
ESG COMMITTEE
Chaired by Non-Executive
Director, Baroness (Rosa)
Monckton MBE
ESG STEERING GROUP
Chaired by CFO
Anders Romberg
KEY COLLEAGUE LEADS & EXPERTS
Co-ordinated by Kesah Trowell, Head of Sustainability and ESG
REMUNERATION
COMMITTEE
AUDIT & RISK
COMMITTEE
LEVERAGING AI TECHNOLOGY TO IMPROVE OUR DISCLOSURE
In November 2023, the Group was selected to participate in a digital
transformation project, to explore how machine-learning technology can be
used to enhance ESG reporting.
Led by generative artificial intelligence (AI) specialists, seeva.ai, and supported by
Sheffield University, this 13-month project, which began in January 2024, aims to
develop and deploy AI Agents and Co-pilots, to carry out real-time sustainability
assessments and improve the accuracy and transparency of our reporting. It is
funded by Innovate UK, the UK innovation agency, as part of their work to
understand how AI can support business in achieving sustainability goals.
If successful, this ground-breaking project will allow us to efficiently gather and
analyse data in line with key ESG frameworks and global reporting standards,
identify gaps in our disclosure, benchmark against peers, enhance the content
and accuracy of our FY25 reporting, and ultimately sharpen the focus of our
ESG Strategy.
See page 95 for more information on how this project is helping us to improve
our supply chain data and reporting.
71
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OUR PEOPLE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
“The showroom is a joy to go to daily,
with a long-established team with
a wealth of experiences. Every day
we strive for excellence, and this
Iamproud of. ”
ANDREW WILSON
DEPUTY MANAGER, MAPPIN & WEBB
MANCHESTER
7 2
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
We are committed to our goal of giving our colleagues ‘every reason to join, grow and stay’ with our Group
and each of our supporting strategies is underpinned with clear tactics and measures set over a three-year
horizon between FY24 and FY26.
As a purpose-led business, our values are at the centre of everything we do.
ATTR ACT AND
RETAIN TALENT
BUILD AN ORGANISATION
FIT FOR THE FUTURE
LEVERAGE OUR
UNIQUE CULTURE
GOAL
To give colleagues every reason to join,
grow and stay with our Group.
STRATEGIES
At the Watches of Switzerland Group, we have created an inclusive culture which gives our colleagues every
reason to join and develop long-term careers within our Group. FY24 has been a year of investment and
consolidation as we have focused on high performance, productivity and efficiency. Although the external
context has been challenging, we have continued to invest in our people who remain key to our success.
OUR PEOPLE STRATEGY
OUR VALUES
OUR PURPOSE
WE EARN TRUST
& CONFIDENCE
WE TREAT EVERYONE
WITH RESPECT
WE DO THE RIGHT
THING, ALWAYS
WE CARE FOR OUR
COMMUNITIES
WE PROTECT
OUR PLANET
WE ADVOCATE FOR
OUR INDUSTRY
To WOW our clients while caring for our
colleagues, our communities and our planet.
INTRODUCTION
73
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
FY24 PERFORMANCE HIGHLIGHTS
– Over 2,900 colleagues employed globally
– Total Group attrition decreased to 22%
– High Performance Leadership development
programme launched in the UK
– US Watchmaker Apprenticeship Programme
and 17% increase in UK Watchmakers
– Gender pay gap closed by 1% to 20%
– 9% of Group colleagues promoted in last
12months
– 49% of Group promotions are female and
30% of those promoted identified as coming
from minority ethnic backgrounds
– 54% of new hires are female (UK) and 41%
female (US)
– 98% of new starters are 100% satisfied with
UK hiring experience
Attracting, retaining and developing talent is a strategic priority and this year, we have continued to focus
on building a meritocracy and strengthening our teams.
FY25 AREAS OF FOCUS
– Onboarding colleagues post acquisition
– Further enhance Xenia colleague experience
by boosting line manager capability
– Double watchmaker capability to support
repairs and pre-owned
– New UK Apprenticeship Programme
DIVERSITY AND INCLUSION
Respect is a core value in our Group. We continue to work together to cultivate
a secure and supportive workplace with equal opportunities and inclusion at the
centre. We actively promote diversity of thought and opinions, and we recruit,
develop and promote colleagues from different backgrounds.
“I am from a lower socio-economic background
and proud of where I come from. My advice to
young people is, do not make your background
your excuse. Turn your disadvantage into your
future advantage.”
BRIAN DUFFY
CEO
SUPPORTING UNITED NATIONS
SUSTAINABLE DEVELOPMENT GOALS
ATTRACT AND RETAIN TALENT
Progress against our strategy to date:
– Inclusion: 77% of our Group colleagues in our annual Colleague
Engagement Survey agree that they ‘work in an environment where everyone
can be included, respected and accepted for who they are’.
– Gender balance: Our percentage of females in our Executive Team
1
and
their direct reports is 51%, broadly consistent with FY23 and gives us gender
balance at the senior levels of the organisation. We define gender balance as
at least 40% male or female at leadership team level.
– Representation: We have achieved the target for ethnic diversity at Board
level as set out in the Parker Review.
In addition, following our commitment to focus further on succession planning
this year, we have seen the following results across our regions.
UK HIGHLIGHTS
– 27% of new hires class themselves as coming from an minority ethnic
background
– Increase of 4% females in the top talent quartiles meaning females make up
41% of our UK succession pipeline
– Participation on internal UK leadership programme: 69% participants were
female and 42% minority ethnic background, meaning we are levelling the
field to support our commitment to meritocracy
– Our New UK inclusion survey shows that we have a higher percentage of
female, minority ethnic, disability and LGBT+ colleagues when compared to
the 2021 UK census. In addition, 26% of those who completed the survey are
from lower income families (compared to the national average of 24%)
– Achieved 10th place in the UK FTSE 250 Women Leaders Review (up from
15th last year)
– Training and education: Leadership Teams have received diversity and
inclusion training; and new inclusion training is accessible to all on our new
Global Learning Hub
WE ARE BUILDING A MERITOCRACY
WHICH IS SUPPORTED BY
INCLUSION GENDER BALANCE REPRESENTATION
77% inclusivity score
inFY24
All leadership teams
are gender balanced
Teams represent the
national identity
and the race/ethnic
mixof the markets
in which they operate
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
74
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
STRATEGIC PILLARS TO DEVELOP OUR MERITOCRACY
CARE RESPECT HARNESS EQUIP
Leaders visibly
champion
diversity and
inclusion
Strengthen our
inclusive culture
The power of
our brands
and
communities
End-to-end
policy and
process
alignment
US HIGHLIGHTS
– Evolved our Global Diversity Council and have created Employee Resource
Groups in the US and the UK which represent cultural awareness, disability
and wellbeing, gender equality and LGBT+ colleagues.
– Drove monthly campaigns celebrating different facets of diversity, led by
ourcolleagues
– Quarterly meetings sharing best practices and ideas to share within teams
– The US Diversity Council met four times in FY24. In addition US
representatives attended one Global meeting
We were also pleased with our Institutional Shareholder Services (‘ISS’) ‘social’
rating in FY24, which improved from a 4 to a 1, the highest possible rating. This
measures human rights, health and labour processes and gives scores of 1
through to 10, with 1 being the highest.
UK FTE – RetailBoard Executive Team
1
Executive Team and
their direct reports
UK FTE – Total US FTE – Retail US FTE – Support US FTE – Total
UK FTE – Support
MALE
FEMALE
3 (38%)
5 (62%)
24 (51%)
23 (49%)
813 (53%)
711 (47%)
3 (43%)
4 (57%)
1,182 (54%)
1,005 (46%)
222 (47%)
250 (53%)
63 (65%)
33 (35%)
285 (50%)
283 (50%)
369 (56%)
294 (44%)
COLLEAGUE GENDER STATISTICS AS AT 28 APRIL 2024
1 Executive Team is defined on page 158 of the Corporate Governance Statement
75
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ATTRACTION AND RETENTION
HIGHLIGHTS
– All new US starters receive a personalised new hire process
– 80 US promotions and transfers demonstrating internal career progression
– US Watchmaker Apprenticeship Programme and 17% increase in
Watchmakers in the UK
– Improved Group communications and highlighted ‘Brilliant Careers’ stories
covering personal and professional achievements and published internally
andexternally on social media platforms
– We have embarked upon a retail transformation journey which elevates
leadership, creates clear career paths and drives enhanced collaboration
– We provide a strong colleague experience as ‘stay surveys’ reveal that the
three main reasons people stay with the Group are people, culture and
greatleadership
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
Our focus on talent attraction and retention remained a priority throughout
FY24 and we significantly reduced our attrition rates throughout the year. We
have over 2,900 colleagues and remain proud of our high calibre workforce
across the UK and US. Our workforce remains highly attractive to other
employers and therefore, we prioritise engaging our colleagues by training them
to the highest standards and giving them every reason to join, grow and stay with
our Group. Our key areas of focus remain:
– Highest quality product and brand training
– Excellence in recruitment for line managers
– Comprehensive onboarding programmes in all regions focused on building an
emotional connection and loyalty for the Group.
We have thorough recruitment processes and, where needed, use a preferred
supplier list to source talent which is reviewed annually. We have also invested
and developed our UK careers website (internally and externally) which better
reflects our colleague base to encourage a diverse pool of applicants and
showcase our wide range of career opportunities. The US will upgrade the US
careers website in FY25.
76
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
“We work in a competitive industry,
where clients can choose the same
products in different places. The biggest
difference and what makes us unique
is precisely us, our people. We are the
reason why our clients are wowed.”
JUAN PABLO PANDO
GRAND SEIKO BOUTIQUE DIRECTOR, NEW YORK
7 7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
BUILD AN ORGANISATION
FIT FOR THE FUTURE
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
We recognise that one of the key differentiators to our future success is our people.
Therefore we continue to focus on building the right skills and capabilities for the future
as well as rewarding and recognising our colleagues today.
FY24 PERFORMANCE HIGHLIGHTS
– Onboarding new hires post acquisition
– New Group Technology Director and US
Ecommerce Director
– 1,292 colleagues completed repairs training
– Continued focus on Xenia skills and training
– Accredited by the UK Real Living Wage
Foundation
– Launched new UK Retail structure with clearer
pay progression, incentives and career paths
FY25 AREAS OF FOCUS
– Enhanced branded jewellery training in
partnership with brand partners
– In-person Rolex repair training to enhance
client experience
– Continued focus on high performance training
– Introduction of a UK Apprentice Programme
SUPPORTING UNITED NATIONS
SUSTAINABLE DEVELOPMENT GOALS
GLOBALLY AND LOCAL CAPABILITY
Our Long Range Plan to FY28 sets out the skills and capabilities we need to build
for the future and we continue to attract high calibre talent despite market
pressures. This year, we have prioritised showrooms and Luxury Watch and
Jewellery Virtual Boutique skills, service and repair capability and ecommerce
and technology.
We have a history of successful acquisitions and we welcomed nearly 200 Ernest
Jones colleagues into our business this year and supported them through
consultation, onboarding and training programmes. We will extend the same
support to colleagues at Roberto Coin Inc.
HIGH PERFORMANCE CULTURE
We have signature processes in place to support performance at the highest
levels. Our annual development performance review process in the UK achieved
an 89% completion rate in retail in FY24. This process ensures objective setting
occurs and 82% of colleagues confirmed in our annual Colleague Engagement
Survey that they feel committed to the Company’s goals.
As part of our leadership development commitment, we have rolled out High
Performance Culture training to our Leadership Teams as well as a new six-
month Emerging Leaders Programme in the UK. This is supplemented by Group
self-led learning modules on our new global learning platform, providing access
to a range of personal development topics linked to high performance. This
approach will be followed by the US in FY25.
Finally, we have supported five colleagues on external talent programmes: three
in Diversity in Retail’s Future Ethnic Leaders and two on Women in Leadership.
Graduates from FY24 Emerging Leaders Programme
78
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
A COMPREHENSIVE
GROUP BENEFITS
PACKAGE
Paid time off including
holiday and sick pay
Discount scheme for luxury
products and brand incentives
Health benefits
Colleague sharesave
schemes
Extra holiday purchase
scheme and birthday
off (UK)
Free 24/7 confidential
Employee Assistance
Programme
Pension contribution
Commission, bonus
opportunity for all
Free wellbeing tools
and support
Recognition policies
REWARD AND RECOGNITION
The Watches of Switzerland Group is a business built on relationships. It is
important to us that our colleagues are engaged, healthy, happy and motivated
to make our aspirations a reality. In return, we provide high levels of support
and reward to our valued people. We have built a far-reaching and
competitive benefits package, which has been enhanced further. In
conjunction with feedback from colleagues, we have improved our offer in
the following ways:
– We continue to comply with the Real Living Wage recommendations
inthe UK
– New commission and bonus schemes in UK retail including top seller
incentives
– 79% of colleagues participate in the UK pension scheme
– 79% of colleagues participate in the US 401k pension scheme
– Colleagues are shareholders through voluntary participation in our
sharesave scheme
– A comprehensive Employee Assistance Programme is available in the UK
and US which provides free and confidential 24 hour services to
colleagues for work related and personal problems
– The Watches of Switzerland Group UK Support Fund remains available
tocolleagues to provide interest free loans for those facing difficulties
meeting their household expenditure. The cumulative total by the end
ofFY24 stands at 38 applications received and £43,000 approved
– Implemented a benefits concierge in the US to assist with benefit plan
enrolments and questions
– Improved health benefits in the US to include group accident, critical
illness, hospital indemnity, voluntary life insurance, identity protection
andpet insurance
45,334
RECOGNITIONS IN THE UK ON OUR
VIBE AND BRILLIANCE PLATFORMS
79
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
LEARNING & DEVELOPMENT (TECHNICAL)
Technical expertise is critical to our success and we apply relentless focus to brand,
product and functional skills. Specifically for UK retail, we have created the UK retail
organisation of the future, reducing layers and driving empowered showrooms with
clear pay, new commissions and clarified career progression opportunities.
BRAND AND PRODUCT
We continue to provide a robust product knowledge training offer through
in-person, virtual and digital learning opportunities. These are a blend of our
in-house e-learning modules and academy programmes and strong partnerships
with our watch and jewellery partners. To build upon our jewellery training
strategy, we carried out a skills gap analysis with our colleagues to form the
strategy for FY25 where we will see a focus on elevating the client experience
with jewellery-focused consultations and a robust product training programme.
XENIA
FY24 saw the Xenia programme shift to face-to-face with a dedicated training
delivery team established to ensure consistency across all showroom formats
and geographical locations. 1,264 colleagues in the UK retail teams have attended
the training and 40 in the US. To strengthen our offering we have created virtual
inductions where the Xenia Pillars are brought alive to our new colleagues, and
plan to embed this further in 2025.
NEW SHOWROOMS – ALL REGIONS
Prior to opening, each new showroom goes through a comprehensive induction
of a minimum of 56 hours of in-showroom and classroom based learning. Those
showrooms undergoing major refits are taken through our modular programme
to elevate the knowledge and experience of colleagues. New showroom
colleagues experience intense inductions in their first weeks including our Group
culture, operations, Xenia, compliance, brand and product training.
REPAIRS AND PRE-OWNED
In the UK, we launched a new blended training programme on our Repairs
system to enable our retail colleagues to provide a Xenia experience to our
clients. In addition, our in-person repairs workshop was attended by 177
colleagues and we supplemented this with e-learning which 1,292 colleagues
have completed. In relation to pre-owned, 1,165 colleagues have completed this
training which includes a Rolex education focus highlighting product knowledge,
key brand messages and considerations.
JEWELLERY
In the US, we have continued to develop Gemological Institute of America (GIA)
expertise and will deepen this further in FY25 with the Applied Jewellery
Professional Diploma which will be extended to Roberto Coin colleagues.
Further jewellery training includes the launch of a Branded Jewellery learning
section on our Learning Hub platform in partnership with our brand partners
and professional qualifications for our Luxury Watch and Jewellery Virtual
Boutique colleagues. In FY25, linked to our new UK Mappin and Webb Luxury
Jewellery Boutique, we are developing advanced training modules to support
this exciting development. In addition, advanced training is planned for our
Betteridge and Mayors US retail teams.
WATCHMAKER SKILLS
In both regions, we have comprehensive technical training for watchmakers. We
will develop this further in FY25 focusing on jewellery and watch repairs, pre-
owned processing, stock repairs, trade-in processing, polishing and other
supporting skills such as quality control and parts management.
LEAN SIX SIGMA CONTINUOUS IMPROVEMENT
We are building these skills with investment into training our colleagues. In
addition, we have prioritised key projects and continue to build continuous
improvement in our Group processes.
LEARNING AND DEVELOPMENT (MANAGEMENT AND LEADERSHIP)
Our focus on learning and development is key to our strength in the market. This
year, we boosted face-to-face training to cement strong relationships and
knowledge sharing as well as to maximise our new learning and education
facilities. Our brands value continuity of managers in our showrooms and
therefore to support our goal to reduce attrition in retail, we developed our
new UK Manager Residential induction which has received a satisfaction score of
100% in FY24. In the US, new managers also receive a bespoke induction
programme which covers brand, product, compliance and culture.
During and post induction, managers have access to toolkits and training which
provide continual learning opportunities through brand training days,
management training, funded courses and Xenia training.
This year, we invested in a new global learning system to manage all training
including brand training on one platform. This also provides personal
development courses for all colleagues, flexibility for tailored learning plans and
in-depth reporting. This has enabled us to access learning in different languages
and ensure cultural sensitivities are respected. Since the launch of the new
platform in February 2024, global engagement has remained high with 1,700
colleagues completing learning each month. Over the course of FY24, 35,000
hours of learning were completed globally. Colleagues can now access 34
self-development courses linked to our competency frameworks.
In line with our strategy, we launched new training to support the growth of our
pre-owned business with 96% of our retail colleagues completing the programme.
Management training continued with 1,764 hours of classroom training received
on goal setting, coaching, team building and 1:1 support. As we prepare for FY25,
we have invested in a new online learning module for all new managers joining
the business and we will continue to build on these strong foundations in
supporting a greater focus on future talent management.
UK HIGHLIGHTS
93%
OF MANAGERS RETAINED FOLLOWING
NEW INDUCTIONS
108
BRAND TRAINING EVENTS DELIVERED
363
COLLEAGUES ATTENDED XENIA
TRAINING
1,764
HOURS OF TRAINING DELIVERED TO
MANAGERS
US HIGHLIGHTS
2,600
HOURS OF MANAGEMENT AND
INDUCTION TRAINING FOR NEW
COLLEAGUES
136
HOURS OF XENIA TRAINING THROUGH
40 XENIA TRAINING EVENTS
90
COLLEAGUES ENROLLED IN THE GIA
PROGRAMME AND 59 RECEIVED THEIR
ADVANCED JEWELLERY PROFESSIONAL
CERTIFICATION
4,434
HOURS OF BRAND PARTNER TRAINING
8 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
“As a placement student, I have
been provided with amazing work
experience and developed many
new skills helping me to grow
professionally. I am surrounded by a
great team who have welcomed me
from day one in an amazing work
environment.”
JASNEET SANGHA
MERCHANDISER WATCHES UK
81
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
LEVERAGE OUR
UNIQUE CULTURE
We are proud of our culture at the Watches of Switzerland Group, which is underpinned
by our Purpose andValues. Following the UK Support Centre relocation last year, our
move to our new US Support Centre isacatalyst for enhancing our culture.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
COLLEAGUE COMMUNICATION AND ENGAGEMENT
In direct response to our annual Colleague Engagement Survey, we undertook a
review of all platforms used for communication and streamlined Support Centre
led messaging, reintroduced regular business updates and introduced a calendar
of activity to streamline communication to our showrooms. Our new UK Head
of Communications joined the business in April 2024, to help drive our
communications strategy.
We have invested in career progression and it will remain a significant focus for
FY25. The UK Retail Transformation Programme has realigned showrooms,
refreshed and simplified roles and responsibilities and made it much simpler for
colleagues to see their career pathway and be rewarded through pay progression
and commission. We have also introduced ‘Brilliant Careers’, celebrating internal
promotions and a careers toolkit.
We held a number of colleague focus groups during the year to understand how
to improve our learning and training offer and the following actions were taken:
– Improved induction training underpinned by a digital toolkit
– We have re-introduced face-to-face training for Xenia and manager residentials
as well as streamlining the e-learning offering with our new platform
– We invested in a suite of personal development e-learning modules and in
FY25 will launch a UK Apprenticeship Programme
82%
OF COLLEAGUES SAY THEY ARE PROUD
TO WORK FOR THE WATCHES OF
SWITZERLAND GROUP
FY24 PERFORMANCE HIGHLIGHTS
– Annual Colleague Engagement Survey
response rate of 85%
– Annual Colleague Engagement Survey score of
76%
– Annual Colleague Engagement Survey
Inclusion score of 77%
– Annual colleague Engagement Survey reveals
82% colleagues feel proud to work for us
FY25 AREAS OF FOCUS
– Integrating acquired colleagues into our
culture
– Continued focus on career progression
– Empowering managers to drive engagement
and performance
– Better balance and flexibility in retail
SUPPORTING UNITED NATIONS
SUSTAINABLE DEVELOPMENT GOALS
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PURPOSE, VALUES AND ENGAGEMENT
Colleague engagement is measured in our annual Colleague Engagement Survey.
This year, our survey took place in January 2024 and whilst the overall results are
slightly lower, we were pleased with progress in some areas and that they remain
strong in a challenging performance year: In FY25, we move to the Great Place
to Work survey which will provide further insight and benchmarking data.
Colleague engagement
Group score
FY24
I would recommend this Company as a great place to work 76%
I feel committed to the Company goals 82%
I am proud to work for this Company 82%
Working here makes me want to do the best work I can 79%
I feel a strong sense of belonging to this Company 62%
I work in an environment where everyone can feel included,
respected and accepted for ‘who they are’
77%
77%
OF COLLEAGUES IN THE WATCHES OF
SWITZERLAND GROUP CONFIRM THAT
THEY FEEL INCLUDED, RESPECTED
AND ACCEPTED
We engage with colleagues through our regional Listening Forums chaired by
senior management and co-chaired by Baroness (Rosa) Monckton MBE,
Designated Non-Executive Director for Workforce Engagement. In March
2024, we held our Global Listening Forum with 35 representatives from across
the Company and Rosa reported back to the Board. As a result of the feedback
received through the year, a number of enhancements were introduced such as
new retail commission schemes in the UK and design and development of new
colleague facilities in the US. The Board also met with senior managers in
December 2023 to discuss key themes.
COLLEAGUE RELATIONS AND HEALTH & SAFETY
We place a high regard in treating our colleagues fairly and have well established
procedures to ensure we listen to our colleagues on issues that matter to them.
These also enable colleagues to raise grievances and concerns, both informally
and formally. Key highlights for this year include:
– Support for colleagues who have joined us through acquisition includes
clearcommunication and engagement activities
– Four Listening Forums per region and one Global Listening Forum in
March2024
– One Global and at least two Diversity Council meetings held throughout
theyear in each of the UK and US
– Regional creation of Employee Resource Groups to represent
underrepresented groups
On the few occasions we have needed to enter into redundancy conversations,
for example, due to the ending of a showroom lease, we make every effort to
retrain and redeploy colleagues, and we offer other career opportunities
wherever possible. Such conversations take place in the spirit of our values of
respect and trust and we ensure consultation discussions are transparent and
supportive. This year, where we entered into UK redundancy conversations, we
were pleased to confirm redeployment of 48% of colleagues.
HEALTH & SAFETY AND WELLBEING
We are committed to maintaining safety standards that comply with legislation
and enable colleagues to be confident that their workplace is safe. Our Health &
Safety Policy applies to all business activities and premises to ensure the health,
safety and welfare of our colleagues, clients and visitors. A Health & Safety
Committee comprising senior leaders from our UK and US operations meets
regularly and a rolling review and audit programme is in place. A formal
mechanism for reporting accidents is in place and we work closely with a third-
party provider.
– Annual UK and US raid training delivered in partnership with our security partners
– Low colleague accident rate of 1.39 accidents in 200,000 hours globally,
marginally lower than FY23 rate of 1.5
– Low sickness absence of <1% in the UK
– Trained mental health first aiders in US and UK assisting education and
colleague advocacy
8 3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
SUPPORT CENTRES
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
Following the successful launch of the new Carlton Park UK Support Centre, the
move to our Support Centre in Sunrise, Florida is driven by the fact that we had
outgrown our previous building and it was no longer fit for purpose. The
investment into our new buildings is a message to current and future colleagues
that the working environment in our Support Centres should be of an equal
standard to that of showrooms. These spaces enable better collaboration for
the day-to-day and both offer a comprehensive training suite and creative spaces
to learn and grow. In the US, we also retain our Repairs and Services Centres in
both Fort Lauderdale and Connecticut which is the central hub for all US after-
sales service needs.
Our colleagues in the US were consulted throughout the relocation process
including selecting the location, the design concept and implementation, through
to a fully consulted transition plan from our old offices. Key highlights include:
– Collaboration space for 60 colleagues
– State-of-the-art learning and education facility designed to be welcoming and
support internal and brand partner training on programs such as service
standards, leadership excellence and brand specific content
– Media centre equipped with state-of-the-art technology and interactive displays
– Space/designed to create a warm and welcoming Xenia experience
– Access to gym and fitness facilities such as yoga for enhanced wellbeing
We offer flexible working practices within our Support Centres and current
figures are as follows:
Types of contract Current figures
Hybrid working We offer flexible working for all support colleagues
in US and UK
Part time 19% of our UK workforce are part time workers
2% of our US workforce are part time workers
In retail, we have continued to consider and improve our colleagues’ work
environment through our showroom refurbishment plans.
The working environment for our colleagues and their wellbeing continues to be
of paramount importance to us.
Colleagues area in our new Support Centre, Sunrise, Florida
8 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Top: Colleagues area, Support Centre, Sunrise, Florida
Bottom: Colleague recreation areas, Support Centre, Sunrise, Florida
8 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
THE WATCHES OF SWITZERLAND
GROUP FOUNDATION
At the Watches of Switzerland Group, we are passionate about supporting the communities in which we operate.
It is a vital cornerstone of our culture, based on our ingrained caring spirit and a dedication to giving back.
We have long been committed to philanthropic endeavour, building strong
partnerships with charities like The Prince’s Trust which spans a period of
over 10 years. However, in 2021, we made things official, launching The
Watches of Switzerland Group Foundation.
The Foundation brings most of the Group’s charitable activities under one
umbrella and has so far received a total of £7.5 million in donations from the
Watches of Switzerland Group to support three pillars: the prevention or relief
of poverty; the advancement of education; and the relief of those in need by
reason of youth, age, ill-health, disability, financial hardship or other disadvantage.
This focus has led us to confirm key strategic partners in both the UK and US to
help us support the Foundation’s UNSDG goals and purpose pillars.
UK strategic partners US strategic partners
The Prince’s Trust The Prince’s Trust
Local food banks and Trussell Trust Habitat for Humanity
Fuel Bank Foundation Feeding South Florida
Crisis New York and Las Vegas Food Banks
The Foundation has donated a total of £4.1 million to charity partners to date,
with a total of £1.2 million donated in FY24. The money is positively impacting
our local communities. Through the strengthening of our relationships with our
key partners, we have re-engaged our workforce with volunteering, as well as
focused our funding on more deeply impactful initiatives. This deepens our
connection with our strategic partners and our communities.
The UK Foundation has a board of Trustees who bring drive and talent, including
model and fashion expert David Gandy, BAFTA-nominated actor John Hannah,
radio presenter Johnathan Joseph (otherwise known as DJ Spoony) and sports,
brands and diversity expert Terence Parris. They are joined on the board of
trustees by our Group CEO, Brian Duffy who acts as the Chair and Ruth
Benford, Executive Director, Marketing.
FY24 PERFORMANCE HIGHLIGHTS
– £7.5 million donated from the Watches of
Switzerland Group to the Foundation
– The Foundation donated £1,080,000 to UK
charities and $175,000 to US charities in FY24
– 23% increase in Group colleague volunteering
hours (864 total hours)
– £94,000 raised by Group colleagues as part of
The Prince’s Trust Palace to Palace Bike Ride
– £270,000 donated to UK charities through
payroll giving
FY25 AREAS OF FOCUS
– Maximising the partnership and opportunity
with our strategic partners
– Continuing to ensure our donations create
maximum impact
– Engaging and communicating to our internal
colleagues the work of The Watches of
Switzerland Group Foundation
– Continuing to develop our colleague
volunteering programme
SUPPORTING UNITED NATIONS
SUSTAINABLE DEVELOPMENT GOALS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
“We are immensely grateful to the Watches of Switzerland Group for
their volunteering commitment to inspiring young minds through our
education programmes. Their support not only enriches the lives of
countless young people but also lays the foundation for a brighter, more
promising future.”
SOPHIE MORELL
DIRECTOR OF PARTNERSHIPS, THE PRINCE’S TRUST
8 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Top: The Foundation has supported the Crisis at Christmas services since 2021
Bottom: Brian Duffy, CEO, completes The Prince’s Trust Palace to Palace Bike Ride
87
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
THE FOUNDATION – TRUSTEES OF THE BOARD
The Trustees meet at least quarterly and have committed to an engagement calendar with our strategic partners for FY25. In FY24, Brian Duffy and
Johnathan Joseph took part in the Palace to Palace Bike Ride for The Prince’s Trust.
Brian Duffy
Watches of
Switzerland Group CEO,
Chair of the Foundation
Ruth Benford
Watches of
Switzerland Group Executive
Director of Marketing
David Gandy
Model and fashion expert
John Hannah
BAFTA-nominated actor
Terence Parris
Sports, brands and
diversity expert
Johnathan Joseph
(also known as DJSpoony)
DJ and radio presenter
The Prince’s Trust Crisis UK Food banks The Fuel Bank Foundation Habitat for Humanity US Food banks
The Foundation’s continued
funding for The Trust’s
education programmes has
directly supported over
7,570 young people to date
with a further 1,000 helped
through the Young Person’s
Relief Fund. This includes
the funding for Prince’s
Trust USA’s first education
programme pilot across
New York which is pivotal
to the charity’s growth in
the region.
The Foundation supported
the funding of Crisis
general services, Christmas
Appeal and their clinical
psychologists. This year we
re-focused our funding to
support their structured
lead coaches.
Funding has made a
significant impact to the
Foundation’s local food
bank partners supporting
new initiatives such as:
partnering with schools to
fund new school jumpers,
new vans for donation
collections, the opening
ofa regional distribution
centre and the pilot of
amobile pantry.
The Foundation’s funding
has helped support
thousands of people
through the Winter fuel
crisis. Food bank partners
continue to benefit from
the Foundation’s Fuel Bank
network initiated inFY21.
Habitat for Humanity
works together with
families, local communities,
volunteers and partners
from around the world so
that more people are able
to live in affordable and
safe homes. We supported
new build projects for
families across New York,
Atlanta and Westchester.
Our US food bank
network has supported
hundreds of thousands
of people across South
Florida, New York and
LasVegas to access
emergency food.
8,570
YOUNG PEOPLE HELPED
THROUGH COMBINED
PROGRAMMES
213
PEOPLE HELPED BY OUR
FUNDING
168,726
PEOPLE FED THROUGH
OUR SUPPORT OF UK
FOOD BANKS*
26,370
PEOPLE ABLE TO ‘SWITCH
THE LIGHTS BACK ON’
5
HOUSING PROJECTS
SUPPORTED
30,000
PEOPLE FED THROUGH
FEEDING SOUTH
FLORIDA
* Includes Leicester, Glasgow, Euston, Manchester, Newcastle, Liverpool, Bristol, Edinburgh and Kingston
The Foundation’s unwavering support for its strategic charity partners has had a
significant impact on their beneficiaries and our local communities. Our food
bank partners continued to report an increased demand for their services with
some reporting up to a 90% increase vs FY23 in the UK. The ongoing impact of
the cost-of-living crisis has seen an average rise of 37% in food bank users in the
UK. The Prince’s Trust 2024 Youth Index report highlighted that happiness with
work, education, qualifications and money are at their lowest levels since
reporting began in 2009.
In FY24, the Foundation’s funding has continued to provide vital support to its
strategic partners, helping to tackle poverty, improve education, and provide
opportunities for those in times of desperate need.
864
TOTAL NUMBER OF GROUP
VOLUNTEERING HOURS
Combined with our financial support, the Group’s passionate colleagues have also
donated their time to support key initiatives in their local communities across the
UK and US. Over 110 colleagues have delivered 864 hours of volunteering.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
8 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
THE PRINCE’S TRUST
The Prince’s Trust helps people aged 11 to 30 to build confidence, get a job or
launch a business. It continues to be the Foundation’s key education partner,
improving access to quality education in our communities. Since launching our
partnership over ten years ago, 8,570 young people have been helped. This has
been through a combination of education programmes over time such as the
Young People Relief Fund and the launch of the Education Hub. Over the years,
The Group has also sponsored the Young Changemaker Award at The Prince’s
Trust Awards, and has acted as headline sponsor for the Palace to Palace Bike Ride.
Having previously supported the launch of The Prince’s Trust USA, the
Foundation was delighted to fund the charity’s first Education Programme pilot
in New York City, ‘The Enterprise Challenge’, in FY23. Following the success of
the pilot, which supported 30 young people, the Foundation approved a further
proposal in FY24 to continue the expansion of the programme supporting a
total of 170 young people in the US. The programme runs in partnership with
City Year, an education non-profit organisation, and is an inter-schools
competition promoting entrepreneurship, and raising aspirations and confidence
and the launch of the Education Hub. The final was judged by the Group’s
President North America and Deputy CEO David Hurley.
This year to celebrate our 10th year in partnership, the Foundation increased its
funding significantly with a donation of £750,000 across the UK and US. The
Foundation became the first global partner for The Enterprise Challenge
Programme – an interschool competition promoting entrepreneurship, raising
aspirations and confidence. Colleagues got involved with the programme, from
volunteering during the competition stage, to judging the regional finals. The final
was judged by the Foundation’s Trustee David Gandy.
CRISIS
Crisis is a national UK charity for people experiencing homelessness. In 2021, the
Foundation began its partnership with Crisis by supporting the Crisis at
Christmas campaign with an initial donation of £25,000, helping Crisis support
over 500 guests with somewhere safe to stay over Christmas. The Foundation
subsequently approved a proposal to support Crisis’ recruitment of clinical
psychologists with the aim to end homelessness and increase social mobility.
Crisis clinical psychologists provide intensive 1:1 specialist support to members,
whilst supporting frontline staff. In FY23 and FY24, the Foundation has continued
to support the Crisis at Christmas campaign, whilst focusing funding on case
manager and lead worker salaries. Crisis’ services work holistically together; by
supporting their core workers, we are directly helping Crisis to change lives and
empower individuals to help create sustainable routes out of homelessness.
FUEL BANK FOUNDATION
The Fuel Bank Foundation was created to help people in fuel crisis by providing
people with financial support and practical advice to get them back on their feet.
In 2022, the Foundation launched its strategic partnership with the Fuel Bank
Foundation to complement the food bank programme. Initially supporting 12
centres, the Foundation expanded its support to ten additional centres in FY23
and donated a further £300,000. 95% of those supported by the Fuel Bank
Foundation reported having to choose between heating or eating this winter.
The Foundation split its donation across FY23 and FY24 which has supported
26,370 (approximately 10,500 were children) people to turn their lights and/or
heating ‘back on’. 91% of users reported being able to better cope financially, and
61% reported an improvement in mental wellbeing.
3,841
HELPED THROUGH EDUCATION
PROGRAMMES
3,000
HELPED THROUGH EDUCATION HUB
1,000
HELPED THROUGH RELIEF FUND
DJ Spoony, Foundation Trustee, completes The Prince’s Trust Palace to Palace Bike Ride Brian Duffy, CEO, and Foundation Trustee David Gandy support The Prince’s Trust
Enterprise Programme
“Your support of lead workers will
mean long-term impact on people’s
lives. Thank you to the Watches of
Switzerland Group for their ongoing
support for our core services.”
MATT DOWNIE
CEO CRISIS
8 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
THE FOOD BANK PROGRAMME UK
The Foundation has enabled the food bank programme to have greater
engagement and impact over the last year. In FY23, the Foundation’s flexible
funding for food banks allowed its partners to expand their support in their local
communities. Leicester South Food Bank were able to move to a new location
which also acts as the Leicester distribution centre supporting 17 other food
banks in the area, and Newcastle were able to open a mobile pantry to allow
beneficiaries to move away from needing a food bank. Following the success of
this, FY24 saw the Foundation develop its relationships further to provide more
strategic funding that would support its food banks to develop projects they
otherwise wouldn’t be able too. The donation to Kingston food bank has helped
them to expand their Employment Worx service, a vital initiative empowering
service users into the workforce and therefore moving away from needing
emergency food provisions.
Beyond financial support, the Foundation has set up monthly calls with its
network to keep up to date on trends, allow space for learning and to hear
directly from its network what type of additional support is needed and
challenges they might be facing. For example, food banks are increasingly needing
to purchase food to be able to meet the emergency food needs in their
communities. Out of the 11 UK food banks, six are reporting a spend of £5,000
- £30,000 per month on food alone. The monthly calls have allowed Leicester
South to spearhead an initiative looking at reducing this spend through strategic
partnerships with food retailers. In addition, the donation to Glasgow South East
Food Bank provided 200 with food retailers. The Chair and Trustees have
committed to supporting this project through their own networks outside of
the donation from the Foundation. With the success of the food bank network
calls, the Foundation has set up regular touch points for both UK and US
partners, with the first call happening in June 2024.
The Foundation supported households with £100 food vouchers at Christmas.
These households were nominated by the food banks key referral agencies for
those most in need. An additional 100 x £30 vouchers were also distributed to
service users in the week leading up to Christmas.
During the year, we donated a total of £353,000 to our UK food bank partners:
Trussell Trus t
Leicester South Food Bank
Glasgow SE Food Bank
Euston Food Bank
Manchester Central Food Bank
Newcastle West End Food Bank
Birmingham Central Food Bank
Liverpool St Andrew’s Community Network Food Bank
Bristol InHope Food Bank
Edinburgh North West Food Bank
Kingston Food Bank
THE FOOD BANK PROGRAMME US
Last year, the Foundation expanded its support of food banks to the US
supporting Feeding South Florida, Three Square Meals (Las Vegas) and the New
York Food Bank. The Foundation has connected colleagues with volunteering
opportunities such as delivering meals to those in need. The initial donation to
Feeding South Florida had significant impact to local communities in the region,
supporting eight food banks across South Florida, and feeding nearly 30,000
people. The Foundation’s donation of $176,500 in Spring 2023 has allowed the
charity to fund a school pantry, which provides emergency food for the school
for a full 12 months as well as a culinary program with stipends for participants.
HABITAT FOR HUMANITY
Habitat for Humanity is a non-profit organisation that helps families build and
improve places to call home. It believes that affordable housing plays a critical
role in strong and stable communities. The charity works together with families,
local communities, volunteers and partners from around the world so that more
people are able to live in affordable and safe homes. In FY23, the Foundation
donated $294,000 to sponsor three house builds for families in Miami, Atlanta
and Westchester – with colleagues supporting a further two house builds
through volunteering in FY24. The Foundation are hoping to strengthen its
partnership with Habitat for Humanity over the next year by providing more
volunteers and vital funding through the Foundation to provide safe homes for
those who need them.
“By funding our stipends for our culinary
programme, unemployed students will have
the means to complete the training and the
opportunity to move into employment.”
ALLYSON VAULX
AVP PHILANTHROPY, FEEDING SOUTH FLORIDA
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
9 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Top: Beneficiaries of Feeding South Florida, supported by the Foundation
Bottom: Trussell Trust Food Bank, supported by the Foundation
9 1
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
OUR PLANET
9 2
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
SUPPORTING UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
FY24 PERFORMANCE HIGHLIGHTS
– Reduced our Group GHG emissions by 3.1% year-on-year
– Improved our CDP Climate Change score year-on-year
from a ‘C’ to a ‘B’
– Increased the number of watches kept in circulation via our
repairs and pre-owned businesses year-on-year by 2%
measured as a percentage of new watch sales
– 31% of client home deliveries by EV vehicles
– 92% of vehicle fleet EV or hybrid
– Launched internal incentive to reward positive
environmental behaviours and advocacy
– Highlighting industry progress through ecommerce
platforms
– As at June 2024 hold ISS Environmental QualityScore ‘1’
FY25 AREAS OF FOCUS
– Set long-term, science-based targets to reach net-zero GHG
emissions by 2050 using market-based emission factors
– Align our reporting to the Transition Plan Taskforce
framework and work internally to build out our climate
transition plan
– Enhance our procurement and supply chain management
capability to further strengthen engagement with
environmental goals
– Leverage AI to support supply chain engagement and
improve emission data quality and reporting
– Source renewable energy across our Group and continue
our roll out of LED lighting
– Continue to support circularity by investing in our repairs
and pre-owned businesses
How our business impacts the environment and how the environment impacts
our business, are fundamental considerations in our decision-making processes.
BUSINESS IMPACTS
We understand our business and supply chain have the potential to negatively
impact our planet through the mining of metals and gemstones, the production
and retailing of products, energy use, transportation, water and waste.
We strive to minimise these impacts and improve our overall environmental
performance through ongoing stakeholder engagement, innovation and
technological advancement and initiatives to build climate change resilience and
protect nature and biodiversity.
ENVIRONMENT POLICY
The Environment Policy sets out our commitment to the continual improvement
of the management and operation of our activities to minimise any adverse
effects on the environment and public health.
This Policy applies to all Group operations worldwide and every colleague and
contractor we employ. It refers to compliance with relevant environmental laws
and regulations, ensuring environmental awareness and training, transparent
dealings, the conservation of resources, sustainable procurement, aiming to
mitigate against climate change, and managing risk.
Our Vendor Code of Conduct includes our requirements in relation to
environmental management and the prevention, mitigation and control of serious
environmental and health impacts resulting from our supplier partners’ operations,
including, but not limited to, raw materials, energy and greenhouse gas (GHG)
emissions, water, waste, chemical and hazardous substance use, air quality and
nature and biodiversity. It is supported by comprehensive ESG Partner Standards,
designed to engage supplier partners with the achievement of environmental goals.
OUR APPROACH
The Group is committed to operating to high levels of environmental stewardship, while
safeguarding against climate related risk and supporting a more circular economy through
our repairs and pre-owned businesses.
CARING FOR OUR PLANET
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
CLIMATE ACTION
The Group is committed to building climate resilience and achieving net-zero
GHG emissions by 2050. We are taking prioritised action to reduce our
emissions in line with what the latest climate science says is necessary to meet
the goals of the Paris Agreement and pursue efforts to limit warming to 1.5°C.
In March 2023, our near-term emission targets were verified by the Science
Based Targets initiative (SBTi), which is a global body and collaboration between
CDP, the UN Global Compact, World Resources Institute (WRI) and the
Worldwide Fund for Nature (WWF).
In FY25, the Group will set long-term emission reduction targets and apply to
the Science Based Targets initiative for verification.
Public commitments
Near-term SBTs aligned to 1.5°C under
Paris Climate Agreement Net-zero
Scope 1 and 2 50% reduction in absolute emissions
by2030 from a FY20 base year
2050
Scope 3 42% reduction in absolute emissions
by2030 from a FY20 base year
2050
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
TOTAL SCOPE 1, 2 AND 3 EMISSIONS
Overall, in FY24 our total gross GHG emissions across our Group decreased by
3.1% and our Emissions Intensity Ratio reduced from 0.1125 to 0.1094 tCO
2
e
per £’000 revenue
SCOPE 1 & 2 EMISSIONS
The Group reports a 9.5% increase in our Scope 1 & 2 emissions from 3,866 to
4,233 tCO
2
e year-on-year, which increased our Intensity Ratio from 0.0025 to
0.0028 tCO
2
e per £’000 revenue.
This increase is a consequence of the year-on-year growth in our property
portfolio, including the showrooms acquired in November 2023.
Another key factor was the relocation of UK support centre colleagues from
Aurum House, to new premises at Carlton Park in May 2023. We continued to
operate both buildings during FY24, with Aurum House accommodating
strategic functions such as our Hallmark insurance business, following the closure
of their office at Millfield House and its conversion into a new 6,000 sq. ft
Repairs and Servicing Centre.
While this year-on-year increase in Scope 1 and 2 emissions is disappointing, our
total emissions intensity ratio per sq. ft has decreased from 0.2619 to 0.2320, and
we remain committed to achieving our near-term science-based targets.
Our target is to reduce
‘Scope 1 and 2’ emissions
Scope 3 emissions
50%
by
TOTAL GROSS
SCOPE 1 and 2 (TCO
2
E)
FY20
BASE YEAR
Estimated ‘direct’ emissions
resulting from our
Group Operation
4,128 tCO
2
e
FY24
4,233 tCO
2
e 163,937 tCO
2
e
TOTAL GROSS
SCOPE 3 (TCO
2
E)
FY20
BASE YEAR
Estimated ‘indirect’ emissions
resulting primarily from
‘Purchased Goods
and Services’.
100,899 tCO
2
e
by 2030
42%
by
by 2030
FY24
OUR EMISSIONS REDUCTION TARGETS
9 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
LEVERAGING AI TO SUPPORT OUR EMISSIONS REDUCTION
STRATEGY
With an estimated 97% of our total emissions within Scope 3, we are taking
action to gain a more accurate understanding of our supply chain emissions
and, where possible, support our supplier partners with their emissions
reduction strategies.
In FY24, as part of our project to leverage artificial intelligence (AI) to
enhance our ESG reporting, we used AI outputs from semi-automated
tools in our Scope 3 Category 1, 2 & 4 supplier specific emission calculations
to validate verified emission values. and financial revenues retrieved from
publicly available sources. AI outputs also supported our due diligence
processes when mapping the Group’s unique supplier entities against
publicly available datasets such as CDP.
In FY25, we will build on the success of this data collection and verification
process to further streamline our reporting and, where necessary, support
supplier partners with their own data collection process.
Our focus remains on reducing energy consumption, as well as generating our
own energy, through the planned installation of solar panels on our Carlton Park
Support Centre in FY25. Also in FY25, we plan to align with market factors
when setting long-term science-based emission reduction targets to leverage the
benefits of purchasing clean energy.
Following a project to consolidate our gas suppliers in the UK, we saw a
reduction in purchased gas and continue to seek further efficiencies.
More information on our energy efficiency initiatives and performance can be
found on pages 96 to 99.
SCOPE 3 EMISSIONS
The Group is pleased to report a 3.1% reduction in Scope 3 emissions year-on-
year from 169,698 tCO
2
to 163,938 tCO
2
e. This decrease is the result of a
combination of reduced Category 1 spend, enhanced primary data, and
improved data collection processes. Better data collection, including the use of
AI technology, also allowed us to adopt the Greenhouse Gas Protocol’s hybrid
reporting methodology, which was applied to 10% of our FY24 spend in our
Category 1, 2 and 4 emission calculation.
The hybrid approach reflects the use of supplier specific data in conjunction with
a spend-based approach, and is more robust in comparison to previous spend-
based approach calculations, as it allows more accurate reporting and a focus on
actions, which can support Scope 3 emission reduction.
Our FY20 and FY23 datasets were also recalculated using the hybrid approach
to give comparable results and are disclosed with our reporting categories on
page 121.
The table on page 121 provides a detailed breakdown of our Scope 1, 2 and 3
greenhouse gas (GHG) emissions by activity, calculated with reference to the
GHG Protocol.
SUPPLY CHAIN ENGAGEMENT
Collaboration with brand partners and other suppliers is key to achieving our
climate ambitions and addressing growing areas of public concern, such as
ensuring robust traceability mechanisms and protecting and preserving nature
and biodiversity.
Through our supply chain engagement, we are working to better understand the
environmental impact of the products we sell and services we use, while
supporting the achievement of our near-term science-based target to reduce
Scope 3 carbon emissions by 42% by 2030.
Our ESG Partner Standards set out our environmental goals, and the actions
needed throughout our value chain to achieve them. Priorities include the
sustainable procurement of raw materials, transport and logistics, circularity,
eco-innovation, biodiversity and nature, product information, packaging and
marketing and events.
Supplier partners are strongly encouraged to set science-based emission
reduction targets and proactively share emissions data with us, either directly by
completing a questionnaire, publicly through CDP, or through other reporting
platforms, such as EcoVadis.
We partner with EcoVadis, the global sustainability ratings platform, and advocate
the use of their user-friendly carbon action module through our ESG Partner
Standards. Brand partners and other suppliers are also asked to align with well-
recognised sustainability certifications that are relevant to the product or service
they provide.
Our brand partners are highly active in reducing their impact on the environment
and continue to introduce more sustainable processes and materials into their
research and product design. For example, the Watch & Jewellery Initiative 2030
(WJI 2030) founded in 2022 by Cartier and Kering, has 60 member companies
from the watch and jewellery industry, including many of our brands such as
Cartier, Chanel, IWC Schaffhausen and Panerai. The Group advocates
membership of WJI 2030 and its goals to achieve a more sustainable industry
through collaborative initiatives in relation to climate action, preserving resources
and fostering inclusiveness.
9 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Properties we control and where
installation is financially and
practically viable
FY22 FY23 FY24 2025
UK US Group UK US Europe Group UK US Europe Group Target
LED lighting 82% 41% 70% 90% 51% 100% 84% 85% 67% 100% 81% 100%
Renewable energy 100% 0% 77% 100% 0% 0% 77% 100% 0% 0% 70% 100%
In FY25, we will continue to work towards achieving ISO 50001 international
energy management certification, in order to formalise and build on work
already done to optimise energy use across our Group and further reduce costs
and GHG emissions.
AFFORDABLE AND CLEAN ENERGY
We continue to work with new and existing landlords with the goal of powering
all properties within our control from renewable energy sources by 2025.
Many of our shopping centre landlords are transitioning to clean energy, allowing
showrooms to directly benefit from clean energy sources and more stable rates.
These include Meadowhall, White Rose and Metrocentre in the UK, and Simon
Property Group in the US.
In the UK, 100% of all properties we control are backed by Renewable Energy
Guarantees of Origin (REGOs), and in FY25, we will purchase Renewable Energy
Certificates (RECs) in the US and Europe to achieve our target of sourcing 100%
renewable energy across our Group by 2025.
In February 2024, our Carlton Park landlord gave permission for on-site
renewable energy production, through the installation of solar panels. This
project will commence early in 2025, with the CO
2
offset estimated to be 70
tonnes*, resulting in over £3 million in energy savings over the next 25 years.
The Group’s efforts to conserve energy and reduce GHG emissions are
continually reviewed and supported by colleague awareness initiatives and training
programmes. Our energy use and GHG emissions are reported on page 121.
*2020 emission factors
ENERGY MANAGEMENT
We strive to use energy in the most efficient, cost effective and responsible way and
comply with all relevant local and international environmental laws and regulations.
Our energy management system includes enhancing data collection and
implementing energy efficient technologies such as LED lighting and motion
sensors throughout our estate to reduce energy waste. We invest in the most
efficient and reliable Heating, Ventilation, and Air Conditioning (HVAC) systems,
which are regularly serviced in line with manufacturers’ guidelines. Temperatures
are regulated and we use R32 refrigerant gas and R410 A, where there is no
alternative. During FY24, a fault in our Knightsbridge showroom necessitated a
full system repair, resulting in a significant year-on-year increase in our UK
refrigerant emissions, which underlined the importance of our investment in our
HVAC systems.
When searching for new premises and negotiating leases, we prefer locations with
green building certifications such as BREEAM or LEED, demonstrating a landlord’s
commitment to assessing and improving a building’s environmental performance,
including energy efficiency, water use and the sustainability of raw materials.
Energy efficiency is a priority within our redevelopment plans, which is evident
within our Carlton Park Support Centre. In addition to standard energy-efficient
technologies, the building has been fitted with a Variable Refrigerant Flow (VRF)
system, which uses heat pumps to provide hot water. In the UK, energy
consumption is monitored on a site-by-site basis in collaboration with a specialist
energy partner, and from July 2024, we will be compliant with Phase 3 of the
Energy Savings Opportunity Scheme.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
9 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
William Wood Watches: Valiant Collection – The Red Watch
A stainless-steel automatic diving watch featuring a vintage fire bell
seconds hand, fire engine pattern seconds track with a crown made from
a 100-year-old melted-down British brass firefighter’s helmet and straps
which are made from upcycled fire hoses.
9 7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
BUILDING MANAGEMENT
Maintaining strong relationships with our landlords is fundamental to the smooth
running of our showrooms and achieving environmental goals.
In keeping with our historic brand image, our property portfolio includes a small
number of older premises that require particular attention in order to operate
at optimum performance.
Our in-house facilities management teams proactively engage landlords to
ensure our properties are well maintained, are energy efficient and have the
appropriate fire, gas and electrical safety certifications in place.
For an inclusive shopping environment, we meticulously plan our showroom
layouts to ensure accessibility, including space for wheelchair manoeuvrability
and unobstructed pathways. Where necessary, we also provide physical
accommodations, supported by colleague training to assist clients with disabilities.
All sites are subject to regular, internal and independent audits to ensure
conformance with all relevant national and international laws, as well as our own
environmental standards.
WATER
Maintaining a reliable and hygienic water supply requires a significant amount of
energy, at the same time, climate change and extreme weather conditions
increasingly impact the predictability of water availability.
As a retailer, our water usage is relatively low. We promote water-saving
measures across our Group and continue to take steps to reduce our freshwater
intensity, for example, our new Carlton Park Support Centre is equipped with
water efficient washroom facilities, which reduces the volume of water required
to wash and flush by up to 50% compared with regular faucets and cisterns.
Water meter data is used to identify sites with excessive water use and resolve
any problems, and we continue to work with experts to gather baseline data to
further reduce water use.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
Through our ESG Partner Standards, we ask supplier partners to minimise water
waste and conduct industrial wastewater quality testing and/or monitoring as
required by local law. No incidents of non-compliance with water quality or
quantity permits, standards, or regulations were reported in FY24.
WASTE MANAGEMENT
We recognise the benefits of effective waste management systems to conserve
natural resources, reduce costs and support a more circular economy, and are
committed to achieving zero waste to landfill across our Group, through
avoidance, recycling and reuse.
Across our Group, we have waste management arrangements in place with
landlords and certified waste management companies, to ensure the responsible
collection, transportation, monitoring, disposal and recycling of waste.
In FY24, we continued our efforts to streamline waste management processes
and improve data collection, to more accurately quantify our waste volumes and
gain a better understanding of the types of materials recycled and resources
diverted from landfill.
The majority of our shopping centre landlords report low or nil waste to landfill
volumes. With shared waste management facilities making it difficult for us to
accurately record and monitor waste streams and volumes, all UK showrooms
have been issued with weighing scales and colleagues are asked to separate,
weigh and record waste volumes. This initiative is supported by waste
management awareness training and colleagues report that they are now more
conscious about what they dispose of, and how.
WASTE INTENSITY
FY22 FY23 FY24
Waste in
tonnes
% to
landfill
Waste in
tonnes
% to
landfill
Waste in
tonnes
% to
landfill
UK 375 1 889 1 301 1
US 59 1 210 1 4 1
Europe n/ n/ 53 1 61 n/
Total 434 1,152 366
Intensity
ratio (sq. ft)
0.0008 0.0017 0.0005
WASTE ELECTRONIC AND ELECTRICAL EQUIPMENT
We strive to deliver continuous improvements to our recycling and sustainability
programme and comply with the Waste Electronic and Electrical Equipment
(WEEE) Directive, which forms part of our Group policies and procedures in
Europe. We enable and encourage WEEE recycling and in the US, recycle all
electronics to the standards of the Environmental Protection Agency (EPA),
Occupational Safety and Health Administration (OSHA), and federal and state
laws. Due to the mechanical nature of the majority of our watches and the small
size of watch batteries, the volume of WEEE we handle is very low.
HAZARDOUS WASTE
We comply with all applicable national and international environmental laws and
regulations, including the collection, treatment and disposal of hazardous waste,
for which we partner with licensed contractors who operate an infrastructure of
ISO 9001, ISO 14001 and OHSAS accredited hazardous waste treatment sites.
REWARDING COLLEAGUES FOR ‘GREEN’ BEHAVIOURS
In October 2023, we launched a new colleague initiative to reward positive
behaviours in support of our Purpose, and caring for our communities and
our planet.
Our GreenVibE incentive, operates through our award-winning recognition
platform, VibE, and is promoted groupwide via our interactive colleague
engagement platform, Workplace.
Colleagues are encouraged to suggest ideas to help improve our environmental
performance or share ‘green deeds’, performed by themselves or other team
members. Each week, the best ideas or deeds are communicated to the
business and the winning colleague or colleagues are rewarded with points
that can be redeemed for retail or experience vouchers.
This initiative is proving to be a successful way of engaging colleagues with
complex climate goals and empowering them to help make a tangible
difference, whatever their role and sphere of influence.
To date, over 50 colleagues have been recognised through GreenVibE and
many ideas have been implemented, such as enhancements to operational
processes to reduce packaging and transit, as well as technological
improvements, including digital business cards and paperless timesheets.
9 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
TRANSPORTATION AND LOGISTICS
We are working to reduce carbon emissions as a result of downstream transportation, business travel and colleague commuting. These journeys can take place by
road, rail, sea and air.
By the end of the year, 92% of our UK fleet are electric or hybrid and we do not currently operate company cars in the US or Europe. To encourage the wider use
of personal electric vehicles, an initial 20 charging points have been installed at our new Carlton Park Support Centre, with provision for a further 20. An additional
8 charging points are available at two other UK sites, all of which are on a preferential tariff for colleagues.
FY22 FY23 FY24 2030
UK US Group UK US Europe Group UK US Europe Group Target
Electric or hybrid company fleet 58% n/ 58% 83% n/ n/ 83% 92% n/ n/ 92% 100%
Our UK and Europe and US Travel Policies require colleagues to apply sound judgement before arranging business travel. Air travel is limited to journeys necessary
to progress business objectives and digital technologies are widely encouraged as an effective means of enabling collaborative working and maintaining engagement
across our Group.
Colleagues are encouraged to cycle to work through our cycle to work scheme, which allows them the opportunity of purchasing a tax efficient bicycle and
accessories. All Support Centre sites are also equipped with showering facilities and secure cycle parking.
Our Luxury Watch and Jewellery Virtual Boutique provides clients with an online concierge service, without the need for them to travel. To further support a
cleaner, greener, online experience, we continued to increase the number of home deliveries made by EVs in the UK and are working across our Group to offer
clients more environmentally friendly delivery options.
FY22 FY23 FY24 2030
UK US Group UK US Europe Group UK US Europe Group Target
Home deliveries by electric vehicles 13% 0% 0% 22% 0% n/ 17% 32% 0% n/ 31% 100%
Through our ESG Partner Standards, we encourage supplier partners to continually improve the efficiency of their transportation and logistics and participate in
joint industry initiatives, such as EV100, which is a global initiative committed to accelerating the transition to electric vehicles by 2030. The Group’s vehicle fleet is
considered too small to join this initiative.
PACKAGING
High-quality, durable packaging is necessary to protect the products we sell, however, the Group is committed to limiting excess packaging and introducing more
sustainable materials wherever possible to help reduce waste, conserve resources and minimise pollution.
In FY24, we worked with own brand packaging suppliers to secure fit-for-purpose jewellery presentation boxes that appeal to luxury clientele and are recyclable.
It is envisaged that current packaging stocks will be used by the end of 2025, enabling us to transition a 100% fully recyclable own brand packaging solution, well
ahead of our 2030 target.
FY23 FY24 2030
UK US Europe Group UK US Europe Group Target
Recyclable packaging (own brand)* 66% 100% n/ 71% 66% 100% n/ 71% 100%
* Excludes small magnets and foam which must be separated before recycling.
Our principal packaging suppliers operate to ISO 9001 and ISO 14001 quality standards, and in the UK, we are fully compliant with The Producer Responsibility
Obligations (Packaging Waste) Regulations 2007, through the registered compliance scheme.
We are continually looking for ways to make it easier for clients to be greener, including printing reminders to recycle on packaging and gift boxes. Where
appropriate, we also ask clients if they would like to reuse presentation boxes to minimise any negative ‘end-of-life’ environmental impact.
The majority of our branded watch boxes are considered part of the product itself and kept as storage, however, we continue to see innovations in packaging design
and production, including fully recyclable, biodegradable, and compostable materials such as mycelium and soluble seaweed that can be reused as plant fertiliser.
9 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
WOLF watch winders, watch cases and travel rolls are crafted from a variety of sustainable materials including vegan leather, recycled plastics and sustainably grown Portuguese cork. Their
gift boxes and packing materials are also plastic-free and made using FSC paper and recyclable cardboard.
BIODIVERSITY AND OUR IMPACT ON NATURE
We recognise nature and biodiversity form the foundation of the world’s
economy, yet they are deteriorating and declining faster than at any time in
human history.
The Group supports the recommendations from the Taskforce on Nature-
Related Financial Disclosures and is working to understand risks and opportunities
in relation to nature-related issues within our value chain, in order to ensure they
are incorporated into our strategic planning, risk management and asset
allocation decisions.
Biodiversity and the impact on nature is considered as a factor when procuring
products and services, as well as in the design and modification of showrooms,
offices, equipment, and processes.
We will not tolerate any harsh or inhumane treatment of animals and all suppliers
must conform to relevant international laws and have processes in place to
protect endangered species and habitats.
Our Vendor Code of Conduct includes a specific requirement for brand partners
and other suppliers to prevent, mitigate and control any impacts from their
operations on biodiversity. Our ESG Partner Standards also ask supplier partners
to share relevant data and report progress in relation to preserving resources
and the rehabilitation of impacted ecosystems. These standards also highlight our
goal to offer more socially and environmentally preferable product options.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
Clients can choose from a growing number of product options, including watch
straps and packaging made from a variety of waste materials, including recycled
stainless steel, plastic, rubber and cloth, and we are starting to see more
biodegradable packaging options, made from organic matter, such as mushrooms,
seaweed and green waste.
Hard woods or hard wood veneers found within items such as jewellery boxes
and watch cases, are sourced from reputable, sustainably managed sources and
we only allow certified timber in new showrooms, workshops and office designs.
Our Carlton Park Support Centre is set within 32 acres of maintained woodlands
and green space, which are home to a variety of plant life and insects. After a
series of negotiations with our landlords and local apiarists, we will introduce
several beehives in FY25, which will be leased and managed by a local beekeeper,
further supporting our ecosystem and the biodiversity of plant and animal life.
10 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
To mark Earth Day on 22 April 2024, our Hallmark Team gifted
hundreds of sunflower seedlings to colleagues working in our
Carlton Park Support Centre.
The seedlings were accompanied by instructions on how to nurture and
grow them into pollination powerhouses to attract butterflies and bees.
This initiative to support local biodiversity is one of many inspired by our
GreenVibE colleague incentive scheme.
101
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
AVOID
Our expert sales teams are
highly trained to help clients
make once-in-a-lifetime
choices to suit individual
needs and lifestyles
REDUCE
Our high-quality watches
and jewellery are designed
to last, helping clients to
buy less, by buying well
REUSE
Our pre-owned business
reduces the demand for
raw materials and carbon
emissions from the
manufacturing process
REPA IR
Our expert after-care and
servicing teams help keep
watches and jewellery at
their highest value and use
for as long as possible
RECYCLE
Our product options
increasingly contain the
innovative use of waste
materials and parts
SUPPORTING CIRCULARITY ACROSS OUR GROUP
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
The Group is committed to promoting innovation and advancement in circular design, while keeping more watches and
jewellery in circulation through our repairs and pre-owned businesses. In FY24, we continued to increase the number of
watches kept in circulation through our repairs and pre-owned businesses year-on-year.
.
SUPPORTING A CIRCULAR ECONOMY
10 2
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
REPAIRS AND SERVICING
To help keep more luxury watches at their highest value and utilisation for
longer, in FY24, we opened a new Repairs and Servicing Centre in Leicester. This
centre is meticulously designed to the highest Swiss standards and will allow our
UK teams to accommodate a further 14,000 repairs over the next three years,
while providing additional repairs and servicing support for strategic brand
partners. It also provides an opportunity to attract and train more watchmakers
and technicians, accelerate repair and servicing turnaround times, and support
the growth of pre-owned watch sales.
To further expand our repairs and servicing capacity in the UK, we are relocating
our Newcastle Watch Workshop from its current location into a larger
neighbouring location. This allows for the installation of a state-of-the-art
workshop, which will allow us to quadruple the workshop’s repairs and servicing
capacity once recruited. The Group has the largest luxury watch services
provision of any UK retailer.
Despite our continued investment in additional capacity, repairs by expert
technicians have been known to take several months to complete. In response
to a need to enhance this client journey, in FY24 we launched the first phase of
a client-facing repairs system, which allows UK clients to track and monitor the
progress of their repairs. A trial of this user-friendly digital interface will launch in
our US showrooms in FY25.
In the US, our Repairs and Servicing Group (RSG) comprises two strategically
located service centres in Florida and Connecticut. In FY24, we grew our RSG
capacity by almost 3,800 sq. ft to accommodate a further 28 watch makers and
technicians, and meet demand, with US repairs sales increasing 85% from FY22
to FY24.
PRE-OWNED
Opting for a high-quality pre-owned watch reduces the demand for raw
materials and results in less overall energy and waste.
Through our sales channels, we offer clients a curated collection of luxury pre-
owned watches and vintage timepieces, including Jaeger-LeCoultre, Patek
Philippe, Cartier, Breitling, OMEGA, and TAG Heuer.
In FY24, the Group was proud to become part of the network of Official Rolex
Retailers, authorised to sell Rolex Certified Pre-Owned watches in the US and UK.
Our US-based pre-owned watch business, Analog:Shift, is a key contributor to
achieving our circularity goal.
Our Rolex Certified Pre-Owned programme is attracting new clients, many of
whom see brand-certified, fully warrantied and guaranteed pre-owned
timepieces as a more sustainable, accessible alternative to new models. In FY25,
we will seek to attract more new clients and tempt current clients, with the
introduction of a dedicated shop-in-shop display, supported by targeted
marketing campaigns.
SUPPORTING GROWTH
We continue to grow our team of highly skilled and accredited watchmakers;
creating work opportunities and supporting local economies, while helping us to
keep more watches at their highest utilisation and value for as long as possible.
All three students we sponsored to study at the British School of Watchmaking,
successfully completed their course in FY23, and in January 2024, we supported
a fourth candidate by paying their course fees in full. Our three US students who
participated in accelerated watchmaking training in partnership with the Lititz
Watch Technicum under the Swiss American Watchmakers Training Alliance
(SAWTA) certification programme, will undergo their final assessment in August
2024 before joining our team of certified watchmakers.
In FY25, a number of trainees will achieve their full brand certifications and join
our team of accredited watchmakers. We continue to actively recruit and
develop talented individuals into these specialist roles, supported by our
considerable investment into training and creating service centres of excellence.
10 3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ACADÉMIE HORLOGÈRE DES CRÉATEURS INDÉPENDANTS (AHCI)
In April 2024, we secured a three-year partnership with the AHCI, which exists
to preserve traditional watchmaking, support talented watchmakers and
promote quality, innovation and creativity.
This non-profit organisation provides watchmaking’s rising stars with a platform,
as well as support and guidance, as they hone their craft and begin their careers.
As an official partner, the Group can support young watchmakers and call on a
network of well-established, prestigious watchmakers to help elevate the
craftsmanship, precision and allure of luxury watches through events and other
promotional activities.
NEW JEWELLERY, OLD MEMORIES
Through our Mappin & Webb business, we have been combining timeless
craftmanship with superior quality and contemporary design for over 235 years.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
Mappin & Webb’s skilled craftsmen and women can restore jewellery items of
any age, make, or design to their original glory, and we offer clients a range of
repair, cleaning, restoration, and renovation services, alongside the latest branded
and fine jewellery collections.
From family heirlooms to flea market finds, items can be skilfully modernised and
customised to be enjoyed by future generations or fashionistas, who want to
make a statement with jewellery that complements their tastes and lifestyle,
while reducing the reliance on raw materials.
In May 2024, our Mappin & Webb business was granted Royal Warrant status
to His Majesty the King for the full five-year term. The Group’s commitment to
sustainability, and reducing our impact on the environment, was a determining
factor in our application process.
Our support of a more circular economy is further boosted by our Susan
Caplan offering and Betteridge business in the US, which specialise in the
restoration of vintage designer jewellery.
10 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
SPOTLIGHT ON CIRCULAR DESIGN
After Watches of Switzerland celebrated the exclusive UK launch of the first
fully eco-innovative luxury watch, ID Genève, in March 2023, the Financial
Times reported in October 2023, that Hollywood actor and environmentalist,
Leonardo DiCaprio, had personally invested in the Swiss start-up. It was also
reported that the brand had become Switzerland’s first luxury watch
company to be awarded a ‘B Corp’ certification.
B Corp is an independent certification awarded to companies demonstrating
enhanced commitments to environmental and social goals.
ID Genève’s circular model is founded on the principles of the circular
economy and based entirely on the reuse of materials, the elimination of
waste and pollution, and the regeneration of nature.
DiCaprio said he had invested in ID Genève because the brand was
“disrupting the luxury watch industry” and “championing ethically sourced
and recycled materials and low-carbon footprint processes in a circular economy”.
We will continue to improve colleague knowledge on the principles and
practicalities of the circular economy, in order to highlight circular attributes
in the products we sell and services we offer and help clients make more
sustainable choices.
10 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
We fully support the recommendations of the Financial Stability Board’s Task
Force on Climate Related Financial Disclosures (TCFD) and continue to evolve
our ESG Strategy to ensure potential climate related risks and opportunities are
identified and managed in a structured, transparent and measurable way.
During the year, we have continued to make progress in identifying, managing
and mitigating material climate related risks and opportunities, and this is
reflected in our enhanced CDP score, which improved from a ‘C’ to a ‘B’ in
2023. In addition, our determination to provide decision-makers with consistent,
comprehensive, standardised information, was underlined by our participation
in a trial, funded by Innovate UK, the UK Innovation Agency, to leverage cutting-
edge AI technology, to improve our FY25 environmental reporting and support
the achievement of sustainability goals.
We are committed to reducing absolute Scope 1 and 2 greenhouse gas (GHG)
emissions by 50% by 2030 from a FY20 baseline. We also commit to reducing
absolute Scope 3 GHG emissions by 42% within the same timeframe. These
near-term targets are aligned to a 1.5°C trajectory and have been verified by the
Science Based Targets initiative (SBTi).
In September 2023, we cemented our commitment to caring for our planet, by
linking our existing loan facility to the achievement of our science-based
emissions reductions targets (SBTs). This provides us with a clearly defined
pathway to reduce GHG emissions, help prevent the worst impacts of climate
change and future-proof business growth.
We continue to engage strategic brand partners and other suppliers with our
climate goals, and in December 2023, Rolex published their commitment to
supporting partners in their sustainability efforts and ensuring transparency and
exemplary conduct across their entire value chain.
COMPLIANCE STATEMENT
In meeting the requirements of the Listing Rules 14.3.27 R we have concluded
that we fully aligned with the TCFD reporting recommendations for the
accounting period ending 28 April 2024. In addition, the Group complies with
the UK Government’s Climate-Related Financial Disclosure (CFD) regulations.
In the table below we set out details of the TCFD reporting recommendations
against the eleven disclosure requirements and the CFD disclosure requirements.
In assessing our alignment, we referenced the guidance documents referred
toin the Listing Rules guidance notes, taking into account the 2021 TCFD all
sector guidance.
TASK FORCE ON CLIMATE
RELATED FINANCIAL DISCLOSURES
TCFD disclosure CFD requirements Summary of disclosure More information
GOVERNANCE
Describe the
Board’s oversight
of climate related
risks and
opportunities
Describe the
company’s governance
arrangements in
relation to assessing
and managing climate
related risks and
opportunities
The Board, led by the Chair, Ian Carter, has overall responsibility for managing climate-
related risks, as well as ensuring our strategy creates value and achieves our Purpose: to
WOW our clients, while caring for our colleagues, our communities and our planet.
Our Board considers climate related issues when reviewing and guiding our strategy,
setting business performance objectives and agreeing annual budgets, including major
capital expenditures, such as the roll out and maintenance of new HVAC systems across
all showrooms.
The ESG Committee, chaired by Independent Non-Executive Director, Baroness (Rosa)
Monckton MBE, meets at least three times a year and addresses climate related issues. As
a Board Committee, it ensures our main Board has supporting information and context
when making strategic decisions in relation to key climate related issues. Such issues are
officially reported to the main Board as and when key decisions are required, for example,
the approval of our ESG Strategy, associated targets and supporting documents, such as
our Environment Policy, Vendor Code of Conduct and ESG Partner Standards.
The ESG Committee monitors performance against climate related goals and targets,
using frameworks such as the CDP questionnaire on climate change, and challenges our
ESG Steering Group on progress. The Committee also ensures the Group has an effective
risk management system in place, with key climate related risks being principally governed
between both our ESG Committee and Audit & Risk Committee, which meets on a
quarterly basis.
Climate
Governance
Framework
onpage 110
Principal Risks and
Uncertainties on
pages 130 to 138
10 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
TCFD disclosure CFD requirements Summary of disclosure More information
GOVERNANCE
Describe
management’s role
in assessing and
managing climate
related risks and
opportunities
Describe the
company’s governance
arrangements in
relation to assessing
and managing
climate-related risks
and opportunities
Brian Duffy, CEO, has overall operational responsibility for our Climate Strategy and the
mitigation of related risks.
Anders Romberg, CFO, has day-to-day operational responsibility for identifying and
addressing climate related risks and opportunities and chairs a monthly ESG Steering Group.
This Steering Group reports into the ESG Committee and is comprised of senior leaders
who each have responsibility for assessing and managing climate related risks and
opportunities against KPIs aligned to our ESG Pillars of ‘People, Planet and Product’.
The ESG Steering Group is advised by Kesah Trowell, Head of Sustainability and ESG, who
has significant experience in climate related matters. It ensures all operational matters in
respect to our ESG Strategy are fully embedded into our wider business strategy and
operation, through weekly engagement with our Trading Board and ad hoc, as required.
Our Finance Team also plays a key role in ensuring climate related risks and opportunities
are embedded into our core business strategy, by making sure they are considered within
our budget planning and approval processes.
Climate related issues are monitored by the Audit & Risk Committee as part of the review
of principal and emerging risks.
Each ESG pillar is supported by Working Groups, who also have a responsibility for
identifying climate related risks and opportunities. Our Working Groups include senior
operational managers who are assisted by input from the Head of Sustainability and ESG
and external consultants. These Working Groups meet every four to six weeks and are
chaired by specialist ESG Steering Group members.
Our Planet Working Group has responsibility for developing and implementing the
Group’s Climate Strategy, which includes reducing Scope 1 and 2 carbon emissions
resulting from buildings and logistics, energy and waste management.
Our Product Working Group is responsible for developing and executing our Supply
Chain Engagement Strategy, including managing the environmental and ethical impacts of
products within our value chain, such as the impact of raw material extraction,
manufacturing, packaging and transportation.
Each Working Group has joint responsibility for reducing Scope 3 emissions.
ESG Governance
on page 71
Climate
Governance
Framework
onpage 110
STRATEGY
Describe the
climate related
risks and
opportunities
theorganisation
has identified over
the short, medium,
and longterm
Description of
1)theprincipal climate
related risks and
opportunities arising
in connection with the
company’s operations,
and 2)the time
periods by reference
to which those risks
and opportunities
areassessed
We consider climate related risks and opportunities across the short (<5 years), medium
(5-10 years) and long-term (>10 years) and these time horizons were considered according
to our sector, the life span of our assets, the type of the climate related risks and
opportunities we face and the geographies in which we operate.
The severity of the impacts we experience is determined by the extent to which the world
warms. We therefore considered potential impacts for possible scenarios:
• 1.5°C above pre-industrial levels, in line with what the latest climate science says is necessary
to avoid the worst physical impacts of climate change with increased transition risk
• Below 2°C above pre-industrial levels, in line with gradually increasing stringency of
climate policy to limit the physical impacts of climate change
• 2-3°C disorderly transition above pre-industrial levels, where the transition to a
low-carbon economy is delayed increasing the risk associated with the transition
• 4°C above pre-industrial levels, which is our current warming pathway if the world
does not take climate action, potentially exposing us to the most extreme physical
impacts of climate change
We consider risks in terms of both impact and probability. Impact refers to the severity of the
consequences that may arise from a risk event, while probability refers to the likelihood or chance
of the risk event occurring within the considered climate scenarios. Likelihood is dependent on
the scenario considered and is determined through the outputs of the scenario modelling.
Assumptions
canbe found
onpage 112
Financial
boundaries can be
found on page 111
107
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
TCFD disclosure CFD requirements Summary of disclosure More information
Describe the
impact of climate
related risks and
opportunities on
the organisation’s
businesses,
strategy, and
financial planning
Description of
theactual and
potential impacts of
the principal climate
related risks and
opportunities on the
company’s business
model and strategy
Following a strategic review, we assigned financial impacts to identified climate related risks
and opportunities, before integrating them into our budget and long-range planning
process.
Our strategic review process also focused on target setting and issues such as energy
efficiency and supply chain transparency, resulting in them being incorporated into our
long-term strategy and standard business processes.
Strategic opportunities progressed so far include future proofing our Support Centres,
and in FY25 we will invest in strengthening our procurement and supply chain management
functions to further improve supply chain engagement.
We have assessed the potential impacts of identified climate related risks on key suppliers
and assigned final risk scores based on:
– Exposure to the hazard, derived through modelling the likelihood of the hazard in low
and high-carbon scenarios
– Vulnerability, assessing the potential impact of the hazard and mitigation actions through
interviews and discussions with internal stakeholders and key suppliers
The table on pages 114 to 117 includes identified high-rated risks. All identified climate
related risks and opportunities were publicly disclosed within our response to the 2023
CDP questionnaire on climate change.
Pages 114 to 117
Describe the
resilience of the
organisation’s
strategy, taking
into consideration
different climate
related scenarios,
including a 2°C or
lower scenario
An analysis of the
resilience of the
company’s business
model and strategy,
taking into
consideration different
climate-related
scenarios
The Group recognises the importance of taking steps to ensure our assets and business
strategy are resilient to the inevitable effects of a changing climate.
To test the robustness of our business strategy, we conducted a qualitative and quantitative
climate scenario analysis of our business operation in FY22 and on our supply chain in
FY23, considering an orderly (1.5°C and 2°C), disorderly (2-3°C) and business-as-usual
(4°C) scenario up to 2050. This analysis enabled us to identify key climate related risks and
opportunities faced by the Group and understand where in our operations we may be
vulnerable. These risks are reviewed on an annual basis.
As a result of our analysis, we have enhanced our business processes, for example, we
assess climate related risks when negotiating leases and our procurement process asks
suppliers to set carbon reduction targets and encourages them to aspire to the objectives
of the Paris Climate Agreement to limit global warming to 1.5°C.
Pages 112 to 113
RISK MANAGEMENT
Describe the
organisation’s
processes for
identifying and
assessing climate
related risks
Description of howthe
company identifies,
assesses, and manages
climate related risks
and opportunities
Our climate related risks and opportunities sit within detailed risk classification frameworks.
The Group defines risk as uncertainty around the organisation’s ability to achieve its
objectives and execute its strategy effectively. As we consider climate change as a principal
risk, related risks are identified and assessed following the same established framework as
other significant risks impacting the business.
Stakeholder consultation and qualitative climate scenario analysis are used, as well as an
analysis of existing and emerging regulatory requirements, to identify key physical and
transition climate related risks and opportunities affecting our business operation.
We also carried out a mapping exercise of our supply chain, followed by a quantitative
Climate Scenario Analysis (CSA) and a series of workshops with internal and external
stakeholders, to identify, manage and mitigate climate related supply chain risks.
Climate risks are monitored on an ongoing basis, allowing us to identify any changes and
make the necessary adaptations.
Climate Risk
Management
Process on pages
132 to 133
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
continued
10 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
TCFD disclosure CFD requirements Summary of disclosure More information
Describe the
organisation’s
processes for
managing climate
related risks
Description of how
the company
identifies, assesses,
and manages climate
related risks and
opportunities
We take the necessary mitigation or adaptation actions to prepare for identified climate
related risks, depending on the severity of the risk. Similarly, where opportunities associated
with physical or transitional risks are identified, we work to leverage them.
The Group has embedded a robust risk management process across all principal risks.
Identified risks are incorporated into our Group risk register and risks classified as major
or severe are escalated to the Board, whereas minor and moderate risks are handled by
the appropriate committee or risk owners.
Principal Risks and
Uncertainties on
pages 134 to 139
Describe how
processes for
identifying, assessing,
and managing
climate related risks
are integrated into
the organisation’s
overall risk
management
Description of how
processes for
identifying, assessing,
and managing climate
related risks are
integrated into the
company’s overall risk
management process
The Group identifies, assesses, and manages climate change as a principal risk through our
overall risk management approach.
We consider climate related risks and opportunities using the TCFD categories, which
cover transition risks (political and legal, market, technology and reputation), and physical
risks (acute and chronic), as well as opportunities posed by a transition to a low-carbon
economy (resource efficiency, energy source, products and services, market opportunity).
Identified risks are mitigated through our established risk management process.
Climate Risk
Management
Process on
pages132 to 133
METRICS AND TARGETS
Disclose the
metrics used by
the organisation to
assess climate
related risks and
opportunities in
line with its
strategy and risk
management
process
KPIs used to assess
progress of targets
used to manage
climate-related risks
and realise climate-
related opportunities
anda description of
the calculations on
which those key
performance
indicators are based
We have mapped our supply chain risks identified in our quantitative CSA to metrics,
which allow us to track our progress managing these risks.
During a workshop with internal stakeholders, we reviewed and approved additional
metrics to monitor our supply chain risks such as extreme weather events, extraction of
raw materials, introduction of carbon prices and electric vehicle legal requirements.
The Group has collected data against these metrics and assigned responsible data owners
to monitor them in line with our strategy and risk management process.
Metrics and
Targets on
page119
Disclose Scope 1,
Scope 2, and, if
appropriate, Scope
3 greenhouse gas
(GHG) emissions,
and the related risks
N/A The Group reports Scope 1, 2 and 3 GHG emissions, which are calculated in line with
the GHG Protocol methodology. Our figures are externally assured and reported over
a three-year period within our Annual Report and Accounts. The methodologies used
to calculate our metrics are also reported. As well as the absolute figure, we report our
intensity ratios, which allow us to understand the impact of our growing business.
GHG Emissions
on page 121
Describe the targets
used by the
organisation to
manage climate
related risks and
opportunities
andperformance
against targets
Description
targetsusedby the
company to manage
climate-related
risksandto realise
climate-related
opportunities
and of performance
against those targets
Our emissions reduction targets to achieve net-zero GHG emissions by 2050 in line
with a 1.5°C trajectory have been validated by the SBTi. The Group commits to reduce
absolute Scope 1 and 2 GHG emissions 50% by 2030 from a FY20 baseline. The Group
also commits to reduce absolute Scope 3 GHG emissions 42% within the same time
frame. These targets are underpinned by a series of goals to help us manage risks and
opportunities and these are reported on pages 96 to 99.
Metrics and
Targets on
page119
10 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
GOVERNANCE OF CLIMATE RELATED RISKS AND OPPORTUNITIES
As part of our continual improvement and in acknowledgement of the serious threat posed by climate change, we regularly review our processes to ensure the
management of climate related risks and opportunities is optimised across our Group and value chain. The Board, led by Ian Carter, has overall responsibility for
climate related issues and stays informed on current best practice in climate governance by maintaining dialogue with peers, policy makers, investors and other key
stakeholders and works to ensure material climate related risks, opportunities and strategic decisions are transparently reported to stakeholders.
The CEO, Brian Duffy, has overall operational responsibility for our climate strategy, including the mitigation of climate related risks and leveraging opportunities
identified as a result of a changing climate. Climate related risks and opportunities identified over the short, medium and long term are presented to the Audit &
Risk Committee and ESG Committee on an ongoing basis by key representatives from our ESG steering group.
This process ensures materiality is properly assessed at varying levels of our business and the appropriate action is taken. The below governance framework is in
place to ensure climate related risks and opportunities are understood, managed, and regularly reported, and that they are integrated into the Group’s core business
strategy, risk management processes and investment decisions.
Overall responsibility for climate-related policy, mitigation of key climate related risks and leveraging opportunities
Chaired by Ian Carter and attended by CEO Brian Duffy
BOARD
AUDIT & RISK COMMITTEEESG COMMITTEE
– Chaired by Non-Executive Director, Baroness
(Rosa) Monckton MBE
– Approves Climate Strategy and related targets
– Reviews progress against set targets
– Reviews key climate related risks and opportunities
– Oversees mitigation strategies
– Ensures appropriate action to meet goals and KPIs
– Ensures adequate resource and funding is inplace.
– Chaired by Non-Executive Director, Robert
Moorhead
– Considers climate related risks as part of the
review of principal and emerging risks
– Oversees compliance and progress on reporting
– Reviews internal controls and provides
accountability
ALL COLLEAGUES
Help achieve goals and feed back areas for improvement
TRADING BOARD ESG STEERING GROUP
– Chaired by CFO, Anders Romberg
– Defines climate related goals, targets and KPIs over short, medium and
long-term and monitors progress
– Ensures actions to manage identified climate risks and opportunities are
embedded into Group risk management processes, core business strategy
and financial decision-making
– Chaired by CEO, Brian Duffy
– Agrees environmental goals, targets and KPIs
– Embeds actions to manage climate related risks and opportunities into core
business strategy
PRODUCT WORKING GROUP
– Led by Eric Macaire, Executive Director Global Buying and Merchandising
– Supports delivery of actions to meet goals and targets
– Identifies opportunities to collaborate across the value chain to increase
climate resilience and create shared value
– Advocates climate resilience for our industry
PLANET WORKING GROUP
– Led by CFO, Anders Romberg
– Supports delivery of actions to meet goals and targets
– Identifies opportunities to increase climate resilience and leverage
opportunities and assesses how they impact the business and value chain in
the short, medium and long-term
– Champions positive behaviour changes
– Embeds climate change culture and mindset
KEY COLLEAGUE LEADS & EXPERTS
– Coordinated by Kesah Trowell, Head of
Sustainability and ESG
– Identifies climate related risks and opportunities
and assesses how they impact the business and
value chain in the short, medium and long-term
– Develops action plans to deliver environmental
targets, and tracks progress against targets
– Establishes and reviews effective mitigation and
controls to manage climate risks
– Day-to-day delivery of climate goals and
management of climate related risks and
opportunities
REMUNERATION COMMITTEE
– Chaired by Non-Executive Director, Tea Colaianni
– Considers climate related targets when
determining the ESG underpin related to the
Group annual bonus
– Ensures incentive framework motivates
colleagues
– Renews and approves performance measures
for bonus to align with strategic objectives
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
continued
11 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
STRATEGY
The Group considers climate change to be a principal risk and as such, our
approach to mitigating and managing climate-relate risks and leveraging
opportunities is incorporated into our core business strategy and operation.
We use the following time horizons across the short, medium, and long-term,
which are agreed by the Board and in line with time horizons used when
considering wider strategic and business planning.
Impact time horizon Year from Year to Duration
Short term FY25 FY29 <5 years
Medium term FY30 FY34 5-10 years
Long-term FY35 FY35+ >10 years
The timeframes were defined according to the retail sector and the nature of the
climate related risks we face, such as physical risks, ensuring business continuity,
changing consumer preferences, regulatory changes and reputation. We also
considered the long lifespan of our assets, our infrastructure and the geographies
in which we operate.
Our risk classification scoring is as follows:
Financial impact EBIT impact Probability
1 Negligible < 1% of EBIT Rare
2 Minor 1-5% of EBIT Unlikely
3 Moderate 5-10% of EBIT Moderate
4 Major 10-20% of EBIT Likely
5 Severe > 20% of EBIT Almost certain
The financial impact of a risk includes any potential control and mitigation costs
incurred to manage the risk and the cost of repair/replacement programmes or
loss of revenue if the risk were to be realised.
Risks Opportunities
Climate related risks
and opportunities
identified during a
CSAof our business
operations
Extreme weather
events disrupting key
sites and IT systems
Energy efficiency initiatives
across our property
portfolio and introduction
ofUninterruptable Power
Supplies (UPS)
Increased energy
requirements
Procuring renewable energy
Changing consumer
preferences
Promoting the longevity
ofwell-made watches and
jewellery, along with our
pre-owned and repairs
offerings
A further identified risk in relation to the ‘Legal requirement for an electric or
alternative fuel fleet in the UK has been declassified, following the UK
Government’s decision in December 2023 to extend trade rules on electric
vehicles until the end of 2035.
Our Climate Scenario Analysis considered the following scenarios using data from publicly available third-party sources, Network for Greening the Financial System
(NGFS) and IPCC Shared Socioeconomic Pathways:
Scenario Transition scenario Physical scenario
1.5ºC
– Rapid transition to a global low-carbon economy
– Unified regulations and ambitious climate policies are implemented immediately and smoothly
NGFS net-zero GHG
emissions by 2050
Not considered*
Below 2ºC
– Steady transition to a global low-carbon economy
– Required by the TCFD recommendations
– Aligns with the Group’s net-zero GHG emissions target
NGFS below 2 degrees IPCC SSP1 RCP2.6
2-3ºC disorderly transition
– Delayed and disorderly transition leading to notable transition and physical impacts
NGFS delayed transition IPCC SSP2 RCP4.5
4ºC
– Business-as-usual emissions
– Assumes climate inaction
– No additional policies are implemented to address the climate agenda and temperatures rise to 4°C
above pre-industrial levels
NGFS current policies IPCC SSP5 RCP8.5
*Below 2°C scenario has been used which is also a low-carbon scenario.
111
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Assumptions and estimates included within the qualitative and quantitative CSA are shown in the below tables:
QUALITATIVE CLIMATE SCENARIO ANALYSIS
Physical risks
Flooding and wind – Flood events are assumed to only impact the floor the Group occupies. Each floor is assumed to be 3m (10 ft) high
– For the UK, fluvial/river flooding is the dominant form of flooding
– For Florida in the US, fluvial flooding dominates in the lower return periods, whilst coastal flooding driven by
hurricanes dominates in the higher return periods
– Stock, fixtures and fittings and IT equipment values have been taken at their net book value
– Group sites and assets are assumed to be static to isolate the climate signal from extreme weather events
Heating and cooling (changing
energy costs)
– Proportion of energy used at all showrooms by heating and cooling is constant
– Energy consumption remains constant over time to isolate the climatic signal
Transition risks
Carbon pricing on Scope 1
and Scope 2 emissions
– NGFS carbon price data taken to be applied to all Scope 1 and Scope 2 operational emissions
– Carbon price is applied in replacement of the Climate Change Levy (CCL) from 2020 onwards, which could result
incost savings
QUANTITATIVE CLIMATE SCENARIO ANALYSIS
Transition risks
Carbon pricing exposure – 2°C scenario assumes that a carbon price is applied uniformly across all countries
– Stainless steel was selected as the material of focus since it is the largest single material in quantity in a wristwatch
– We estimated that the content of stainless steel per wristwatch is approximately 100g
– We calculated the carbon footprint of a watch based on the estimated emissions associated with the production of
stainless steel
– We assumed that the stainless steel used in the production of the watches is imported into the European Union to
be further transformed
Following our qualitative CSA, we conducted a quantitative CSA for our direct operations to quantify the potential financial impact, as well as other business
impacts, such as consumer sentiment and impacts to our value chain in relation to key risks.
Additionally, the assessment allowed the Group to identify risk hotspot locations to inform mitigation actions. The following physical risks were analysed in the
quantitative CSA:
– Extreme weather events disrupting offices and distribution centres
– Increased office and showroom energy requirements for heating and cooling
To assess the exposure of our sites to extreme weather events and increased energy requirements for heating and cooling, we considered the following indicators:
– Fluvial flooding
– Hurricane flooding
– Days exceeding 35°C and 38°C
– Cooling degree days (the sum of the number of degrees that a day’s average temperature is above 18°C)
– Heating degree days (the sum of the temperature increment between the day’s average temperature and 18°C and the number of days this occurs)
– Wind speed
The key findings have enabled the Group to identify climate related risk areas within our operations and implement adaptive measures as described in the risk table
on pages 114 to 117, allowing us to strengthen the resilience of our strategy to climate related risks and opportunities.
The impact of carbon pricing on energy consumption and direct emissions was also considered. Although this risk was identified as a medium risk in the qualitative
CSA, further assessment showed a low risk.
In FY24, key decision-makers participated in a workshop, run by external consultants, to understand carbon pricing and its impacts, including how it can help to
identify risks directly linked to our Scope 1 and 2 emissions. The workshop provided an understanding of costs surrounding potential market changes, as well as
policy and technological changes intended to facilitate the transition to a low-carbon economy.
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
continued
112
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
SUPPLY CHAIN ANALYSIS
To discuss, determine and consider climate related risks and opportunities that
could have a material impact within our supply chain, we have engaged with
internal and external stakeholders through a series of workshops.
Key logistics routes, storage sites and warehouses within our supply chain were
identified and the impacts of risks caused by the identified hazards were assessed
in both a low-carbon and high-carbon scenario up to 2040.
Risks Opportunities
Climate related risks
identified during a
mapping exercise
and CSA ofour
supply chain
Extreme weather events
disrupting logistics, caused by
hazards including:
– Extreme precipitation at two
logistics sites in the UK
– Extreme heat at one logistics
site in the US
– Cyclones and hurricanes at
one logistic site in the US
Improve business
continuity and planning
– Raw material extraction
(minerals and agriculture)
disrupted
– Extreme heat at a stainless-
steel mining location in China
Build climate related
clauses into relevant
contracts
Introduction of carbon pricing
The results of our supply chain quantitative CSA have highlighted the robustness
and resilience of the Group’s supply chain management when faced with value
chain climate related risk, in both a low and high-carbon scenario, and we have
found that the overall impact to the Group’s operations is low for the risks
analysed so far.
From a logistics perspective, the Group has flexibility to work with various
suppliers across all geographies it operates within, in order to fulfil door-to-door
deliveries and web orders should one supplier be impacted by potential climate
risks. In the UK, this includes leveraging a relationship with an alternate logistics
partner to fulfil deliveries directly to showrooms should a supplier be impacted
by a climate related risk. Past global events such as the pandemic, where the
Group’s operations were not significantly impacted, have demonstrated the
resilience of our logistics operations and ability to adapt to change.
From a financial perspective there would be little to no impact in either scenario
due to the ability to swiftly switch suppliers, which is built into our business
continuity plan. This has also been considered in the budget timelines looking
ahead 12 months and the Long Range Plan to FY28. In some instances, switching
logistics partners would result in a cost saving, due to the premium delivery
services of one of our suppliers.
Our analysis found that the Group’s own suppliers have well-established climate
risk mitigation actions in place.
Engagement with a key supplier is in progress to assess their risk exposure
against extreme heat in sourcing locations and the risk of carbon pricing on
stainless steel. Finalising the assessment will allow the Group to understand the
vulnerability scores to both climate hazards.
In FY25, to support further supply chain engagement, the Group has plans to
enhance our procurement and supply chain management capability and leverage
machine learning technology to improve the quality of our Scope 3 emissions
data and reporting.
We continue to explore these risks and opportunities in further detail, integrating
the analysis further into our business strategy and risk management processes as
well as focusing on developing longer-term climate mitigation and adaptation
planning such as reducing carbon emissions and adjusting to the current and
future effects of climate change.
CLIMATE RELATED RISKS
Our commitment to reach net-zero GHG emissions and manage emerging risks
associated with extreme weather and increasing temperatures presents physical
and transitional risks, as well as opportunities, to our business.
Risks are prioritised using impact ratings of Low, Medium, or High, and are
determined by combining the likelihood of the risk arising, with the potential
impact of the risk, should it happen. This impact scoring is in line with the Group’s
risk register where the materiality of each risk is considered.
We consider risks and opportunities using the TCFD categories, which cover
transition risks (political and legal, market, technology and reputation) and
physical risks (acute and chronic), as well as opportunities presented within the
transition to a low-carbon economy (resource efficiency, energy source,
products and services and market opportunity).
When assessing risks, we consider all our geographies. We have a relatively small
number of operational sites (offices, showrooms and distribution centres) across
the UK, US and Europe, however, risks are likely to vary across different regions
and site types.
The process for identifying and assessing climate related risks and opportunities
is set out in our Climate Governance framework on page 110. The risks could
potentially result in changes to the demand for our products, our operational
costs, the regulatory environment, and present a physical risk to our operational
sites in addition to supply chain risks. The risks are composed of a combination
of interrelated elements that could impact the Group.
The following table on pages 114 to 117 includes all High rated risks we have
identified pre-mitigation, which is where we are focusing our adaptive initiatives.
While Medium or Low risks considered are not reported in this table, all
identified risks are publicly disclosed within our annual response to the CDP
questionnaire on climate change. All identified climate related risks and
opportunities are reviewed bi-annually.
While all risks below have been rated as High, more significant impacts will be
experienced for climate related physical risks under higher warming scenarios
4°C whereas the impacts of transition risks will be more significant under lower
warming scenarios.
To achieve our emissions reduction targets, active holistic management of all
climate related risk components is important. Emission reduction pathways
consider the direct and supply chain impacts on biodiversity and the impact that
the changing climate may have on the viability of initiative selection.
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HIGH CLIMATE RELATED RISKS RELATED TO OUR DIRECT OPERATIONS
Risk type Risk category Scenario
Time horizon
Short Medium Long
ACUTE PHYSICAL
Cyclone, hurricane, typhoon
Physical <2°C
4°C
DETAIL
In the US (particularly Florida) hurricanes are an annual
occurrence which could disrupt the ability to receive products
and distribute them around the country.
MITIGATION
We have insurance policies in place to cover financial losses,
either partially or fully and based on international spread and our
showroom presence. Physical controls are also in place. Suppliers
are able to send products directly to showrooms.
Magnitude of
impact: post-
mitigation
Minor
Likelihood of
impact: post-
mitigation
Likely
Financial
impact:
1-5% of
EBIT
ACUTE PHYSICAL
Flood (coastal, fluvial, pluvial, groundwater)
Physical <2°C
4°C
DETAIL
Increased extreme rainfall could lead to flash flooding and
increased fluvial flooding.
Specific considerations made in relation to pluvial flooding at key
distribution locations.
MITIGATION
Showrooms are generally leased for <10 years, so this has not
been identified as a material ‘stranded assets’ risk linked to gradual
sea-level rise.
As leases expire, we carry out a case-by-case review and have the
option of relocating showrooms to areas with less risk.
Risk assessments carried out at key distribution locations indicated
a low risk with supplier ability to send products directly to
showrooms if required.
Magnitude of
impact: post-
mitigation
Minor
Likelihood of
impact: post-
mitigation
Likely
Financial
impact:
1-5% of
EBIT
CHRONIC PHYSICAL
Changing temperature
Physical <2°C
4°C
DETAIL
A changing climate and extreme weather events are likely to
increase energy consumption associated with heating and cooling.
There is also an increased risk of energy blackouts.
MITIGATION
Continued engagement with landlords to ensure the most up to
date and efficient energy processes are in place.
Investment in the most efficient and reliable HVAC systems which
are regularly serviced.
Temperatures are set and HVAC systems automatically switch off
when colleagues leave the premises at night.
We have uninterruptable power supplies in place to allow
computers to keep running if energy flow is disrupted, along with
battery storage solutions.
Magnitude of
impact: post-
mitigation
Negligible
Likelihood of
impact: post-
mitigation
Moderate
Financial
impact:
<1% EBIT
* 1.5ºC scenario reported in our FY23 disclosure has been corrected to reflect the analysis undertaken
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
HIGH CLIMATE RELATED RISKS RELATED TO OUR DIRECT OPERATIONS
Risk type Risk category Scenario
Time horizon
Short Medium Long
LEGISLATIVE
Cost of non-compliance with environmental legislation
Adaptation and mitigation activities
Transition n/a
DETAIL
Head of Sustainability and ESG, along with governance structure
and technology in place to ensure the Group is compliant.
MITIGATION
The cost of non-compliance would be significant, however,
regulatory requirements are closely monitored by our Head of
Sustainability and ESG and are supported by strong governance
processes. External expertise is used as required when opening
showrooms in new jurisdictions.
We will be trialling AI to provide real-time monitoring of
environmental legislation and to highlight gaps in the Group’s
business strategy and reporting for timely consideration and action
through our governance structure.
Magnitude of
impact: post-
mitigation
Negligible
Likelihood of
impact: post-
mitigation
Unlikely
Financial
impact:
<1% EBIT
LEGISLATIVE
Cost of compliance with environmental legislation
Transition n/a
DETAIL
Governance structures in place to assess the cost of compliance
with environmental legislation and ensure it is factored into our
budgeting cycles where necessary.
MITIGATION
While the Group considers compliance with environmental
legislation non-negotiable, in FY25 we will strengthen our
procurement function to ensure that we partner with suppliers
that adhere to our ESG Partner Standards and deliver the best
value for money.
Magnitude of
impact: post-
mitigation
Negligible
Likelihood of
impact: post-
mitigation
Likely
Financial
impact:
<1% EBIT
11 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
HIGH CLIMATE RELATED RISKS RELATED TO OUR DIRECT OPERATIONS
Risk type Risk category Scenario
Time horizon
Short Medium Long
ACUTE PHYSICAL
Extreme heat
Logistics Hub, Memphis, Tennessee (third-party)
Physical <2°C
4°C
DETAIL
Flexibility and ease of switching logistics partners in case of outage
is built into our business continuity plan.
Due to the nature of our product, delays at third-party
distribution centres would not have a significant impact on our
operations as the Group has strong client relationships and
communications in place for such delays.
MITIGATION
The third-party site has implemented various mitigation actions to
limit disruption from extreme heat following a critical incident
involving a worker, including the deployment of tower breezers,
water fountains, ice machines and the frequent distribution of
water bottles to workers.
A new building is under construction that can withstand extreme
heat and maintain a constant working temperature of 50-80°F.
The hub also has the flexibility to transfer items between buildings
to ensure the continuity of deliveries.
Magnitude of
impact: post-
mitigation
Negligible
Likelihood of
impact: post-
mitigation
Likely
Financial
impact:
1-5% of
EBIT
REPUTATION
Expectations for responsible conduct from stakeholders, including
investors, lenders and clients
Transition n/a
DETAIL
Expectations for responsible conduct from stakeholders, including
investors, lenders and clients.
MITIGATION
– Growth of our pre-owned business
– Our goal is to achieve full traceability of products in line with our
ESG Partner Standards
– Supplier partners must agree with the terms of our Vendor Code
of Conduct, or have its own equivalent, and comply with all
international laws and regulations
– We conduct third-party on-site audits to help us to safeguard the
integrity and reputation of our business operation and partnerships
– We have begun to highlight the sustainable attributes of the products
we sell and services we offer, and in February 2024, launched
client-facing sustainability pages across our ecommerce platforms
Magnitude of
impact: post-
mitigation
Negligible
Likelihood of
impact: post-
mitigation
Likely
Financial
impact:
<1% EBIT
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
continued
11 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
CLIMATE RELATED OPPORTUNITIES
While we recognise these risks, the opportunity around the transition to a low-carbon economy is also significant. Key opportunities identified during our qualitative
CSA are detailed below:
Opportunity Risk category Type
Time horizon
Short Medium Long
DOWNSTREAM
Marketing on the prolonged lifetime of watches
and jewellery to encourage clients to retain and
repair watches and jewellery instead of disposing
of them
High
Transition
Products and
services
DETAIL
Marketing to retain and repair products instead
ofdisposing of them.
Financial planning
considerations
10-20% of EBIT
Explanation of financial impact figure
– To realise this opportunity, we are committed to promoting the
more sustainable attributes of the products we sell and services we
offer, including repairs and servicing
– We have increased our repairs and servicing capacity to include a
new 6,000 sq. ft Repairs and Servicing Centre in the UK to provide
additional repairs and servicing support for strategic brand partners
– We have launched a new Rolex Certified Pre-Owned business in
the UK and US and promote the sale of pre-owned watches in the
UK and US through our Analog:Shift business
– We continue to grow our team of highly skilled and accredited
watchmakers to work in our repairs and servicing centres
– We are supporting new watchmakers through apprenticeships and
sponsorships, including a new partnership with the AHCI
DIRECT OPERATIONS
Energy efficiencies in showrooms, offices and
distribution centres and use of renewable energy
in showrooms and offices
High
Transition
Energy source
and resource
efficiency
DETAIL
Use of lower-emission sources of energy.
Financial planning
considerations
<1% of EBIT
Explanation of financial impact figure
– In line with our energy strategy, 100% of UK showrooms within
our control are powered by renewable electricity with Renewable
Energy Guarantees of Origin (REGOs)
– At the time of this report, we are working to secure Renewable
Energy Certificates (RECs) for our US properties
– 81% of properties across our Group use LED lighting and this is
standard in all new properties
– We have installed a Variable Flow System (VRF) with heat pumps in
Carlton Park Support Centre
– We have been given permission by our landlord to install solar
panels on Carlton Park Support Centre roof
SUPPLY CHAIN
Proactive collaboration with suppliers to reduce
energy
High
Transition
Resource
efficiency
DETAIL
Use of lower-emission sources of energy.
Financial planning
considerations
<1% of EBIT
Explanation of financial impact figure
To realise this opportunity, we are engaging with our suppliers to
identify the most energy intensive areas of our business. We are
also improving our energy management system, which will help us
to reduce energy consumption and therefore carbon emissions.
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CLIMATE RISK MANAGEMENT
The Group defines risk as uncertainty around the ability to achieve its objectives
and execute its strategy effectively. We consider climate change as a principal risk
to better manage associated risks and opportunities.
The Group has embedded a robust risk management process across all principal
risks which is outlined on pages 130 to 131. Each business function informs the
Director of Risk and Audit of relevant risks, who then informs the Risk and Audit
& Risk Committee and Board.
Our risk management framework helps identify, assess, manage, and monitor
risks to within the risk appetite set by the Board, while taking advantage of
opportunities as they are presented. Management is responsible for minimising
any adverse exposure to the Group and its stakeholders.
To identify and assess climate related risks within our business operation, we
conducted a qualitative climate scenario analysis and the results are reported
within the strategy section of our TCFD disclosure. The classification of climate
risks identified is outlined in the strategy section of our disclosure and is in line
with the Group’s risk register, with the materiality of each risk being considered.
Our climate risks and opportunities now sit within detailed risk classification
frameworks with financial boundaries. Further details can be found on page 111.
To help us identify, manage and mitigate climate related supply chain risks, we
carried out a mapping exercise, followed by a CSA and series of workshops with
internal and external stakeholders.
In February FY24, as a result of our CDP gap analysis, we invited third-party
consultants to host a workshop to explore carbon pricing, including setting
an internal carbon price. The workshop was a useful exercise, resulting in the
decision not to introduce this mechanism at this time, due to the size of our
business and low Scope 1 and 2 emissions relative to Scope 3.
Climate risks are monitored on an ongoing basis, which allows us to capture any
changes and adapt fluidly.
METRICS AND TARGETS
The Group is committed to achieving net-zero GHG emissions by 2050 and our
near-term emissions reduction target has been verified by the Science Based
Targets initiative (SBTi). Our Scope 3 categories included in our science-based
target are disclosed on page 121.
Public commitments
Near-term SBTs aligned to 1.5°C
under Paris Climate Agreement Net-zero
Scope 1 and 2 50% reduction in absolute
emissions by 2030 from a FY20
base year
2050
Scope 3 42% reduction in absolute
emissions by 2030 from a FY20
base year
The Group responded to the CDP questionnaire on climate change for the
second time in May 2023 and achieved our ambition to improve our initial score
from ‘awareness’ to ‘management’ (C to B). Since receiving our score, we have
carried out a gap analysis to identify areas for further improvement and have
built them into our ESG Strategy.
In September 2023, we reinforced our commitment to climate resilience, by
linking our existing loan facility to the achievement of our near-term science-
based emission reduction targets and circularity goals, and supported a weekly
incentive for all colleagues. For more information about remuneration and our
ESG goals, please see page 161.
We have implemented several emission reduction initiatives across our
operations and value chain as part of our strategy to achieve net-zero GHG
emissions by 2050 which are reported on pages 95 to 99 of this report.
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
continued
11 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
Risk Scope Metrics to monitor risks Targets to monitor risks FY23 FY24 Change
YOY
change
Extreme weather events
disrupting offices and
distribution centres
Group Strategic sites reviewed and
appropriate contingency plans in
place until lease expiry
All properties reviewed for exposure to
extreme weather events*
43% 38% (5)%
Increased energy
requirements
Group % of electricity from renewable
sources
Transition to 100% renewable energy wherever
possible (including landlord energy supplies)
by2025
77% 70% (7)%
Group Number of properties we control
fitted with LED lighting
Transition to 100% LEDs in properties we
control and where installation is financially and
practically viable by 2025*
84% 81% (3)%
Changing consumer
preferences
Group Number of product repairs,
servicing and sales of pre-owned
watches as a percentage of the
number of new watch sales
Year-on-year increase in watches kept in
circulation through repair, servicing and/or
resale, measured by % of new watches sold
44% 46% 2%
Engagement with brand partners
and other suppliers
50% of product suppliers aligned with relevant,
well recognised sustainability standards or
certifications by 2025
35% 44% 9%
% of own brand packaging
recyclable
Own brand packaging fully recyclable by 2030 71% 71% –
The below table summarises the metrics the Group will use to monitor our supply chain risks going forward.
Risk Metrics to monitor risks Targets to monitor risks FY23 FY24 Change Progress
Extreme weather events
disrupting offices and
distribution centres
Monitoring the cost of extreme weather
damage across sites on an annual basis
Annual assessment of costs associated with the
reinsurance of offices and distribution centres
Complete Complete n/a
Raw material extraction
(minerals and agriculture)
disrupted
Keeping watches in circulation through
repairs,servicing and our pre-owned
businessas % of new watches sold
Year-on-year increase in watches kept in
circulation through repair, servicing and/or
resale, measured by % of new watches sold
44% 46% 2%
Carbon price introduced Annual reduction in Scope 1, 2 and 3
intensity metrics**
50% reduction in Scope 1 and 2 emissions
by 2030 from a FY20 baseline
0.0025 0.0028 (0.0003)
42% reduction in Scope 3 emissions
by 2030 from a FY20 baseline
0.110 0 0.1066 0.0034
KEY
Increase No change Missed target
* Missed target as a result of an increased property portfolio in FY24
** More information on pages 94 to 95
11 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
CLIMATE ACTION PROGRESS ROADMAP
The timeline below summarises progress and key steps taken by the Group to ensure potential climate related risks and
opportunities are identified and managed in a structured, transparent and measurable way.
FY21
– ESG Committee established, responsible for
risk identification and management
– Disclosure of our first voluntary TCFD
Annual Report narrative
– Collaboration with an external consultancy to
undertake a TCFD gap analysis to identify
potential gaps against TCFD
recommendations
– Undertook a qualitative and quantitative CSA
of our operation against multiple scenarios
FY22
– Increased climate change to a principal risk
– Board Chair given overall responsibility for
climate related issues
– Measured Scope 3 emissions for the first time
covering FY20, FY21 and FY22
– Committed to setting near-term science-based
targets through the Science Based Targets
initiative (SBTi)
– Scope 1, 2 and 3 emissions externally verified
FY23
– Near-term SBTs (across all Scopes) were
externally verified by the SBTi
– Financial boundaries and planning process
defined
– Responded to CDP questionnaire on
climate change for first time and scored a C
– Provided a CSA education workshop for
key internal stakeholders
– Conducted a quantitative CSA on key
climate related risks across our value chain
– Reviewed the supply chain risks and
associated metrics and targets
– Supply Chain Engagement Strategy initiated
to help manage and mitigate our value
chain emissions
– Continued to implement EcoVadis, to help
manage our value chain emissions
– Embedded ESG into our budgeting and
planning process
FY24
– Improved our CDP score from a C to a B
– Strengthened our approach to risk
management to ensure identified risks are
properly integrated into our business
strategy and risk management processes
– Participated in a project to trial AI to
improve reporting and longer-term climate
mitigation and adaptation planning
– Held a third-party consultant facilitated
workshop to understand the impact of
internal carbon pricing and technological
changes to facilitate the transition to a
low-carbon economy
FY25+
– Set a long-term SBT across all Scopes and apply to the SBTi
– Use our CDP gap analysis to understand and implement areas
for continued improvement
– Purchase Renewable Energy Certificates in the US
– Continue Group LED lighting roll out
– Leverage AI to support supply chain engagement and improve
our Scope 3 emission data
– Renew CSA of our business operations to ensure compliance
with the CFD requirements
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
EMISSIONS TABLE
Global GHG emissions data
FY24 FY23** FY20 baseline**
UK Europe US Total UK Europe US Tot al UK US Total
Scope 1: Direct combustion from owned and
controlled sources (tCO
2
e)
162 – 73 235 133 – 126 259 264 64 328
Scope 2: Indirect emissions from the generation
ofpurchased electricity, heat, steam or cooling
(Location-based) (tCO
2
e)
2,194 29 1,775 3,998 1,687 8 1,912 3,607 2,344 1,456 3,800
Total Gross Scope 1 and 2 (tCO
2
e) 2,356 29 1,848 4,233 1,820 8 2,038 3,866 2,608 1,520 4,128
Total energy consumption associated
with the Scope 1 and 2 emissions (kWh)
11,144, 098 264,590 5,058,515 16,467,203 9,311,919 111,711 5,217,844 14,642,474 10,281,037 3,969,453 14,250,490
Scope 3 emissions
Category 1 – Purchased goods and services
(1)
74,089 880 54,157 129,126 81,088 556 52,917 134,561 63,373 21,977 85,350
Category 2 – Capital goods
(1)
18,754 407 7, 531 26,692 17, 684 1,429 7,608 26,721 6,552 3,698 10,250
Category 3 – Fuel- and energy-related activities
(2)
744 16 417 1,177 619 7 473 1,099 606 392 998
Category 4 – Upstream transportation anddistribution
(1)
838 11 1,120 1,969 877 7 1,695 2,579 704 851 1,555
Category 5 – Waste generated in operations
(3)
8 – 2 10 24 2 8 34 7 – 7
Category 6 – Business travel
* (4)
– – – 2,015 – – – 1,781 – – 917
Category 7 – Colleague commuting
(5)
1,845 918 40 2,803 2,025 23 730 2,778 1,318 426 1,744
Category 11 – Use of sold of products
* (6)
– – – 6 – – – 7 – – 1
Category 12 – End-of-life treatment of sold products
(7)
107 32 1 140 106 – 32 138 70 6 76
Total gross scope 3 (tCO
2
e) 96,385 2,264 63,268 163,938 102,423 2,024 63,464 169,698 72,630 27,350 100,899
Total gross emissions (tCO
2
e) 168,171 173,564 105,027
Emission intensities
FY24 FY23 FY20 baseline**
UK and Europe
US Total UK and Europe US Total UK US Total
Revenue (£'000) 846,043 691,832 1,537,875 889,858 652,928 1,542,786 585,473 225,039 810,512
Scope 1 & 2 Intensity ratio (tCO
2
e per £'000 revenue) 0.0028 0.0027 0.0028 0.0021 0.0031 0.0025 0.0045 0.0068 0.0051
Scope 3 Intensity ratio (tCO
2
e per £'000 revenue)
*
0.1066 0.1100 0.1245
Scope 3 Intensity ratio (tCO
2
e per sq. ft)
*
0.2261 0.2561 0.2037
Total Emissions Intensity Ratio
(tCO
2
e per £'000 revenue)
0.1094 0.1125 0.1296
Total emissions intensity ratio (tCO
2
e per sq. ft) 0.2320 0.2619 0.2121
* Calculated as Group Figure.
** The FY23 and FY20 Baseline Scope 3 figures have been updated
Methodology
The Group’s approach to calculating and reporting its greenhouse gas (GHG) emissions follows the WRI.
WBCSD GHG Protocol Corporate Accounting and Reporting Standards (Revised) on how to measure
and monitor GHG emissions.
Scope 1 and 2 emissions have been reported above where the Group has operational control of a property
or an asset. This includes properties which the Group operates but which are not included a leases within
the Financial Statements on account of the substitution rights the landlords have (as noted within note 1
of the Financial Statements).
The Group uses six external data sources for emissions factors, being:
1. UK Government GHG conversion factors for company reporting (2023 Department for Business,
Energy & Industrial Strategy (BEIS) condensed set, full set and methodology). These are used to convert
our car fleet mileage to kWh and tCO
2
e, and our electricity, gas and refrigerant usage to tCO
2
e.
2. US Environmental Protection Agency (EPA) (eGRID) emissions factors for greenhouse gas inventories
for US electricity generation (eGRID 2023) and US EPA GHG equivalencies calculator to convert
therms to tCO
2
e for gas usage.
3. Manufacturers’ emissions factors for cars, uplifted for the UK real-world factor (2023 BEIS Government
GHG conversion factors for company reporting).
4. European Environment Agency GHG emission intensity for conversion of electricity kWh to tCO
2
e for
Germany, Denmark and Sweden.
5. Sustainable Energy Authority of Ireland conversion factors for conversion of Ireland electricity kWh to tCO
2
e.
6. CEDA (“Comprehensive Environmental Data Archive”) EEIO (Environmentally-Extended Input
Output) purchaser price country specific spend-based emission factors with the exception of cost of
sales expenditure where US producer price emissions factors were used.
All Scope 3 emission calculations follow the guidelines and methodologies that are outlined in the Greenhouse
Gas Protocol. The Greenhouse Gas Protocol is the most widely used greenhouse gas accounting standard. It
provides a framework for businesses and governments to measure and report their greenhouse gas emissions.
Emission Conversion Factors from the BEIS and the EPA have been used. For US operations, emission
factors from the International Energy Agency have also been used for the estimation of emissions relating
to T&D losses See below more information regarding the methodology and data sources that were used
for the Scope 3 calculations.
1. A combination of supplier specific data and spend based emissions factors from Environmentally
Extended Input Output CEDA Global version 6 database have been employed. Refer to page 95 for
more details.
2. Well-To-Tank (WTT) and Transmission and Distribution (T&D) emissions have been calculated using
the BEIS and IEA emission factors for the Group’s electricity, natural gas and fuel used in Company
owned vehicles.
3. Emissions related to the Group’s office and showroom waste disposal activity. Emissions calculations
have taken into consideration % of waste landfilled and % of waste diverted from landfill. BEIS emission
factors have been used.
4. Business travel emission consider emissions relating to Hotel Stays, Flights, Taxi rides as well as Tube/
Rail journeys. A combination of both EEIO spend-based and BEIS emission factors have been used.
5. Colleague commuting and home working emissions have been calculated using EcoAct’s proprietary.
Homeworking emissions Whitepaper (https://info.eco-act.com/en/homeworking-emissions-whitepaper-2020).
6. Emissions that relate to the energy consumed from the Group’s Quartz and Smart watches that
require electricity for the charging of their battery.
7. Emissions relating to the disposal of product packaging. BEIS emission factors are used for UK
operations while EPA factors have been used for US operations. Note – emissions relating to the
disposal of watches and jewellery have been excluded from the calculation as these products are high
in value and they are either repurposed or resold within a 100-year timeframe.
The Scope 1, 2 and 3 emissions and energy consumption data for FY24 have been independently assured
through a limited assurance engagement conducted in accordance with International Standard on
Assurance Engagements (ISAE) 3410 ‘Assurance Engagements on Greenhouse Gas’, by BDO LLP.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
As our business grows and we seek to improve the quality of our emissions data,
it is necessary to rebaseline our GHG emission targets in line with best practice.
The baseline for our metrics is FY20. In line with the Greenhouse Gas Protocol,
the Group will re-baseline these figures in subsequent annual reporting, when
the following occurs: structural changes that affect the inventory boundary (such
as acquisitions or divestments); the methodology for emission calculation
changes (such as improvements in data); and the scope of emissions boundary
changes. A material difference to trigger a re-baselining exercise is returning a
variance of greater than or equal to 5%.
Categories 1, 2 and 4 within Scope 3 of FY20 and FY23 have been restated to
reflect the hybrid reporting approach discussed on page 95. Additionally, the
CEDA emissions factors have been updated to use purchaser price country
specific spend based emissions with the exception of cost of sales expenditure
where US producer price emissions were used. Country-specific purchaser
emissions factors have been used where possible as they represent the unique
country structures of where the service took place. The updates further enhance
the quality of our reported data. FY23 was restated to allow for accurate
comparison to prior year data.
EMISSIONS REBASELINING POLICY
TASK FORCE ON CLIMATE RELATED FINANCIAL DISCLOSURES
continued
Oris is a 120-year-old independent brand out of Holstein, Switzerland. The brand is certified climate and carbon neutral as of 2021 and publishes a sustainability report every year. The brand
is focused on not only making inclusive luxury watches, but also watches focused on conservation and sustainability. Case in point, the Oris X Bracenet Aquis models, which feature dials
made from abandoned ghost fishing nets. Uniquely, the brand organises clean up events on a regular basis globally, bringing collectors, consumers, retailers, and media partners together to
clean up beaches, rivers, streams, and even city streets in the heart of Tokyo.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
OUR PRODUCTS
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
123
The Group is committed to conducting all business in a fair, transparent, socially
responsible and environmentally sustainable way. We expect the same high
standards from our suppliers and throughout our supply chain.
We seek to strengthen relationships with brand partners and other suppliers
who adopt our social and environmental principles and strive to continuously
improve their performance for our mutual, long-term benefit.
Research, design and innovation in products and services is widely encouraged
to help optimise performance and minimise any negative impacts across our
value chain.
OUR BUSINESS IMPACTS
We partner with circa 600 Tier 1 suppliers*, including 115 watch and jewellery
suppliers worldwide.
We acknowledge that the watch and jewellery industry has a risk of human
rights violations within its precious metals, diamonds and gemstones mining
supply chains. There is also the potential for negative environmental impacts as
a result of mining processes.
The Group predominantly operates in countries where high social standards
apply and contracts with reputable supplier partners. We continue to exercise
due diligence in our interactions and our goal is to go beyond basic risk
management and compliance, adhering to our value to ‘do the right thing, always’
and integrate human rights and environmental considerations into decision-
making processes at every level.
*Unique entities classified by spend over £50,000
VENDOR CODE OF CONDUCT
Our Vendor Code of Conduct (Vendor Code) sets out our minimum
requirements across human rights, labour, environment, anti-corruption,
integrity, business ethics, data security and social impact, which must be applied
in addition to compliance with all relevant national and international laws and
legislation. All active suppliers must read, sign and adhere to this Vendor Code,
or publish an equivalent commitment.
Our Vendor Code is aligned with our Purpose and supported by training to
equip colleagues with a responsibility for procuring good and services, as well as
other relevant colleagues, with the knowledge and skills they need to help
uphold the principles of our Vendor Code.
Anyone with genuine suspicions about the contravention of our Vendor Code is
encouraged to report their concerns through our confidential global
whistleblowing process, which uses an independent reporting facility and is
available in multiple languages.
SUPPORTING UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS
RESPONSIBLE SOURCING
FY25 AREAS OF FOCUS
– Enhance our procurement and supply chain management
capability
– Leverage AI technology to streamline business processes
and improve data quality, transparency and disclosure
– Collaborate with brand partners to grow our range of
products with positive environmental and social attributes
– Further promote repairs and pre-owned as a means of
extending product life-cycles
– Advocate for our industry through support of independent
and creative watchmaking organisations, such as Académie
Horlogère des Créateurs Indépendants (AHCI)
FY24 PERFORMANCE HIGHLIGHTS
– Expanded our Group repairs and servicing space by almost
10,000 sq. ft to support circularity of watches and jewellery
– Increased the number of watches repaired, serviced or
resold year-on-year by 2%, measured as a % of new
watchsales
– Scored CDP Supplier Engagement Rating of ‘A-’
– Reviewed our approach to procurement and supply chain
management to strengthen engagement with our ESG
Partner Standards
– 44% of watch and jewellery suppliers aligned with relevant,
well-recognised sustainability standards and/or certifications
– 65+ hours face-to-face Modern Slavery training delivered
The Group is committed to ensuring our supply chain operates responsibly
and that everyone we do business with, respects and protects the lives of
workers, their communities, and the planet.
CARING ABOUT OUR PRODUCTS
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
ESG PARTNER STANDARDS
Our ESG Partner Standards (Standards) support our Vendor Code of Conduct
and provide comprehensive guidance in relation to the common practices we
expect throughout our global supply chain and in all our dealings.
These Standards are designed to help us proactively engage new and existing
supplier partners with our purpose, values and sustainability goals, while
encouraging collaboration and helping to ensure that the products we sell, and
services we use, meet the highest environmental and social standards and
performance criteria.
Our Standards are issued to all existing and potential suppliers, and this document
is also publicly available on our corporate website at thewosgroupplc.com.
They are regularly reviewed and will be refreshed in FY25.
ALIGNMENT WITH RELEVANT, WELL-RECOGNISED CERTIFICATIONS
We strongly encourage all supplier partners to align with relevant, well-
recognised sustainability standards and certifications, which includes the
Responsible Jewellery Council (RJC) for our watch and jewellery providers. The
RJC is a registered not-for-profit company and the world’s largest standards
authority for responsible jewellery.
At the time of this report, 44% of our watch and jewellery suppliers are
accredited members of the RJC and, as such, are subject to rigorous independent
audits to ensure compliance with the RJC’s exacting standards of business
practice. These audits are in addition to our own third-party audit schedule.
We encourage adherence to external initiatives and sets of principles. For
example, seven of our brands are members of the Watch & Jewellery Initiative
2030 (WJI 2030), which aims to support the industry in building climate resilience,
preserving resources and fostering inclusiveness.
As a minimum, WJI 2030 members must commit to setting science-based
carbon reduction targets, develop a roadmap for biodiversity and nature, and
align with International Labour Organization (ILO) core conventions. They must
also commit to becoming a signatory of the Women’s Empowerment Principles
(WEPs) and conduct human rights due diligence in line with the United Nations
Guiding Principles and Organisation for Economic Co-operation and
Development (OECD) Due Diligence Guidance.
HUMAN RIGHTS AND MODERN SLAVERY
Treating people with respect is a fundamental value of the Watches of
Switzerland Group. We take allegations of human rights abuse in all its forms
extremely seriously and will not tolerate human rights abuses against anyone
working for our Group, or against individuals or groups in any way associated
with our business.
We are committed to ensuring nobody involved in the production, distribution
or sale of our products, or delivery of our services, is a victim of any form of
modern slavery or any other form of human rights violation, and have measures
in place to identify, assess and mitigate potential labour and human rights abuses
across our value chain. Our Vendor Code of Conduct includes specific
requirements founded on the conventions of the ILO, which are guided by
international human rights principles and encompassed by the Universal
Declaration of Human Rights.
In FY24, we continued our three-year partnership with Slave-Free Alliance (SFA),
which is an international social enterprise, wholly owned by global anti-slavery
charity ‘Hope for Justice’. The SFA supports our business by reviewing and
assisting in the development of our policies, processes, practices and due
diligence, as well as by enhancing training on human rights and labour standards,
to increase our response to the threats and risks of modern slavery.
In June 2023, the Board approved a new Human Rights Policy and we used
international Anti-Slavery Day in October 2023 to engage colleagues with
the principles of this Policy and build our resilience to modern slavery and
labourexploitation.
In December 2023, key-decision makers and colleagues in roles with an increased
risk of exposure to instances of modern slavery, attended an annual bespoke
training workshop hosted by the SFA, to further expand stakeholder awareness
and develop the capability to react if necessary.
In FY25, we will work with the SFA to develop an online learning module for
colleagues, and further strengthen our procurement and supply chain risk
assessment, and management of due diligence processes.
There have been no violations reported in relation to human rights within our
Group or extended value chains in FY24, however, we remain committed to seeking
out any such disclosures, through continued awareness raising in relation to modern
slavery, human rights, and available reporting and whistleblowing mechanisms.
More information on our commitment and approach to human rights can be
found in our Modern Slavery Statement at thewosgroupplc.com.
DUE DILIGENCE AND FACTORY AUDITS
To manage and monitor supply chain performance and compliance, colleagues
with a responsibility for sourcing are trained to assess environmental and social
risks and identify collaborative opportunities.
We use leading global supply chain management system, EcoVadis, to support
greater transparency and due diligence. The EcoVadis IQ technology helps us
map, monitor and manage sustainability risks within our supply chain using smart
automation and analytics.
Risks are calculated using factors such as the type of goods or service supplied,
geographic location, and criticality to our business and reputation. Partners
deemed ‘High Risk’ may be subject to an on-site independent audit and
Corrective Action Plan.
On-site factory audits help us to safeguard the integrity and reputation of our
business operation and partnerships.
We apply a risk-based approach to reviewing our supplier base, including the
prioritisation of factory audits.
Audits are carried out by specialist, independent, third-party auditors with
expert knowledge of local laws and practices. They assess facilities against over
200 indicators consistent with our terms and conditions, and produce a report
including a Low to Critical Risk classification.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
During the year, our audit schedule was realigned with our revised Vendor Code of Conduct and ESG Partner Standards, and we continue to increase the number
of supplier partner facilities we have audited. Since our programme began in FY23 we have audited 59% of jewellery suppliers by turnover.
In FY24, we audited 8% of our jewellery suppliers and required three supplier partners to implement Corrective Action Plans as a result of our findings. A further
three audits were scheduled, and of these, two were delayed until early in FY25, due to an unforeseen resourcing issue with our third-party supplier. Additionally,
the third supplier was delisted after refusing to divulge factory details.
FY24 FACTORY AUDITS
To rev iew
Total factories
audited Low risk
Intermediate
risk High risk Critical risk
Corrective
action plans
completed
Delisted/not
approved
Facilities audited 5 2 1 2 3
After corrective action 3 2 pending re-audit
On receiving audit reports, we contact supplier partners directly and allow 30 days for any identified risks to be resolved. Corrective actions are only resolved when
the facility can evidence that the action has been satisfactorily remedied, which can be through the sharing of documentation, real-time video evidence, an on-site
assessment by a trained colleague or a follow-up independent audit.
We are committed to building strong, long-term relationships with all of our supplier partners and will always collaborate to resolve issues, wherever possible. However,
if we find evidence of a serious breach of our terms, we will not hesitate to terminate our contract, make a public disclosure and notify the relevant authorities.
Supplier partners who are accredited members of the Responsible Jewellery Council are also subject to third-party audits as part of their accreditation.
SUPPLY CHAIN MANAGEMENT
In addition to the EcoVadis IQ technology, which is helping us to identify and monitor sustainability risks within our supply chain, the EcoVadis system can facilitate
full sustainability assessments of any supplier partner registered through the platform. Assessments are carried out in line with the Sustainability Accounting
Standards Board (SASB) standards and participating partners receive a bespoke scorecard containing details of how their business performs against key sustainability
criteria, as well as guidance on areas for improvement, which is available in multiple languages.
We continue to encourage supplier partners to participate in an EcoVadis sustainability assessment, or an equivalent, in line with our goal to partner with suppliers
who hold, or are aligned with, relevant, well-recognised standards and certifications.
In November 2024, our plans to participate in an EcoVadis sustainability and carbon performance assessment were postponed, after the Group was selected to
participate in a grant-funded project to explore how AI and machine learning technology can be used to enhance ESG compliance and reporting.
A key aim for this project is to develop and deploy AI technology to help us understand the level of supply chain alignment with our ESG Partner Standards, in order
to enhance our supply chain engagement strategy and further mitigate against risk.
Our progress will be published in our FY25 Annual Report and Accounts.
“To meet the changing needs and expectations
of our clients and wider society, it’s crucial
we work in partnership with our suppliers
to understand the environmental and social
impacts of our product range and services.”
JIM CRICHTON
DIRECTOR OF GLOBAL MERCHANDISING & BUSINESS INSIGHTS
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
PROCURING PRODUCTS AND SERVICES
We understand that responsible procurement practices can fundamentally
change the way products and services are designed, provided, used, and disposed
of, which can help us to support local economies, achieve climate related goals,
and ultimately build a more valuable business.
The scale of our purchasing power presents opportunities to further enhance
partnership working, achieve value for money and encourage innovation.
Following a review in FY24, we are investing in our procurement and supply
chain management capability to help to further strengthen this important area.
PRODUCT INNOVATION
We support the development and implementation of new technologies and
practices that promote environmental, social and economic sustainability and
welcome products with a lower environmental impact, produced by partners
with strong sustainability practices.
Our brand partners continue to develop and implement new technologies into
their manufacturing processes, and we are expanding our product range with
exciting new brands such as William Wood, who create watches that represent
firefighters and first responders, and which contain recycled firemen’s helmets
in their casing and upcycled hoses in their watch straps. The brand also donates
a percentage of its’ profits to fire fighters’ charities.
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
Our Vendor Code of Conduct and ESG Partner Standards set out our
expectations in relation to freedom of association and collective bargaining.
Supplier partners are required to adopt an open attitude towards trade unions
and their activities. It is the Group’s policy that all workers, without distinction,
should have the right to establish and join organisations of their own choosing
and bargain collectively, without prior authorisation or interference from
government or one another.
PRODUCT INFORMATION
We recognise product disclosure is an important aspect of consumer protection
and fair business practice, as it demonstrates transparency and helps build trust.
In line with our goal to help clients make more informed purchasing decisions
and protect them from any negative consequences or disappointment, we
encourage supplier partners to provide detailed, accurate information about a
product’s features, origins and materials, as well as any potential health and
safety risks.
Our ESG Partner Standards detail our requirement for supplier partners to
comply with internationally accepted standards and existing obligations under
consumer protection law and safety legislation.
Claims about the environmental aspects or performance of products, must be
substantiated using robust and verifiable methods and we take a zero-tolerance
approach to misleading product representation.
In April 2024, we wrote to relevant supplier partners to highlight a change in
product safety regulations in the US, and ensure compliance with Reese’s Law,
which is intended to protect children from accidentally swallowing button cell
and coin batteries.
KIMBERLEY PROCESS CERTIFICATION SCHEME AND THE WORLD
DIAMOND COUNCIL SYSTEM OF WARRANTIES
Knowing where our diamonds come from allows us to reassure clients
that they are authentic and ethically sourced.
All suppliers of diamonds, or jewellery incorporating diamonds, must
comply with the Kimberley Process Certification Scheme, as well as all
laws in relation to this scheme and the World Diamond Council System
of Warranties Assurance (WDC SoW).
Any diamonds supplied to us must be conflict free and accompanied by
written guarantees in line with WDC SoW Assurance. We will not accept
an invoice without this statement. Once a diamond is imported and ready
for trade, we also require a WDC SoW Assurance statement on every
invoice for rough diamonds, polished diamonds, or diamond jewellery,
through to the final invoice to clients.
Records of warranty invoices received, as well as invoices issued when
buying or selling diamonds, are regularly audited and reconciled.
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ANIMAL WELFARE
We will not tolerate any harsh or inhumane treatment of animals and only buy
watches through the most reputable manufacturers. All watch suppliers must
provide written confirmation that any animal skins used to make straps are
sourced from farmed and sustainably managed sources and conform to relevant
international laws, including the Convention on International Trade in Endangered
Species (CITES).
We are growing our range of more socially and environmentally preferable
product options, including straps made from vegan friendly materials.
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
(OECD) DUE DILIGENCE GUIDANCE
Through our ESG Partner Standards, we ask supplier partners to follow the
OECD Due Diligence Guidance and implement the OECD 5-step guidance.
This risk-based approach is designed to help organisations avoid contributing to
conflict, serious human rights impacts and financial crime through their
operations. The framework includes embedding strong management systems,
identifying risks, independent third-party audits and transparency.
SANCTIONS
The Group complies with all relevant national and international law and legislation,
which includes all UK Government sanctions and requirements, as well as those
imposed by the US Department of the Treasury and its Office of Foreign Assets
Control and we require our suppliers to do the same.
We continue to cease trade in diamonds, coloured gemstones and precious
metals such as gold, silver and platinum from sanctioned Russian sources.
On 1 March 2024, we engaged with all of our watch and jewellery suppliers to
remind them that any diamonds supplied to us, must be accompanied by a self-
certification statement declaring that they were not mined, extracted, produced,
or manufactured wholly or in part in the Russian Federation, notwithstanding
whether such diamonds have been substantially transformed into other products
outside of the Russian Federation.
GOLD AND OTHER PRECIOUS METALS
An increasing number of our watch suppliers are using recycled gold in their
production processes. All precious metals supplied to us must demonstrate legal
compliance according to all the provisions of the financial market supervisory
authority and be sourced from refineries on the London Bullion Market
Association Good Delivery List or the UAE Gold Good Delivery Scheme.
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE
continued
ANTI-BRIBERY, CORRUPTION & FRAUD
The Board has overall responsibility for the Anti-Bribery, Corruption & Fraud
Policy, which is regularly reviewed by senior management and the Audit & Risk
Committee. The Policy reinforces the Board’s commitment to conducting the
Group’s business affairs to ensure that it does not engage in or facilitate any form
of corruption. The aim of the Policy is to ensure compliance with applicable anti-
bribery and corruption legislation and regulations and to ensure that colleagues
act responsibly and ethically at all times when conducting business. The Policy
sets out the Group’s protocols in relation to hospitality and gifts.
The Group’s Company Secretary and General Counsel has day-to-day
responsibility for the Policy and reports to the Chair of the Audit & Risk
Committee and to the Board as required. Colleagues are required to complete
mandatory e-learning annually.
During the year, the Policy was reviewed and approved by the Board and amended
to provide additional clarity and reinforcement of the Company’s aversion to and
strict protocols regarding fraud and the receiving and giving of gifts and hospitality.
CODE OF ETHICS
During the year, the Board reviewed and approved the Code of Ethics, which can
be found on the corporate website thewosgroupplc.com. The Code of Ethics
was further expanded to support changes made to the governance framework
of the Company. This included: (i) updating for enhanced Data Protection
processes and protocols including reference to the consideration of the evolving
AI technology; (ii) inclusion and promotion of the Wellbeing benefits which have
been implemented and which now link with the Group’s Health & Safety section
of the Code of Ethics; and (iii) notification of the Group’s tax approach.
ANTI-MONEY LAUNDERING AND SANCTIONS
The Company has an Anti-Money Laundering (AML) Policy which was reviewed
by the Board during the year. The Policy was updated to take into account the
trading status of the Group. The Policy enforces a strict regime in the prevention
of money laundering. The Group Policy is supported by internal operational and
local territory specific business policies.
TAXATION
We seek to build solid and constructive working relationships with all tax
authorities. The Group has held the Fair Tax Mark since February 2022, and most
recently achieved reaccreditation from the Fair Tax Foundation in May 2024. The
Fair Tax Mark is the gold standard of responsible tax conduct and demonstrates
that the Group pays the right amount of corporate income tax at the right time
and in the right place. The Group pays corporation tax on all operations and does
not operate in any tax havens or use any tax avoidance schemes.
The Board reviewed the Corporate Criminal Obligations (CCO) Policy which sets
out the Group’s zero tolerance approach to tax evasion; no changes were necessary
from the prior year when the Policy was introduced. The CCO Policy describes the
legal framework, information and guidance on how to recognise and deal with tax
evasion matters. Compliance with the Policy and disclosures arising from it are
included in the annual review undertaken by the Senior Accounting Officer. During
the year, training was delivered to relevant colleagues, including those in support
and retail, and the Directors were provided with awareness documentation, as it is
recognised this is an important part of the legislation. Further information on our
Tax Strategy and CCO Policy can be found at thewosgroupplc.com.
PAYMENT PRACTICES
We understand the importance of maintaining good relationships with suppliers
and have transparent payment terms and payment procedures to ensure prompt
payment. It is Group policy to agree appropriate terms and conditions for
transactions with suppliers (ranging from standard written terms to individually
negotiated contracts) and for payments to be made in accordance with these
terms, provided the vendor has complied with its obligations.
Our payment practices report is available at http://.check-payment-practices.
service.gov.uk/search, which showed the Group took on average 24.7 days to
pay in the six-month period to the end of FY24.
RETURNS POLICY
The business operates a standard Returns Policy. The manufacturer’s warranty
for timepieces varies by brand and style, however, most warranties are usually
valid for two years from the date of purchase, with three years of extended
warranty for certain watch brands. If a timepiece malfunctions, we will, at our
discretion, repair or replace the movement at no charge if such movement
shows a manufacturer’s defect under normal use.
DATA PROTECTION, INFORMATION SECURITY AND CYBER SECURITY
The Group has a responsibility to protect client and colleague personal data,
and use it fairly and appropriately in line with the applicable law and regulation in
each country in which we operate. We have a Group Data Protection Officer
with responsibility for all data protection matters, and a Cyber Security Team
responsible for security measures across our networks and systems. The two
work closely together to ensure a joined-up, risk-based approach.
The Group’s data protection framework continues to mature to meet the needs
of a growing global business and evolving legal landscape. We have in place a
broad range of measures designed to meet our data protection and security
obligations, including policies and processes, governance and oversight measures,
and mandatory annual training. Alongside this, we employ a suite of technical
controls to detect and protect against known and emerging security threats.
Further information on how we govern associated risks can be found on page
132. The Group has not experienced any security breaches over the last three
years and no fines or penalties have been incurred.
HEALTH & SAFETY
The Company has a Group Health & Safety Policy and governance processes in
place to ensure the Board is updated regularly on health and safety activities and
on any accidents or incidents that occur. Further information on the Company’s
health & safety activities can be found on page 83.
The Company complies with relevant legislation regarding product safety
andlegislation.
During the year the Group engaged with suppliers to ensure compliance
with the newly introduced ‘Reece’s Law’, applicable in the US, relating to new
requirements for coin batteries or button cells.
WHISTLEBLOWING
It is important for the business to have an open and transparent work culture.
We aim to conduct our business with the highest standards of honesty and
integrity every day. The Board has overall responsibility for this policy and the
Director of Internal Audit & Risk has day-to-day operational responsibility.
The Chair of the Audit & Risk Committee receives a summary of all protected
whistleblowing reports for communication to the Board.
Under the Policy, whilst colleagues are encouraged to report any concerns or
complaints, without fear of recrimination, the Board acknowledges there may
be circumstances where internal reporting lines may not be suitable or may
discourage colleagues from speaking out. We therefore, use a third-party to
provide an independent reporting system. This is a global facility for colleagues
to raise concerns confidentially, with the option of maintaining anonymity.
Colleagues are required to complete mandatory e-learning training annually.
BRIBERY, CORRUPTION, TAXATION
AND HEALTH AND SAFETY
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The Watches of Switzerland Group defines risk as uncertainty around the
organisation’s ability to achieve its objectives and execute its strategy effectively.
Risks can be positive (opportunities) and negative (threats) and are a combination
of the likelihood of an event and the impact of the consequence.
Risk is inherent in both the Group’s operations and strategic decision-making.
These risks and uncertainties could impact the delivery of strategic and
operational objectives. Effective risk management helps support the successful
delivery of the Group’s objectives. The Board’s role is central to understanding
and providing oversight into how risks are being managed and addressed. The
Board has established a framework of prudent and effective controls which
enable risk to be assessed and managed. The Board takes responsibility for the
management of risk and internal control systems throughout the business. This
includes determining the nature and extent of the principal risks the Board is
willing to take in achieving strategic objectives (the Board’s risk appetite), and
challenging management’s implementation of effective systems of risk
identification, assessment, prioritisation, and management.
The Audit & Risk Committee, on behalf of the Board, has responsibility for
maintaining oversight of the Group’s framework for risk management. Whilst
ultimate responsibility for the oversight of risk management rests with the Board,
the effective day-to-day management of risk is embedded within the business
through a layered assurance approach.
The Board recognises that risk management is an integral part of good corporate
governance and management practice and to be effective, should become
embedded within the organisation’s culture. The Board is, therefore, committed
to ensuring that risk management forms an integral part of its philosophy, practices,
and business plans rather than being viewed or practised as a separate programme
and that responsibility for implementation is accepted at all levels of the
organisation. During the year, the Board reviewed the effectiveness of the Group’s
risk management and internal controls systems. This review included the discussion
and review of the risk registers and the internal controls across all business
functions, as part of an annual exercise facilitated by the Internal Audit team.
RECOGNISING EFFECTIVE
RISKMANAGEMENT
“Effective risk management is essential in supporting the delivery
of the Group’s strategic objectives, achieving stakeholder value,
and delivering long-term success.”
BRIAN DUFFY
CEO
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RISK MANAGEMENT
Summary of the key risks facing the Group, prepared through review of departmental risks identified through the bottom-up risk
identification process, and the Group-level risks identified and owned by the Trading Board.
GROUP RISK REGISTER
WHAT WE MONITOR
OUR RISK LANDSCAPE
– Current risks: risks we are managing now
that could stop us from achieving our
strategic objectives
– Emerging risks: risks with a future
potential impact from external or internal
opportunities or threats
WHAT WE ASSESS
– Risk ownership: each risk has a named
owner
– Likelihood and impact: globally applied
scoring scale
– Gross risk: before mitigating controls
– Mitigating controls: subject to Internal
Audit review
– Net risk: after mitigating controls applied
– Risk movement: any change in risk score
since previous assessment
– Risk appetite: defined at subcategory level
– Target risk: overall target risk score
– Actions: for further mitigation, if required
OUR IDENTIFIED RISKS
Risks are categorised into one of six
categories:
– Financial
– Operational
– Client
– People
– Regulatory
– ESG
DEPARTMENTAL RISK REGISTERS
Owned by individual departments and teams across the Group. These identify specific risks and mitigating controls arising from day-to-day operations.
RISK MANAGEMENT PROCESS
IDENTIFY
– Risk registers are completed by
each business function, identifying
the risks in their areas of control
– The Audit & Risk Committee and
Board identify key risks within the
Group’s strategic priorities
– Horizon scanning takes place
periodically with senior management
ASSESS
– The likelihood of risk occurrence
and the potential impact of the
riskare assessed. This assessment
takes place before and after
consideration of mitigating controls
– The risks are reviewed to
determine their categorisation,
including financial, operational,
client, regulatory and reputational
– Appetite for each key risk is
assessed with a target risk position
agreed to reflect the level of risk
that the business is willing to accept
MANAGE
– Controls and mitigation plans are
implemented to manage the risks
– Consideration is given to the
Board’s risk appetite to help
determine the appropriate risk
management strategy
– Actions are agreed to further
manage the identified risks, in line
with risk appetite and according to
risk strategy
MONITOR
– Continued oversight and tracking of
identified risks. These are presented
to the Trading Board, the Board
and the Audit & Risk Committee
– The Internal Audit Teams review
the effectiveness of controls and
identifies gaps in control requiring
further action
– Risk incidents are reviewed, and
thelessons learned drive further
mitigation
1 3
2
4
Climate related risks follow the same framework as all other risks impacting the business. Additional information relating to the Group’s
TCFD disclosures, including risk management compliance, governance, strategy, and TCFD-related risks, can be found on pages 106 to 122.
3
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s
e
s
s
1
4
3
2
The Group’s established framework for
managing risks has continued to be in place
across the business throughout this financial
year, with responsibility to implement the
Board’s policies on risk management and
internal control sitting with management.
The Group’s risk management framework
helps identify, assess, manage, and monitor
risksto within the risk appetite set by the
Board, whilst taking advantage of
opportunitiesas theyare presented. Senior
management is responsible for minimising the
adverse exposure to the Group and
its stakeholders.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Set out below are the key responsibilities and key activities of the various functions of the Group in relation to risk management:
– Oversees the adoption of appropriate risk management systems that identify
emerging and established risks facing the Group and its stakeholders
– Determines the nature and extent of the principal and emerging risks faced
by the Group and those risks which the business is willing to take in achieving
its strategic objectives (determining its risk appetite)
– Conducts a half-yearly review of the risk register and principal risks
– Members have responsibility for managing risk within their areas
of responsibility
– Identifies new and emerging risks
– Maintains the business function risk registers
– Identifies and assesses risk within business functions and implements
actions to reduce risk exposure to an acceptable target level
– Embeds and manages internal controls and risk management processes
as part of business-as-usual operations
– Assists the Board to fulfil its corporate governance responsibilities
in relation to financial reporting, internal controls, and the risk
management framework
– Conducts formal reviews of the principal and emerging risks twice a year,
one of which is in connection with the consideration of the viability
statement
– Reviews and oversees the Group risk register and risk management
framework and assesses their effectiveness in mitigating Group-level risks
– Reviews key risk areas with relevant Senior Managers to understand the
nature of the risks and adequacy of the mitigations and controls in place
– Reviews and approves the Group Risk Management Policy
HOW WE MONITOR
BOARD
Collective responsibility for the management of risk throughout the business
TRADING BOARD
Managing the risk management process
on a day-to-day basis
OPERATIONAL MANAGEMENT
Identifying and managing risks on a day-to-day basis
AUDIT & RISK COMMITTEE
Oversees risk management systems and process,
under delegation from the Board
– Provides an objective compliance and monitoring overview – Identifies non-compliance with key business processes
OPERATIONAL AUDIT, LOSS PREVENTION AND SECURITY TEAM
Reviews compliance with certain key internal procedures in showrooms and at other locations
– Ensures that principal risk topics are scheduled for regular review by
the Board
– Facilitates updates to the corporate and business function risk registers
in partnership with operational management
– Presents the outcome of the risk review to the Trading Board and the
Audit & Risk Committee
– Shares risk management information and best practice across the Group
INTERNAL AUDIT TEAM
Provides assurance to the Audit & Risk Committee through independent reviews of agreed risk areas
– Agrees how the principal risks should be managed or mitigated and over
what timeframe to reduce the likelihood of their incidence or the magnitude
of their impact
– Establishes clear internal and external communication channels on the
identification of risk factors
– Determines the monitoring and review process
132
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
RISK MANAGEMENT
continued
RISK APPETITE
Risk appetite is an expression of the amount and types of risk that the Group is willing to take to achieve its strategic
and operational objectives. The Group accepts that it cannot achieve its long-term strategic objectives without being
exposed to an element of risk. Understanding current and emerging risk is therefore integral to the Group’s decision-
making process.
The Board determines the amount of risk the Group is willing to accept in the pursuit of the Group’s strategic
objectives, dependent on the type of risk. In exploring risks and opportunities, we prioritise the interests and safety
of our clients and colleagues and seek to protect the long-term value and reputation of the brand, while maximising
commercial benefits to support responsible and sustained growth.
The Group assesses the level of risk exposure against its associated risk appetite to ensure that we appropriately
prioritise our resources to manage risks within our risk appetite. Where the residual risk remains outside the Board’s
risk tolerance, additional actions are identified to further mitigate the risk down to an acceptable target level.
The Group’s risk appetite and tolerance levels were considered and approved by the Board and are reviewed
annually. These are used to set tolerance limits and target risks for each of the principal risks and refine mitigation
plans where appropriate.
In summary, the Board has a very low appetite for risks that could lead to breaches of legal and regulatory
requirements. The Group has a low appetite for risks that could impact its reputation, for example in the areas of
data management and cyber security. In contrast, the Group has a higher risk appetite in relation to business strategy,
as evidenced through our growth in the UK and US markets.
THE UK CORPORATE GOVERNANCE CODE
REQUIRES COMPANIES TO DETERMINE
THEIR RISK APPETITE
133
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The 2018 UK Corporate Governance Code (the Code) states that the Board is responsible for determining the nature and extent of the principal risks it is
willing to take in achieving its strategic objectives and that it should maintain sound risk management and internal control systems.
The Board has completed its assessment of the Group’s risk landscape and has identified the most significant risks and uncertainties that may impact the Group’s
ability to achieve its strategic and operational goals. The Group recognises that the profile of risks constantly changes, and additional risks not presently known, or
that may be currently deemed immaterial, may also impact the Group’s business objectives (as detailed on pages 34 to 37) and performance. The risk management
framework is therefore designed to manage rather than eliminate the risk of failure to achieve business objectives, and, as such, can only provide reasonable and not
absolute assurance against these principal uncertainties impacting business performance.
The Board confirms that it has carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future
success, solvency, or liquidity.
EMERGING RISKS
As part of the ongoing risk management framework described above, the Group identifies emerging risks and determines their potential impact on the business.
The Group undertakes horizon scanning to monitor any potential risks that could change our industry and/or our business, looking at both the inherent risk and
opportunity. Emerging risks are new and evolving, and thus their full potential impact is still uncertain.
The Group defines emerging risks as newly developing risks that are often difficult to quantify but may materially affect our business. Emerging risks are usually highly
uncertain risks which are external to the Group, and we take a proactive approach to the emerging risk management processes, with the objective of enabling us to:
– Identify, manage, and monitor a broad range of potential emerging risks
– Mitigate the impact of emerging risks which could impact the delivery of the Group’s strategy
– Record each emerging risk within an Emerging Risk Register
The Board’s assessment of the principal risks and uncertainties facing the Group and the mitigations in place are set out below.
BUSINESS STRATEGY EXECUTION AND DEVELOPMENT
Principal risk description
If the Board adopts the wrong strategy or does not implement
its strategy effectively, the business may suffer.
The Group’s growth strategy exposes it to risks and the
Groupmay encounter setbacks in its ongoing expansion in the
UK and US.
The Group’s significant investments in its showroom portfolio,
IT systems, colleagues and marketing may be unsuccessful
in growing the Group’s business as planned.
The acquisition of Roberto Coin Inc. in the US moves the
Group into the wholesale sector, a sector within which the
Group has more limited existing internal expertise. There is
strong reliance on incumbent management at Roberto Coin
Inc. to deliver the Group’s strategy.
As the Group continues to make acquisitions, these may prove
unsuccessful or divert its resources. Further growth through
acquisition is dependent upon the Group’s ability to identify
suitable targets, conduct effective due diligence, negotiate
transactions on favourable terms, complete such transactions
and successfully integrate the acquired businesses.
The Group may fail to respond to the pressures of an
increasingly changing retail environment effectively and rapidly.
The re-evaluation of priorities and their delivery, including the
consideration of initiatives to respond to permanent changes in
client behaviours or to change working practices, is paramount
in the current environment.
How we manage or mitigate the risk
– The Board reviews its business strategy on a regular basis to
determine how sales and profit can be maximised, and business
operations can be made more efficient
– The Board has significant relevant experience, including in the
retail and luxury markets
– The CEO provides updates to the Board on key development
opportunities and initiatives
– Expansion of the property portfolio or potential acquisitions
must meet strict payback criteria. Return on investment of
marketing and other investment activity is monitored closely
– Key management information is provided to the Board on a
regular basis to help inform strategic decision-making
– The Group has adapted its strategy to take advantage of online
trading, client appointments and introduced the Luxury Watch
and Jewellery Virtual Boutique to maximise sales
– The Group has diversified its operations through the expansion
of mono-brand boutiques, ecommerce platforms and enhanced
luxury branded jewellery offers. There is international market
diversification reducing reliance on one territory
Change in risk
No change
Links to strategy
IDENTIFICATION, EVALUATION AND
MANAGEMENT OF THE GROUP’S RISKS
134
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PRINCIPAL RISKS AND UNCERTAINTIES
KEY SUPPLIERS AND SUPPLY CHAIN
Principal risk description
The manufacture of key luxury watch brands is highly
concentrated among a limited number of brand partners
and the production of luxury watches is limited by the small
number of master watchmakers and the availability of artisanal
skills. Owners of luxury watch brands control distribution
through strict, Selective Distribution Agreements.
Consequently, the relationship with owners of luxury watch
brands is crucial to the Group’s success.
Some of the Group’s distribution agreements with luxury
watch brands provide owners of such brands with a right to
terminate the agreement in the event of a change of control
and/or management of the Group. The Group is subject to the
risk that owners of luxury watch brands may decide to
terminate these contracts or otherwise not to renew them
upon expiry, or to reduce the number of agencies they grant
to the Group.
The Group’s distribution agreements with suppliers do not
guarantee a steady supply of merchandise.
The Group’s business model may also come under significant
pressure should the owners of luxury watch and jewellery
brands choose to distribute their own watches, increasingly or
entirely by-passing third-party retailers such as the Group.
How we manage or mitigate the risk
– The Group fosters strong relationships with brand partners and
other suppliers, many of which have been held for a significant
length of time
– Supplier distribution contracts are monitored to ensure
continued compliance with contractual obligations
– The Group works collaboratively with brand partners to
identify product trends and forward demand
– Continued focus on providing exceptional client experience,
representing the brands in the best possible way
– Client experience is further elevated through new, larger
showrooms that are supported by the brands
– In-depth training for showroom colleagues is provided, including
specific training provided by the brand partners
– The Group’s sales mix is becoming more broad-based, with less
reliance on individual brands to drive success
– Review opportunities to extend our expertise into complementary
business and service models
Change in risk
No change
Links to strategy
CLIENT EXPERIENCE AND MARKET RISKS
Principal risk description
An inability to maintain a consistent high-quality experience for
the Group’s clients across the sales channels, particularly within
the showroom network, could adversely affect business.
The increased number of registration of interest (ROI) watches
could adversely impact the perceived client experience.
The Group faces competition and any failure by the Group
to compete effectively could result in a loss of market share
or the ability to retain supplier agencies. Long-term consumer
attitudes to diamonds, gold and other precious metals and
gemstones could be affected by a variety of issues, including
concern over the source of raw materials, the impact of mining
and refining of minerals on the environment, labour conditions
in the supply chain, and the availability and perception of
substitute products, such as cubic zirconia and laboratory-
created diamonds. Equally, longer term consumer attitudes to
more technologically advanced watches, such as ‘smart
watches’ could reduce consumer demand for luxury watches.
How we manage or mitigate the risk
– The Group provides the ultimate luxury environment for its
clients to feel welcome, appreciated and supported
– Our Xenia Client Experience Programme further elevates our
client experience proposition (refer to page 40)
– Our brand partners audit and assess our client experience
enabling us to independently benchmark and evaluate our
performance
– Exceptional training is provided for our showroom colleagues,
and other client-facing colleagues, to allow them to provide the
best client service, along with in-depth product knowledge
– The CRM database allows the Group to engage with the client
on their journey from a potential to a loyal client
– The Group continues to invest in and develop its product
offering to improve the value offered to consumers, retailers,
and manufacturers
– Competitor activity is monitored in detail, enabling strategic
decision-making on key market positions
– Our Luxury Watch and Jewellery Virtual Boutique experience is
a unique differentiator and recognised as a competitive
advantage, as is the Group’s scale and technological capabilities
– Consumer trends are monitored to ensure product ranges
remain aligned to client demand
Change in risk
No change
Links to strategy
STRATEGIC PRIORITIES
Grow revenue, profit and
Return on Capital Employed
Enhance strong brand partnerships
Deliver an exceptional client service
Drive client awareness and brand image
Leverage best-in-class operations
Expand our multi-channel leadership
Continue to advance the ESG agenda
135
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
COLLEAGUE TALENT AND CAPABILITY
Principal risk description
The Group depends on the services of key talent to manage its
business, and the departure of such colleagues or the failure to
recruit and retain suitable personnel could adversely affect the
Group’s business.
Client experience is an essential element in the success of the
Group’s business, where many clients prefer a more personal
face-to-face experience and have established strong relationships
with the Group’s retail colleagues. An inability to recruit and
retain suitably qualified colleagues, especially with specialised
knowledge of luxury watches and jewellery, would have a
material impact on the Group.
How we manage or mitigate the risk
– The Trading Board considers the development of senior
management to ensure there are opportunities for career
development, promotion, and appropriate succession
– The Nomination Committee considers the succession planning
for the Board, and senior management
– The Company’s recognition programmes are in place to
incentivise and motivate colleagues
– A wide range of training and development programmes are
available to colleagues
– The Colleague Engagement Survey provides an insight into
what colleagues feel would make the Group an even better
place to work
– The Group continually reviews the remuneration and benefits
packages for all colleagues
– We utilise a two-way engaging communications platform,
Workplace, globally. This social channel underpins Group
communications to colleagues
Change in risk
No change
Links to strategy
DATA PROTECTION AND CYBER SECURITY
Principal risk description
The increasing sophistication and frequency of cyber-attacks,
coupled with data protection laws, highlight the escalating
information security risk facing all businesses.
As the Group operates in the UK and US markets, the
regulatory environment surrounding these areas is considered
more complex.
Security breaches and failures in the Group’s IT infrastructure
and networks, or those of third parties, could compromise
sensitive and confidential information and affect the Group’s
reputation.
Theft or loss of Company or client data or potential damage to
any systems from viruses, ransomware or other malware
could result in fines and reputational damage to the business
that could negatively impact on our sales.
How we manage or mitigate the risk
– Dedicated Group Data Protection Officer in place
– Significant investment in systems development and security
programmes
– Systems vulnerability and penetration testing is carried
out regularly
– The Group Data Protection Committee meets regularly to
review related processes and emerging risks
– Information security and data protection policies, procedures,
and training in place
– Enhanced multi-factor authentication (MFA) enforced across
the Group
– Next Generation email security system implemented
– New 24/7 security operations centre (SOC) service onboarded
– Improved reporting capabilities allow all colleagues to promptly
report any suspicious content or activity they encounter
– External maturity assessment conducted to validate continuous
security improvement programme
Change in risk
Cyber threats are
increasing in volume and
complexity, in part
driven by artificial
intelligence. This creates
a more hostile external
environment with
greater risk.
Links to strategy
136
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PRINCIPAL RISKS AND UNCERTAINTIES
continued
STRATEGIC PRIORITIES
Grow revenue, profit and
Return on Capital Employed
Enhance strong brand partnerships
Deliver an exceptional client service
Drive client awareness and brand image
Leverage best-in-class operations
Expand our multi-channel leadership
Continue to advance the ESG agenda
BUSINESS INTERRUPTION
Principal risk description
Adverse weather conditions, pandemics, travel disruption,
natural disasters, terrorism, acts of war or other external
events could adversely affect consumer discretionary spending
or cause a disruption to the Group’s operations.
The inability of the Group to be able to operate showrooms
or a significant reduction in available colleagues to operate the
business, such as during a material pandemic, would significantly
impact the operations of the business.
The Group offers flexible delivery options (home delivery or
click and collect in showroom) and its online operations rely on
third-party carriers and transportation providers. The Group’s
shipments are subject to various risks, including labour strikes
and adverse weather.
The Group may experience significant theft of products from
its showrooms, distribution centres or during the
transportation of goods. Loss of high-value low-availability
pieces could damage our reputation and our clients may
become less inclined to visit our showrooms.
Disruptions to, or failures in, the Group’s IT infrastructure and
networks, or those of third parties, could disrupt the Group’s
operations, especially during periods of increased reliance on
these systems such as those experienced during the pandemic
lockdowns.
The Group relies on IT networks and systems, some of which
are managed by third parties, to process, encrypt, and
transmitelectronic information, and to manage or support a
variety of business processes and activities, including sales,
supply chain, merchandise distribution, client invoicing and
collection of payments.
How we manage or mitigate the risk
– The Group has a framework of operational procedures and
business continuity plans that are regularly reviewed, updated,
and tested
– The multi-channel model allows clients to continue their
relationship with us and to purchase in the event of disruption
to any single channel
– Robust security arrangements are in place across our showroom
network to deter and prevent crime and, in the event of an
incident, protect people and products
– A comprehensive insurance programme is in place to offset the
financial consequences of insured events
– A detailed IT development and security roadmap is in place
aligned to our strategy
– Reliable and reputable third-party logistic partners have been
engaged to ensure the secure transportation of goods
– The Group has in place action plans to effectively deal with the
impact of a pandemic on business operations
– Revised and enhanced the crisis response programme implemented
Group-wide
Change in risk
No change
Links to strategy
REGULATORY AND COMPLIANCE
Principal risk description
Fines, litigation, and reputational damage could arise if the Group
fails to comply with legislative or regulatory requirements
including, but not limited to, consumer law, health and safety,
employment law, data protection, anti-bribery and corruption,
competition law, anti-money laundering and supply chain
regulations.
As the Group continues its US expansion and trades in increasing
state jurisdictions, there is a risk the business lacks the detailed
knowledge of local US laws and regulations resulting in a breach,
significant fine, and reputational impact.
How we manage or mitigate the risk
– The Group actively monitors both regulatory developments
in the UK, US and Europe and compliance with existing
obligations
– Clear Group policies and procedures are in place, including, but
not limited to, anti-bribery, corruption and fraud, whistleblowing,
and data protection
– Mandatory induction briefings and training for all colleagues on
regulation and compliance
– Experienced in-house legal team with external expertise sought
as needed
– The established culture and values foster open, honest communication
– Operational activities have been amended, and continue to be
updated, to comply with guidance provided by the Government
to prioritise the safety of colleagues and clients
– Regulatory compliance reviews form part of the rolling Internal
Audit plan
Change in risk
No change
Links to strategy
137
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ECONOMIC AND POLITICAL
Principal risk description
The Group’s business is geographically concentrated in the UK and
US, with a more limited European footprint. Any sustained
stagnation or deterioration in the luxury watch or jewellery
markets or decline in consumer spending in these territories could
have a material adverse impact on the Group’s business.
The Group or its suppliers may not be able to anticipate, identify
and respond to changing consumer preferences in a timely
manner, and the Group may not manage its inventory in line
with client demand.
Ongoing legal, political, and economic uncertainty in the UK, US
and international markets could give rise to significant currency
fluctuations, interest rate increases, adverse taxation
arrangements or affect current trading and supply arrangements.
How we manage or mitigate the risk
– Regular monitoring of economic and political events
– Focus on client service to attract and retain clients
– The Group updates internal return on investment hurdles and
criteria to reflect changing market environments
– Detailed sales and inventory data is analysed to anticipate future
trends and demand, taking into consideration the current
economic environment
– Through continued expansion in the US, the Group is not
wholly dependent on the economic or political environment in
one single market
Change in risk
Softening of global
luxury markets and
political uncertainty in
Ukraine and Middle East
along with major
elections in the US and
UK impacting global
economies
Links to strategy
BRAND AND REPUTATIONAL DAMAGE
Principal risk description
The Watches of Switzerland Group’s trading brands and its
corporate brand are an important asset, and failure to protect
the Group’s reputation and brand could lead to a loss of trust
and confidence. This could result in a decline in the client base,
affect the ability to recruit and retain the best people, and
damage our reputation with our suppliers or investors.
How we manage or mitigate the risk
– The Group has a clear and open culture with a focus on trust
and transparency
– Excellent client experience is a key priority of the Group and
subject to independent scrutiny by our major brand partners
through mystery shopping programmes
– The Group undertakes regular client engagement to understand
and adapt the product, offer, and showroom environment
– The use of impactful, digital-led marketing, along with an in-
depth knowledge of products, makes the Group an authority in
the markets it serves
– Training and monitoring of adherence by colleagues to Group
policies and procedures
– The Group has conducted a materiality assessment to understand
the priorities and focus areas of its stakeholders, including
colleagues, brand partners and other suppliers, investors and
community groups
Change in risk
No change
Links to strategy
138
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
PRINCIPAL RISKS AND UNCERTAINTIES
continued
STRATEGIC PRIORITIES
Grow revenue, profit and
Return on Capital Employed
Enhance strong brand partnerships
Deliver an exceptional client service
Drive client awareness and brand image
Leverage best-in-class operations
Expand our multi-channel leadership
Continue to advance the ESG agenda
FINANCIAL AND TREASURY
Principal risk description
The Group’s ability to meet its financial obligations and to support
the operations and expansion of the business is dependent on
having sufficient funding over the short, medium and long term.
The Group is reliant on the availability of adequate financing from
banks and capital markets to meet its liquidity needs.
The Group’s level of indebtedness could adversely affect its
ability to react to changes in the business and may limit the
commercial and financial flexibility to operate the business.
The Group is exposed to foreign exchange risk and profits may
be adversely impacted by unforeseen movements in foreign
exchange rates.
Significantly reduced trading over an extended period, due to a
pandemic, could impact the business’s ability to operate within
committed credit facilities.
How we manage or mitigate the risk
– The Group maintains a £225 million revolving credit facility with
a term of four years remaining
– The Group’s net cash position and available funding is actively
managed through a Group Treasury policy and cash flow projections
are regularly monitored by management and the Board
– Exchange and interest rates are regularly reviewed to determine
if hedging should be put in place
– A three-year strategic cash flow is prepared and stress-tested,
including the impact on covenant calculations
– Quarterly meeting with the lenders’ agent to update on forecast
and trading
– To support the financing of the Roberto Coin Inc. acquisition
and provide additional headroom, a short-term loan facility of
US$115million has been agreed, extendable up to February 2026
Change in risk
No change
Links to strategy
CLIMATE CHANGE
Principal risk description
The increased frequency of extreme weather events may lead
to the significant disruption of retail showrooms, offices, and
distribution centres, through flooding and strong winds. The
supply chain may also be impacted through transporting goods
to showrooms.
In a changing climate, there is the potential for higher insurance
premiums for business operations, especially ones located in
specific geographies.
The increasing cost of energy and potential regulatory
mechanisms on direct carbon emissions, may impact business
financials and profit if the Group cannot transition to a more
low-carbon business model.
The Group’s reliance on premium raw materials, which are a
finite resource, increases its exposure to resource scarcity, and
the potential increased cost of obtaining these resources in a
challenging supply chain environment.
The Group may fail to implement its mitigation strategy
to reduce its impact on the climate and manage the risk
appropriately, leading to increased scrutiny from stakeholders
and investors, resulting in reputational damage.
How we manage or mitigate the risk
– The Board has overall responsibility for managing climate-related
risks, as well as ensuring our strategy creates value and achieves
our Purpose to WOW our clients, while caring for our
colleagues, our communities and our planet
– Climate related issues are addressed on a regular basis by the
ESG Committee, which is chaired by an Independent Non-
Executive Director
– The ESG Committee challenges our ESG Steering Group on
progress against goals and targets
– Key climate related risks and opportunities are governed via our
Audit & Risk Committee along with the accuracy of and
compliance with ESG-related disclosures, including TCFD
– The ESG agenda continues to evolve rapidly and climate training
has been introduced for Board members to ensure they have
sufficient knowledge for effective decision-making
– The CEO has overall operational responsibility for climate
strategy and the mitigation of related risks
– The CFO has day-to-day operational responsibility for climate-
related risks and opportunities and chairs a regular ESG Steering
Group, which reports into the ESG Committee
– The Group has a dedicated Head of Sustainability and ESG, who
has significant experience in relation to climate change
– The ESG Steering Group is responsible for assessing and managing
climate related risks and opportunities against KPIs aligned to our
ESG pillars of ‘People, Planet and Product’ and ensuring all
operational matters in respect of our ESG Strategy are fully
embedded into our business strategy and operation, including an
underpin to Group bonus programmes (refer to pages 185)
– Each ESG pillar is supported by Working Groups, which include
senior operational managers, with input from external consultants
– The Group undergoes numerous external assessments on
climate and sustainability activities
Change in risk
No change
Links to strategy
139
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
140
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
GOING CONCERN AND VIABILITY STATEMENT
GOING CONCERN
The budget aligns to the Guidance given on page 13. Under this budget, the
Group has significant liquidity and complies with all covenant tests to 26
October 2025. Our Guidance reflects current visibility of supply from key
brands and confirmed showroom refurbishments, openings and closures,
and excludes uncommitted capital projects and acquisitions which would
only occur if expected to be incremental to the business.
– Severe but plausible scenarios of:
– 20% reduction in sales against the budget due to reduced consumer
confidence and lower disposable income due to the cost-of-living challenges.
This scenario did not include cost mitigations which are given below
– The realisation of material risks detailed within the Principal Risks and
Uncertainties on pages 134 to 139 (including potential data breaches and
non-compliance with laws and regulations), and also environmental risks
highlighted on pages 114 to 117
Under these scenarios the net debt to EBITDA and the FCCR covenants
would be complied with.
– Reverse stress-testing of cash flows during the going concern period was
performed. This determined what level of reduced EBITDA and worst case
cash flows would result in a breach of the liquidity or covenant tests. The
likelihood of this level of reduced EBITDA is considered remote taking into
account liquidity and covenant headroom, as well as mitigating actions within
management’s control (as noted below) and that this would represent a
significant reduction in sales and margin from prior financial years.
– Should trading be worse than the outlined severe but plausible scenarios, the
Group has the following mitigating actions within management’s control:
– Reduction of marketing spend
– Reduction in the level of inventory holding and purchases
– Restructuring of the business with headcount and showroom operations
savings
– Redundancies and pay freezes
– Reducing the level of planned capex
The directors also considered whether there were any events or conditions
occurring just outside the going concern period that should be considered in
their assessment, including whether the going concern period needed to be
extended. The scenarios modelled by the directors confirmed the ability, under
the base and severe but plausible downsides, for the Group to repay the new
$115.0 million term facility at the end of the going concern period.
As a result of the above analysis, including potential severe but plausible scenarios
and the reverse stress test, the Board believes that the Group and Company is
able to adequately manage its financing and principal risks, and that the Group
and Company will be able to operate within the level of its facilities and meet the
required covenants for the period to 31 October 2025. For this reason, the
Board considers it appropriate for the Group and Company to adopt the going
concern basis in preparing the Consolidated Financial Statements.
The Directors consider that the Group has, at the time of approving the
Group Consolidated Financial Statements, adequate resources to remain in
operation for the foreseeable future and have therefore continued to adopt
the going concern basis in preparing the consolidated information.
On 9 May 2023, the Group signed a new five year £225.0 million multicurrency
revolving loan facility with lenders. The existing facilities were repaid and
extinguished on this date. Further, on 23 February 2024, the Group agreed a new
$115.0 million term facility agreement for use in relation to the Roberto Coin Inc.
acquisition. This facility was drawn down post year-end to allow cash settlement
of the acquisition consideration on 8 May 2024. As a result, the going concern
assessment has been carried out taking into account all facilities now in place.
The key covenant tests attached to the Group’s facilities are a measure of net
debt to EBITDA, and the Fixed Charge Cover Ratio (FCCR) at each April and
October. The facility covenants are on a pre-IFRS 16 basis and exclude share-
based payment costs. Net debt to EBITDA is defined as the ratio of total net
debt at the reporting date to the last 12 month Adjusted EBITDA. This ratio
must not exceed 3. The FCCR is the ratio of Adjusted EBITDA plus rent to the
total finance charge and rent for the 12 months to the reporting date. This ratio
must exceed 1.6. At 28 April 2024 the Group comfortably satisfied the covenant
tests with net debt to EBITDA being less than 3 and the FCCR exceeding 1.6.
At the balance sheet date, the Group had a total of £225.0 million in available
committed facilities, of which £115.0 million was drawn down. Net cash at this
date was £0.7 million with liquidity headroom (defined as unrestricted cash plus
undrawn available facilities) of £209.3 million. The UK bank facility of £225.0
million is due to expire in May 2028. The new $115.0 million term facility is a
12-month facility with two six-month extension options within the Group’s
control to bring the expiry date to February 2026. This facility did not increase the
year-end liquidity balance as its use was restricted to the acquisition of Roberto
Coin Inc. Further detail with regards to covenant tests and liquidity headroom can
be found in borrowings note 18 within the Consolidated Financial Statements.
In assessing whether the going concern basis of accounting is appropriate, the
directors have reviewed various trading scenarios for the period to 26 October
2025 from the date of this report. These included:
– The base case forecast which used the FY25 budget approved by the Board
in May 2024 and six-months of the Long Range Plan. These included the
following key assumptions:
– The more challenging trading environment of FY24 will continue into FY25
with improvement into FY26 in line with market sentiment
– Revenue forecast supported by expected luxury watch supply
– Increased cost base in line with macroeconomic environment and environmental
targets
– Inclusion of Roberto Coin Inc. results at historical levels
141
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
VIABILITY STATEMENT
In making the Viability Statement, the Board carried out a robust assessment of
the principal risks and uncertainties facing Group as described on pages 134 to
139. In addition to the uncertainties noted above, the key risks identified that
would have a material impact on the long-term viability of the Group were the
loss of a key supplier and the impact of a potential penalty for statutory breaches.
The scenarios assessed in relation to viability were:
– Severe but plausible scenarios of:
– 20% reduction in sales against the budget and Long Range Plan. This
scenario did not include cost mitigations which are given below
– The realisation of material risks detailed within the Principal Risks and
Uncertainties on pages 134 to 139 and environmental risks highlighted on
pages 106 to 122
These scenarios would still result in the net debt to EBITDA and the FCCR
covenants all being complied with
– Reverse stress-testing of this plan to determine what level of reduced
EBITDA and other possible cash outflows would result in a breach of the
lending requirements during the three-year period. This level of reduced
EBITDA and other possible cash outflows is considered to be remote
– The loss of a key supplier to the business. Whilst this scenario would
have a significant adverse impact on the Group, management consider
that the strength of the current supplier relationship combined with the
historic showroom investment and revenue growth achieved means that
this scenario is not plausible, and therefore would not result in a covenant
breach during the viability assessment period
– The severe impact of any statutory non-compliance has been evaluated and
would not result in a breach of the facility covenants
Whilst global economic factors could impact the Group, the long-term strategy
for value creation in the UK and US remains unchanged. The advantages of the
Group’s multi-channel operating model coupled with its scale and technological
expertise should enable the business to outperform the market, take market
share and capitalise on the material growth opportunities in the US.
The financial impact of actions being taken by the Group to achieve its climate
change commitment have been included in future cash flows and stress testing.
CONCLUSION
Based upon this assessment, the Directors confirm that they have a reasonable
expectation that the Group will be able to continue in operation to meet its
liabilities as they fall due over the three-year assessment period.
In accordance with Provision 31 of the UK Corporate Governance Code
2018 (the Code), the Directors are required to issue a Viability Statement
declaring whether the Directors believe the Group is able to continue to
operate and meet its liabilities over a period greater than 12 months, taking
into account its current position and principal risks.
ASSESSMENT OF PROSPECTS
The Directors have assessed the prospects of the Group by reference to its
current financial position, its recent and historical financial performance, its
forecasts for future performance, its business model (pages 26 to 27), strategy
(pages 34 to 37) and its principal risks and mitigating factors (pages 134 to 139).
In addition, the Board regularly reviews the financial position of the Group, its
liquidity and financial forecasts.
The Group’s FY25 budget was approved by the Board in May 2024. The FY25
budget has been used as the base for the first year of the viability assessment
period, and the Long Range Plan to FY28 is used for the outer years (excluding
uncommitted acquisitions). The budget aligns to the Guidance given on page 13.
ASSESSMENT PERIOD
The Directors have assessed the prospects of the Group over a three-year
period. This period is considered an appropriate timeframe to assess the Group’s
prospects and is consistent with the Group’s business model, strategic planning
period, management incentive schemes and medium-term financing considerations.
CURRENT FINANCING
On 9 May 2023, the Group signed a new five-year £225.0 million multicurrency
revolving loan facility with lenders. The existing facilities were repaid and
extinguished on this date. Further, on 23 February 2024, the Group agreed a
new $115.0 million term facility agreement for use in relation to the Roberto
Coin Inc. acquisition. This facility was drawn down post year-end to allow cash
settlement of the acquisition consideration on 8 May 2024. As a result, the
viability assessment has been carried out taking into account all facilities now in
place, and takes account of the repayment of the $115.0 million term loan on
expiry in February 2026.
The key covenant tests attached to the Group’s facilities are a measure of net
debt to EBITDA, and the Fixed Charge Cover Ratio (FCCR) at each April and
October. The facility covenants are on a pre-IFRS 16 basis and exclude share-
based payment costs. Net debt to EBITDA is defined as the ratio of total net
debt at the reporting date to the last 12 month Adjusted EBITDA. This ratio
must not exceed 3. The FCCR is the ratio of Adjusted EBITDA plus rent to the
total finance charge and rent for the 12 months to the reporting date. This ratio
must exceed 1.6. At 28 April 2024 the Group comfortably satisfied the covenant
tests with net debt to EBITDA being less than 3 and the FCCR exceeding 1.6.
During the three-year viability period, the Group anticipates that it will
comfortably comply with the net debt to EBITDA and FCCR covenants at each
six-month interval from October 2024 to April 2027.
ASSESSMENT OF VIABILITY
The strategic planning process reviewed by the Board is over a three-year
period. In determining the appropriate assessment period, the Board considered
the uncertainty regarding a number of global economic events, including the
level of inflation and the cost-of-living crisis, together with a number of
environmental matters.
During the normal cycle of strategic planning, budgets and forecasts are
approved by the Board at the end of each financial year.
APPROVAL OF STRATEGIC REPORT
Approved by the Board and signed on its behalf:
BRIAN DUFFY
CHIEF EXECUTIVE OFFICER
26 June 2024
142
CONTENTS
144 Corporate Governance at a Glance
146 Chair’s Introduction
148 Board of Directors
150 Corporate Governance Statement
151 Governance Framework
153 Governance in Action
154 Board Key Areas of Focus
161 Board Evaluation
162 Nomination Committee Report
165 Audit & Risk Committee Report
171 ESG Committee Report
176 Remuneration Committee Report
Fairness, Diversity and Wider Workforce Considerations
Directors’ Remuneration Policy at a Glance
Summary Remuneration Policy
Annual Report on Remuneration
192 Directors’ Report
2
CORPORATE
GOV ER NA NCE
REPORT
142
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
143 143
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
CORPORATE GOVERNANCE
AT A GLANCE
2
5
Balance of the Board
Executive
Directors
Non-Executive
Directors
Board Skills
Information technology
Internal audit and risk
International experience
Retail experience
ESG
Culture and stakeholders
Corporate finance
More than
3 years
0 – 1 years
1 – 3 years
Director Tenure
1
1
5
3
4
Female
Male
Balance of the Gender
Mixed/Multi
ethnic background
White
Board Members by Ethnicity
1
6
BOARD MEMBERS BY GENDER
BOARD MEMBERS BY ETHNICITY
BALANCE OF THE BOARD
DIRECTOR TENURE
BOARD SKILLS
14 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
BOARD AND COMMITTEE ATTENDANCE
Director
Board Audit & Risk Remuneration Nomination ESG
Held Attended Held Attended Held Attended Held Attended Held Attended
Ian Carter 6 6 n/ n/ 3 3 3 3 3 3
Brian Duffy 6 6 n/ n/ n/ n/ n/ n/ 3 3
Anders Romberg 5 5 n/ n/ n/ n/ n/ n/ n/ n/
Tea Colaianni 6 6 4 4 3 3 3 3 3 3
Baroness (Rosa) Monckton MBE 6 6 4 4 3 3 3 3 3 3
Robert Moorhead 6 6 4 4 3 3 3 3 3 3
Chabi Nouri 6 6 4 4 n/ n/ n/ n/ 3 3
Bill Floydd 1 1 n/ n/ n/ n/ n/ n/ n/ n/
1 Anders Romberg was appointed an Executive Director on 12 May 2023
2 Bill Floydd resigned as an Executive Director on 12 May 2023
MATTERS RESERVED FOR THE BOARD
Below is a summary of the key matters reserved for the Board. The full document can be viewed on the corporate website thewosgroupplc.com
STRATEGY AND MANAGEMENT
FINANCIAL REPORTING, RISK AND CONTROL
STAKEHOLDER ENGAGEMENT
CAPITAL ALLOCATION AND STRUCTURE
CORPORATE GOVERNANCE
PEOPLE AND LEADERSHIP
– Overall leadership of the Company
– Annual budgets and business plans
– The Group’s purpose, values and strategy, ensuring an alignment with
the Group’s culture
– Extension of the activities into new areas or territories and cessation
ofoperations of material parts
– Financial results and announcements relating thereto
– Policies and procedures to ensure independence and effectiveness
ofinternal and external audit functions
– External Auditor appointment or removal
– Establishing procedures to manage risk and oversee the internal
controlframework
– Matters requiring shareholder approval
– Circulars and significant shareholder communications
– Ensuring effective engagement and participation from stakeholders
– Description of stakeholder interests and how they were considered
in the Board’s decision-making process in the Annual Report and
Accounts
– Changes relating to the Group’s capital or material corporate
structure
– Major capital projects or property leases
– Significant acquisitions or disposals
– Changes to the Group’s management and control structure
– Dividend Policy and dividend payment recommendations and share
buy back decisions
– Delegation of authorities, including the division of responsibilities
between the Chair of the Board and the CEO and Delegated Levels
ofAuthority
– Policies and practices to ensure consistency with the Company’s
purpose, values and strategy
– Material Group policies and statements and any major changes
– Review of the Group’s overall corporate governance arrangements
– Board and Committee constitutions and Committee Terms
ofReference
– Appointment or removal of Directors and the Company Secretary
– Non-Executive Director fees
– Ensuring the Board and its Committees have a combination of skills,
experience and knowledge
145
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
CHAIR'S INTRODUCTION
IAN CARTER
Chair
Welcome to the Corporate Governance Report, which I am pleased to
present on behalf of the Board for the financial year ended 28 April 2024.
The Report that follows, in conjunction with the other Committee reports,
provides details of our robust governance and risk management, our effective
engagement with stakeholders and compliance with the principles and provisions
of the Corporate Governance Code 2018.
In January 2024, the Financial Reporting Council (FRC) published a revised
version of the UK Corporate Governance Code (CGC). Whilst for the most
part, the changes apply to financial years beginning on or after 1 January 2025,
the Board has been briefed on the changes and believes the Company has
applied and is able to confirm its compliance with the revised CGC, except for
the new substantive internal control changes, which will be complied with by the
deadline. The Company has developed a plan to implement these internal control
changes, pending release of the final guidance from the FRC, and we hope to be
able to report good progress in next years Annual Report and Accounts.
The Board believes that effective governance leads to better decision-making and
that the robust framework should be embedded within every level of the organisation.
The Board has been highly engaged this financial year and continued to oversee
and shape the strategic direction of the Group, ensuring the business remains
sustainable over the long-term and remains ready to respond to external factors
which may affect the business. With the continuing challenging macroeconomic
environment, it is essential for the Board to ensure appropriate governance is in
place to support the Executive Directors and senior management, in delivering
strategy, and to ensure the Group is in a strong position to take advantage when
the economic environment improves.
DIVERSITY AND INCLUSION
The Board continues to recognise the importance of diversity and inclusion,
including the benefits of recruiting leaders who reflect the diverse communities
which we serve, and society as a whole. The business achieved its highest ranking
to date in this year’s FTSE Women Leaders Review (number 10 in the FTSE 250
category) and continued to meet the Parker Review recommendations, which
sets a target for each FTSE 250 company to appoint at least one member of the
Board from a minority ethnic background by 2024. Additionally, the Company
aims to ensure that all teams (including senior management) represent the race
and ethnic mix of the markets in which we operate.
The Company is not only focused on diversity and inclusion at the top level of
the organisation but is committed to supporting work initiatives that promote a
culture of inclusion and diversity throughout the organisation.
Additional information on diversity in the boardroom can be found in the
Nomination Committee Report on page 164 and information on the wider
organisation can be found in the People Strategy section on pages 74 and 75.
Our succession planning and future recruitment considers diversity as set out in
our Board Diversity & Inclusion Policy, which can be found on our corporate
website thewosgroupplc.com.
146
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
continued
“The Board believes that
effective governance leads
to better decision-making
and that a robust framework
should be embedded within
every level of the organisation.”
IAN CARTER
CHAIR
ESG
The Company’s governance framework has been further enhanced this year, as
a result of progress made within the governance workstreams as part of the ESG
Strategy. This includes the Board approving a new Human Rights Policy and a
new Data Security and Information Security Statement, both of which can be
found on our corporate website thewosgroupplc.com.
Additionally, the Board was pleased to note a significant improvement in our
ESG Rating Agencies scores and particularly in relation to our ISS Governance
Quality Score.
STAKEHOLDER CONSIDERATIONS
The Board considers all relevant stakeholders during its decision-making
processes and continues to strengthen its understanding of the different key
stakeholder groups. Brand partner relationships and other key suppliers are
reviewed at each Board meeting and updates provided of activities undertaken.
Shortly after the end of FY24, the Board held one of its Board meetings in
Geneva – the home of Swiss watchmaking. This visit was the perfect opportunity
to meet with our key brand partners.
Baroness (Rosa) Monckton MBE, continues as our Designated Non-Executive
Director for Workforce Engagement, providing information to the Board on key
areas of interest and concern from our colleagues. Rosa’s attendance at the
Listening Forums, both UK and US, as well as our Global Listening Forum
ensures that the Board remains increasingly visible amongst our colleagues. After
each forum, Rosa reports back to the Board on her findings.
Rosa’s feedback, along with the annual Colleague Engagement Survey, helps us to
ensure that our colleagues’ perspectives are considered by the Board and
Committees during their decision-making processes.
More information on the Board’s decision-making, engaging with stakeholders,
as well as the interests of each of its stakeholders, can be found on pages 63 to
65 and 152 to 153.
BOARD CHANGES
As reported in the previous year’s Annual Report and Accounts, Anders
Romberg was appointed as the Chief Financial Officer in early May 2023, as Bill
Floydd stood down, as a result of challenges with his travel commitments.
ANNUAL GENERAL MEETING
I look forward to engaging with you at the forthcoming AGM which is scheduled
to take place on 3 September 2024, commencing at 2.30pm, and will be held at
36 North Row, London W1K 6DH. Full details including the resolutions to be
proposed to our shareholders can be found in the Notice of AGM, which will be
communicated to shareholders and made available on our corporate website
thewosgroupplc.com.
FOCUS FOR FY25
I am pleased to provide you with a clear outline of the work the Board has
undertaken during the year and how our governance and Board agendas are
aligned with the Group’s strategy.
IAN CARTER
CHAIR
26 June 2024
147
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
EXPERIENCED LEADERS
GUIDING OUR FUTURE
Yes No No
APPOINTED
BRIAN DUFFY
Chief Executive Officer
Executive Director
ANDERS ROMBERG
Chief Financial Officer
Executive Director
12 May 20237 May 20191 November 2020
Ian brings over 30 years of international
and retail experience, having held a
number of senior positions at
consumer-facing and luxury companies.
Ian currently serves as a non-executive
director with Servpro Industries, LLC,
owned by Blackstone, where he is the
Chair of the Audit Committee. Ian is
also a current director and Chair of
Eataly USA LLC. Ian joined Hilton
International as CEO in London in
2005 becoming an integral part of the
team that took Hilton Worldwide
private and then public in 2013. Prior
to joining Hilton, Ian served as an
Officer and President of Black &
Decker Corporation. Ian has significant
experience as a non-executive director
having served on a number of boards
in the UK and the US, including
Burberry Group PLC and Chair of the
Del Frisco Restaurant Group Inc.,
listed in the US.
Brian has served on several boards
across the fashion, retail and sports
sectors and has been the CEO of the
Group since 2014. Brian has previously
served on the boards of several
subsidiaries of Ralph Lauren, as well as
the board of Celtic PLC. Brian is an
ICAS Chartered Accountant and
holds an Honorary Doctorate from
Glasgow Caledonian University.
Brian is the Chair of The Watches of
Switzerland Group Foundation and
was appointed as the Chair of the
Prince’s Trust Retail, Leisure and
Hospitality Fundraising Leadership
Group in January 2023.
Anders was reappointed to the Board
in 2023 as Chief Financial Officer.
Anders was previously the CFO at the
Watches of Switzerland Group from
2014 to 2022, transforming the
business globally and taking the
Company from private to public.
Before this, Anders was with at Ralph
Lauren serving as Chief Financial
Officer and Chief Operating Officer
for Europe, Middle East and Africa,
and Chief Operating Officer for Asia
Pacific. Anders has previously held
senior finance roles at Gillette and
Duracell.
– Nomination (Chair)
– Remuneration
– ESG
– ESG
Servpro Industries, LLC
Eataly USA LLC
The Watches of Switzerland Group
Foundation
None
COMMITTEE MEMBERSHIP
INDEPENDENT
PRINCIPAL EXTERNAL
APPOINTMENTS
Ian brings to the Board a wealth of
international and retail experience and
a deep understanding of the global
luxury industry. Ian has considerable
experience in the understanding of
matters of a strategic nature. Ian also
has significant experience as a non-
executive director.
Brian brings to the Board significant retail
and international experience, financial
acumen and in-depth understanding of
the global luxury watch and jewellery
sector. Brian’s corporate experience is
relevant to the governance of a listed
company and includes culture and
stakeholder considerations.
Anders brings to the Board extensive
experience at senior management
level of accounting and operational
matters, including IT and cyber, and
has extensive experience in the
international luxury retail sector.
RELEVANT SKILLS
AND EXPERIENCE
IAN CARTER
Chair
148
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
BOARD OF DIRECTORS
Yes Yes Yes Yes
TEA COLAIANNI
Senior Independent Director
Non-Executive Director
BARONESS (ROSA)
MONCKTON MBE
Independent Designated
Non-Executive Director for
Workforce Engagement
ROBERT MOORHEAD
Independent Non-Executive
Director
CHABI NOURI
Independent Non-Executive
Director
Tea was appointed as a Non-Executive
Director and Chair of the Remuneration
Committee in December 2018 and
Senior Independent Director of the
Company in May 2019. Tea has more
than 30 years’ experience in consumer
facing industries and has served as a
non-executive director on multiple
boards. She currently serves on the
board of SD Worx NV. Tea is the
Founder and Chair of WiHTL –
Diversity in Hospitality, Travel and
Leisure and Diversity in Retail (DiR).
Rosa has over 20 years’ experience in
the luxury jewellery and watch
sectors, and was appointed as a Non-
Executive Director in 2014. Her
experience includes setting up Tiffany
& Co in the UK, and serving as Chief
Executive Officer and then Chair of
Asprey & Garrard. Rosa also has
experience in the charity sector, and
campaigns on behalf of disabled
children and adults, through her role
as Chair of Team Domenica.
Rosa was granted peerage in January
2024 for her work as a charity founder
and advocate for inclusion and equal
opportunity for people with special
educational needs.
Robert has significant experience in
the retail sector and was appointed as
a Non-Executive Director in 2018.
Robert currently serves as Chief
Financial Officer and Chief Operating
Officer of WH Smith PLC, and was
previously Finance Director at
Specsavers Optical Group and Finance
and IT Director at World Duty Free
Europe Limited. Robert is an ICAEW
Chartered Accountant.
Chabi has over 20 years’ experience in
the luxury jewellery and watch sectors
and was appointed as a Non-Executive
Director in 2022. Chabi has particular
experience in the jewellery sector for
marketing and merchandising, being
responsible for Cartier’s creative and
fine jewellery collections and in
watches serving as the Chief Marketing
Officer of Piaget, Chabi was appointed
as Chief Executive Officer of the
company in 2017. Chabi is currently a
non-executive director of Lucid
Group, Inc, an automotive and luxury
consumer goods business listed on the
US Stock Exchange, Group Marketing
and Communications Head at
Mirabaud Group and director and
Chair of EveryWatch DMCC.
– Audit & Risk
– ESG
– Nomination
– Remuneration (Chair)
– Audit & Risk
– ESG (Chair)
– Nomination
– Remuneration
– Audit & Risk (Chair)
– ESG
– Nomination
– Remuneration
– Audit & Risk
– ESG
SD Worx NV
Team Domenica
WH Smith PLC Mirabaud Asset Management.
Lucid Group, Inc
EveryWatch DMCC
Robert brings to the Board extensive
experience in the retail sector as well
as recent relevant and up to date
financial and information technology
and cyber experience which enables
him to carry out his role as Chair of
the Audit & Risk Committee.
Chabi brings to the Board significant
international experience of the luxury
watches and jewellery retail industry.
Chabi has relevant experience and
acumen in strategic matters.
Tea brings to the Board a wealth of
experience in HR strategy governance
and consumer facing industries as well
as extensive DEI expertise. Tea has
significant experience as a non-
executive director including extensive
and current experience of all
remuneration matters which enables
her to carry out her role as Chair of
the Remuneration Committee.
Rosa brings to the Board significant
experience of the luxury jewellery and
watch industry. Rosa’s ESG experience
includes diversity and inclusion initiatives
and a deep understanding of the charity
sector, this enables Rosa to carry out
her role as Chair of the ESG Committee.
7 May 2019 1 May 20227 May 20197 May 2019
149
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
CORPORATE
GOVERNANCE
STATEMENT2024
This Corporate Governance Statement
explains key features of the Group’s
governance structure and how the Group
measures itself against the standards set
out in the UK Corporate Governance Code
208 (the Code), as required by the Listing
Rules of the Financial Conduct Authority,
the accepted standard of good governance
practice in the UK. A copy of the Code can
be found on the Financial Reporting Council’s
website at www.frc.org.uk.
We believe that good governance provides
the framework for stronger value creation and
lower risk for shareholders. It is the Board’s
responsibility to instil and maintain a culture
of openness, integrity and transparency
throughout the business, through our actions
and conduct, policies and communications.
We apply corporate governance guidelines in
a way that is relevant and meaningful to our
business and consistent with our culture and
values. If we decide that the interests of the
Company and its shareholders can be better
served by doing things in a different way, we
will explain the reasons why.
CORPORATE GOVERNANCE STATEMENT
UK CORPORATE GOVERNANCE CODE 2018
DIVISION OF
RESPONSIBILITIES
2
BOARD LEADERSHIP
& COMPANY PURPOSE
3
COMPOSITION,
SUCCESSION &
EVALUATION
4
AUDIT, RISK
MANAGEMENT &
INTERNAL CONTROL
5
REMUNERATION
READ MORE:
Page 152
READ MORE:
Page 156
READ MORE:
Page 158
READ MORE:
Page 160
READ MORE:
Page 160
STATUTORY INFORMATION
Disclosures required by the Disclosure Guidance and Transparency Rules DTR 7.2.6 with regard to share
capital are presented in the Directors’ Report on page 195. Disclosures required by DTR 7.2.8 relating to
diversity policy are presented in the Nomination Committee Report on page 164. Information concerning
diversity and ethnicity as required under Listing Rule 9.8.6R(10) can be found on page 158 and in the
Nomination Committee Report on page 164.
Statutory information Section of report Page
Internal control and risk management Risk Management 160
Securities carrying special rights with regard to the
control of the Company
Directors’ Report 195
Restrictions on voting rights Directors’ Report 195
Appointment and replacement of Directors and
amendments to the Company’s Articles
Directors’ Report 193
Powers of the Company’s Directors relating to
transactions in own shares
Directors’ Report 195
Purpose, values and culture Environmental, Social and Governance 66
UK CORPORATE GOVERNANCE CODE 2018 COMPLIANCE
The Company’s obligation is to state whether it has complied with the relevant provisions of the Code, or
to explain why it has not done so (up to the date of this Annual Report and Accounts).
The Board confirms that, throughout the year, the Company has applied the principles, both in spirit and in
form, and complied with the provisions set out in the issued by the Financial Reporting Council (FRC) in July
2018. The Company’s governance arrangements have been considered alongside the Code. The information
set out in the Corporate Governance Statement and the Directors’ Report on pages 151 to 197, including
the various Board Committee Reports (on pages 162 to 191), is intended to provide an explanation of how
the Code’s principles were applied practically throughout theyear.
BOARD APPROVAL FOR THE CORPORATE GOVERNANCE STATEMENT 2024
This Corporate Governance Statement is approved by the Board and signed on behalf of the Board by the
Chair and by the Company Secretary.
IAN CARTER LAURA BATTLEY
CHAIR COMPANY SECRETARY
26 June 2024 26 June 2024
150
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
continued
NOMINATION COMMITTEE
Undertakes an annual review of
Board appointments, the talent
pipeline and succession planning.
Ensuring that the membership and
composition of the Board,
including the combination of skills
and diversity, remains appropriate.
BOARD COMMITTEES
The Terms of Reference for each Committee are documented and agreed by the Board. They are annually reviewed and where necessary updated and are
available on the corporate website thewosgroupplc.com.
The key responsibilities of each Committee are set out below.
KEY STEERING GROUPS, SUB COMMITTEES AND WORKING GROUPS
Underneath the Trading Board, there are a number of key steering groups made up of senior management and other colleagues, who are tasked with
delivering key projects or ensuring compliance and the monitoring of risks within important business areas including; ESG; cyber security; data; Europe;
Xenia; and Health & Safety. There are also a number of functional working groups which support the Steering Groups. For further information on the ESG
Governance Framework see page 71.
REMUNERATION COMMITTEE
Determines the policy for
remuneration, bonuses, long-term
incentive arrangements, contract
terms and other benefits in
respect of the Executive Directors,
the Chair, the Company Secretary
and General Counsel and senior
management. Reviews workforce
remuneration and related policies.
EXECUTIVE DIRECTORS
The Executive Directors are the CEO and the CFO who are responsible for the day-to-day operational running of the business.
Further information on their respective roles and responsibilities can be found on page 152.
TRADING BOARD
The CEO has delegated authority for the day-to-day management of the business to operational management comprising the CFO, the Company
Secretary and General Counsel and members of senior management who have responsibility for their respective areas.
The Trading Board meets weekly and considers key business matters including weekly trading, capital expenditure and business reviews whilst also focusing
on risk management of the business areas, Xenia development, people matters, strategy preparation and implementation, merchandising and specific areas
of training, such as, competition compliance.
BOARD
The Board of Directors is led by the Chair.
The Board is collectively responsible for the long-term success of the Company and the Group. The business of the Group is managed by the Board who may
exercise all the powers of the Company. The Board delegates certain matters to the Board Committees, and delegates the detailed implementation of matters
approved by the Board and the day-to-day operational aspects of the business to the Executive Directors and other members of senior management. There is
a schedule of matters specifically reserved for the Board which and are available on the corporate website thewosgroupplc.com
SHAREHOLDERS
ESG COMMITTEE
Provides oversight on behalf of the
Board in relation to the Group’s
ESG Strategy and activities, oversees
any ESG strategic goals, targets and
Key Performance Indicators.
AUDIT & RISK COMMITTEE
Reviews and reports to the Board
on the Group’s financial reporting,
internal control and risk
management systems and the
independence and effectiveness of
the External Auditor. Reviews and
approves the responsibilities of the
Internal Audit function and ensures
the necessary resources and access
to information are in place.
Nomination Committee Report
on pages 162 to 164
Audit & Risk Committee Report
on pages 165 to 171
Remuneration Committee Report
on pages 175 to 191
ESG Committee Report
on pages 172 to 174
GOVERNANCE FRAMEWORK
The Board facilitates the operation of an open and straight-forward culture without complex hierarchy and over-delegation
ofresponsibilities. The structure of the Board and its governance framework is set out below.
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There is a clear division of responsibilities between the Chair and the CEO, which is set out in writing and has been agreed by the Board. This can be found
on our corporate website at thewosgroupplc.com.
The Board biographies are included on pages 148 and 149.
KEY ROLES AND RESPONSIBILITIES
Chair – Responsible for the operation, leadership and governance of the Board
– Sets the Board agenda and ensures sufficient time is allocated to ensure effective debate to support sound
decision-making
– Ensures the Board is fully informed of all matters and receives precise, timely and clear information sufficient to
make informed judgements
– Ensures each Non-Executive Director makes an effective contribution to the Board
– Meets with the Non-Executive Directors independently of the Executive Directors
Chief Executive Officer – Management of the day-to-day operations of the Group
– Develops the Group’s strategic objectives for consideration and approval by the Board
– Implements the strategy approved by the Board
– Leads the Trading Board and senior management
– Manages the Company and the Group
– Ensures effective and ongoing communication with investors
Chief Financial Officer – Manages all aspects of the Group’s financial affairs
– Works with the CEO to develop and implement the Group’s strategic objectives
– Delivers the financial performance of the Group
– Ensures the Group remains appropriately funded to pursue its strategic objectives
– Ensures proper financial controls and risk management of the Group and compliance with associated regulation
– Ensures effective and ongoing communication with investors
Senior Independent Director – Acts as a ‘sounding board’ for the Chair and serves as an intermediary for the other Directors where necessary
– Leads the Non-Executive Directors in their annual assessment of the Chair’s performance
– Available to investors if they have concerns which the normal channels through the Chair, CEO or other Directors
have failed to resolve
Non-Executive Directors – Are all independent, experienced and influential individuals from a diverse range of industries, backgrounds and
countries
– Provide constructive contribution and challenge to the Executive Directors regarding the development of the strategy
– Scrutinise the operational and financial performance of senior management
– Monitor the integrity of financial information, financial controls and systems of risk management
– Devote such time as is necessary to the proper performance of their duties
Designated Non-Executive
Director for Workforce
Engagement
– Gauges the views of colleagues and identifies any areas of concern
– Ensures the views and concerns of the workforce are taken into account by the Board, particularly when they are
making decisions that could affect colleagues
– Ensures the Board takes appropriate steps to evaluate the impact of proposals and developments on colleagues and
considers what steps should be taken to mitigate any adverse impact
Company Secretary and
General Counsel
– Supports the Board and its Committees with their responsibilities and ensures information is made available to
Board members in a timely fashion
– Supports the Chair in setting Board agendas, designing and delivering Board inductions and Board evaluations and
co-ordinates post-evaluation action plans
– Advises on regulatory compliance and corporate governance matters
– Ensures compliance with the Board’s procedures and with applicable rules and regulations
– Communicates with investors and organises the AGM
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continued
One of the Watches of Switzerland’s Group’s strategic priorities is to grow
revenue, profit and return on capital employed. We achieve this through
disciplined investment in growth opportunities and achieving; improved
operating margins; increased shareholder returns; and delivering profitable
sales growth. During FY24, the Board considered and approved the acquisition
of 15 luxury watch Ernest Jones showrooms from the Signet Group. The
Board received regular updates on the acquisition from initial discussions
through to signing and completion. The Board discussed acceptable transaction
parameters and the Group’s risk appetite, as well as discussing the benefits
and challenges the acquisition would bring to the business. The Board
considered the impact on each of the Group’s key stakeholders. Following the
acquisition, the Board continues to receive updates, from management, on the
integration of the business and colleagues into the Group. The Board will also
receive a full financial review, integration and ‘lessons learned’ update from
senior management as part of the 12-month review of the acquisition.
The Watches of Switzerland Group has established strong and long-standing
relationships with our brand partners. We retail the most prestigious and
recognised luxury watch and jewellery brands.
The Board plays a critical role in setting the Group’s strategic objectives and
ensuring they are delivered, enabling the Group to expand, grow and develop.
During FY24, the Board reviewed the luxury branded jewellery strategy and
considered how to best grow the business. The particular focus is on branded
jewellery and developing the jewellery business which is now a core pillar of
the Group’s growth strategy. The promotion and business growth of luxury
jewellery was consolidated by the publication of the Long Range Plan to 2028.
Eric Macaire, Executive Director, Global Buying and Merchandise, who joined
the Group in January 2023, presented an initial updated strategy to the Board
in July 2023. Management had identified this as a key area of growth as, it was
management’s belief, the Group was under-developed in this exciting category
and perfectly positioned to leverage the Group’s proven model in elevating
luxury watch brands in order to expand, offer and enhance partnerships
with luxury jewellery brands. The benefit from the potential in the luxury
branded jewellery category is believed to be dynamic with significant long-
term growth expectations.
ACQUISITION OF 15 LUXURY WATCH ERNEST JONES SHOWROOMS
LUXURY BRANDED JEWELLERY STRATEGY
In considering the transaction, the Board identified and assessed the impact
on stakeholders as part of its decision-making process. These included:
– Investors: increased revenue, profits and market share in the UK luxury
watch and jewellery market. Rigorous commercial and financial evaluation
to analyse return on investment
– Colleagues: experienced skills brought in-house as a result of colleague
transfers. The need for training and integration to ensure alignment with
group client services offering and culture
– Brand partners and other suppliers: further extending brand partner
relationships
– Clients: offering an increased number and choice of locations, and online
and of product; benefits of embedding the Group’s Xenia, Client
Experience Programme into the showrooms; enhanced offering of
aftercare and servicing
In considering the strategy, the Board identified and assessed the impact on
stakeholders as part of its decision-making process. Some of those
considerations were as follows:
– Investors: the Board considered the long-term growth opportunities for
revenue and also had regard to the Group being able to provide a more
enhanced product selection
– Colleagues: additional skills required in retail and in Support Centres to
support the ambition, either by mean of training, resources alignment
orrecruitment
– Brand partners and other suppliers: enhancing current relationships and
developing new relationships with a number of new and exclusive luxury
jewellery brand offerings
– Clients: offering an increased choice of product, including elevated luxury
jewellery brands and curated luxury jewellery in exclusive locations;
benefits of embedding the Company’s Xenia Client Experience Programme
into the showrooms; and offering an opportunity to purchase online
– Communities: circularity and traceability are both important to the Board.
Our ESG Strategy supports the sustainability aspect of sourcing jewellery
and we conduct factory audits in selected areas of our business every year
GOVERNANCE IN ACTION
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Link to
strategy
Relevant stakeholders
considered
Strategy – Approved strategy, considering progress against the Long Range Plan and
prioritising strategic areas of focus
– Approved the Long Range Plan to FY28
– Reviewed the evolving strategy for repairs and pre-owned products
– Reviewed the enhanced jewellery strategy
– Considered key strategic matters, including emerging trends, client behaviour
and future expectations, and brand relationships
– Received reports from the CEO and CFO, including progress against
strategic objectives, from each business area, on trading, business
performance, financing and strategy implementation
– Approved the acquisition of 15 luxury watch Ernest Jones showrooms
– Approved progression of discussion, which subsequently led to the
acquisition of Roberto Coin Inc.
– Approved various US business development activities, including showroom
relocations for Plano, Texas and Atlanta, Georgia
– Conducted a 12-month review of the opening of showrooms and ongoing
business in Europe
Performance – Reviewed regular updates on business performance by market, and territory
including brand performance
– Received progress updates for the showroom portfolio development,
including refurbishment of the showrooms, luxury jewellery elevation
– Reviewed business performance KPIs at each meeting
– Timely update to the Market of trading conditions and FY24 guidance
following trading over the holiday season
Finance – Approved the renewal of the Group financing arrangements including the
facility entered into for the Roberto Coin Inc. acquisition
– Approved the FY25 Group budget, business plan and material capital
expenditure projects
– Scrutinised on an ongoing basis, performance against budget and forecasts
– Reviewed capex and payback on showroom refurbishments, showroom
openings and acquisitions
Leadership, people,
values and culture
– Received an update on the People Strategy which included diversity, equity
and inclusion
– Considered culture and reviewed the purpose and values as part of the People
Strategy outcomes
– Considered feedback from colleagues including, Listening Forums and the annual
Colleague Engagement Survey with associated proposed action plans
– Considered succession planning for the Board and senior management
– Annual review and approval of an enhanced Board Diversity & Inclusion Policy
– Approved a new Human Rights policy
– Considered the results of a Demographics Capture Survey
– Reviewed the operational element of the Long Range Plan, including People, Xenia
and Marketing
– Reviewed the UK Retail Transformation project, including the retail organisational
structure
– Approved the annual Gender Pay Gap Report
BOARD KEY AREAS OF
FOCUS IN FY24
The following table summarises the key areas focus for the Board during the year. This table should be read in conjunction with
‘Howwe engage with our stakeholders’ on pages 63 to 65.
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CORPORATE GOVERNANCE REPORT
continued
STRATEGIC PRIORITIES
Grow revenue, profit and
Return on Capital Employed
Enhance strong brand partnerships
Deliver an exceptional client service
Drive client awareness and brand image
Leverage best-in-class operations
Expand our multi-channel leadership
Continue to advance the ESG agenda
STAKEHOLDERS
Clients
Colleagues
Brand partners and other suppliers
Investors
Communities
Link to
strategy
Relevant stakeholders
considered
Environment and
community
– Reviewed progress of the ESG Strategy, key metrics and targets
– Reviewed and approved the annual Modern Slavery Statement and the
Environmental Policy
– Agreed the continued support of The Watches of Switzerland Group
Foundation, noting the evolution of the strategy with regard to charity
partnerships and initiatives
– Agreed scope and considered the progress of the ESG Materiality
Assessment
– Received updates on climate change, the Group’s carbon road map, the
Group’s targets and net-zero GHG emissions ambition
Governance and
corporate
responsibility
– Approved the appointment of the new Chief Financial Officer
– Conducted the annual Board Evaluation in respect of the effectiveness of the
Board and its Committees and discussed the output of the review
– Reviewed the changes published for the 2024 UK Corporate Governance
Code
– Approved Group policies, including Competition Compliance, Code of
Ethics, Anti-Bribery, Corruption & Fraud, Anti-Money Laundering, Human
Rights (new) and Data Protection & Information Security Statement (new)
Risk management
and internal controls
– Considered principal and emerging risks, including any changes to the risk
profile
– Approved the Group’s risk appetite
– Approved the effectiveness of the Group’s systems of internal control and risk
management framework
– Conducted a review of the Group’s cyber security programme and maturity
assessment, including risks and mitigation
– Noted the change in insurance brokers and approved the renewal terms of the
2024 Insurance programme, including cover for the Directors and Officers Liability
Stakeholder
engagement
Brand partners and other suppliers:
– Regular updates on brand performance, relationship, supply and engagement
– Attended a product review for luxury watches, market trends, new lines and
exclusives and how they support the Long Range Plan and strategic
objectives, including a brand deep dive
Investors:
– Received regular investor relations updates
– Received external presentations from corporate brokers
Colleagues:
– Received feedback from the Designated Non-Executive Director for
Workforce Engagement, senior management and colleague Listening Forums
– Received feedback, regarding diversity, equity and inclusion including from the
Diversity Council
Clients:
– Received feedback from President of UK & Europe and President of North
America & Deputy CEO on clienteling, exhibitions and events and client
entertainment initiatives
– Reviewed updates on how Xenia is being further embedded into the support
teams
– Received statistics on client surveys
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BOARD LEADERSHIP AND COMPANY PURPOSE
THE ROLE OF THE BOARD
The Board provides leadership to the Group and is collectively responsible for
promoting its long-term success and for delivering sustainable value to all stakeholders.
The Board ensures there is a sound system of internal control and risk
management in place (including financial, operational and compliance controls)
and ensures the overall effectiveness and maintenance of those systems.
The Board is supported by a number of Committees, to which it has delegated
certain powers. The role of these Committees, their membership, responsibilities
and activities, during the year, are detailed on pages 162 to 191.
Some decisions are sufficiently material or important to the Group’s business
that they can only be made by the Board as a whole. There is a Schedule of
Matters Reserved for the Board (Reserved Matters), which contains items
reserved for the Board to consider and approve, relating to strategy and
management, material contracts, financial reporting and controls, internal
controls and risk management, Board membership and succession planning,
corporate governance, structure and capital, and delegation of authority. In
addition to the Reserved Matters, each Board Committee has written Terms of
Reference defining its role and responsibilities. The Reserved Matters and the
Terms of Reference of the Board Committees can be found on our corporate
website, thewosgroupplc.com. Further details regarding the role and activities of
the Board can be found on pages 152 to 155.
The Reserved Matters and the various Committees’ Terms of Reference are
reviewed annually, updated as appropriate and approved by the Board.
To support with stakeholder considerations and engagement, the Board has
received updates on its roles and responsibilities, including its duties under the
Companies Act 2006 and, in particular, is equipped to consider S172(1) of the
Companies Act 2006 when decision-making for the Group.
Group policies and processes have been drafted with these duties in mind and
to ensure that there is a culture of stakeholder engagement within the Group.
The Company’s purpose and values can be found on page 66.
The Company Secretary and General Counsel ensures that as the Board makes
decisions, the impact on any of the stakeholder groups is considered.
BOARD AND COMMITTEE ATTENDANCE
In addition to the six scheduled meetings, the Board held four additional meetings
during the financial year to review the quarterly Trading Updates and delegate to
the Disclosure Committee for the final approval. A number of ad hoc meetings
were also held to cover approvals which arose outside of the scheduled meetings.
A half day Board strategy session was held during one of the Board meetings
which focused on those matters which the Chair considered to be strategically
important to the Group going forward.
The Board held one of its meetings in the new Support Centre in Leicester and
a meeting in one of the London showrooms. The Board also held a meeting in
Geneva, the home of Swiss watchmaking, in May 2024, shortly after the financial
year-end.
The table on page 145 indicates the number of scheduled Board and Committee
meetings, and attendance, during the financial year.
During the year, the Non-Executive Directors held three meetings without the
Executive Directors present. The Chair also regularly maintains dialogue with
each of the Non-Executive Directors outside of formal meetings.
BOARD SKILLS AND EXPERIENCE
It is essential to have an appropriate mix of skills, experience, diversity and
independence on the Board. Such diverse attributes enable the Board, as a whole,
to provide informed opinions and advice on strategy and relevant topics, thereby
discharging its duty of oversight. Appointments to the Board are made following
consideration of the experience and expertise of existing Directors, any required
skill sets or competencies, and the strategic requirements of the Company.
The principles of the UK Corporate Governance Code 2018 (the Code) are
embodied in both the Board and the Nomination Committee’s approach to
Board performance and succession planning. The Nomination Committee goes
through a continuous process of evaluating the skills and experience required.
Last year, the Nomination Committee facilitated a skills survey, which was
repeated in FY24, the results of which can be found on page 145. The results of
the survey will be continually assessed and taken into consideration by the Chair,
during discussions on succession planning.
INFORMATION AND SUPPORT
The Board discharges its responsibilities through an annual programme of Board
meetings. Papers and presentations are given to the Board (and its Committees)
to focus its oversight on key areas of the business. This information helps to
facilitate effective decision-making and input, and aids the Board’s oversight and
awareness of business performance or routine good governance practices
operated by the Company. A selection of principal decisions taken by the Board
and how the interest of relevant stakeholders were taken into account are set
out in summary on pages 154 and 155.
Full and timely access to all relevant information is given to the Board in advance
of meetings. For Board meetings, this consists of a formal agenda, minutes of
previous meetings and a comprehensive set of papers including regular
operational and financial reports. Where ad hoc meetings are required, outside
of the scheduled meetings, the Board is sent documents in advance, for
consideration and approval.
All Directors have the right to have their opposition to, or concerns over, any
Board decision noted in the minutes. Directors are entitled to take independent
professional advice at the Company’s expense in the furtherance of their duties,
where considered necessary.
All Directors have access to the advice and services of the Company Secretary
and General Counsel.
PURPOSE, VALUES AND CULTURE
As set out in the Reserved Matters, the Board is responsible for establishing the
Company’s purpose and values and ensuring these and the Company’s culture
are aligned. The Board monitors culture and seeks to ensure that business
practices, policies and behaviours are aligned and embedded within the
Company’s purpose, values and culture. During the year, the Executive Director
HR updated the Board on the implementation of the People Strategy, which was
introduced in the prior year and how it was being embedded into the
organisation. As part of the presentation, the Board considered culture, and the
aim to further develop a high performing culture environment which would
support the long-term success of the Company.
The Board recognises the importance of ensuring a positive and supportive
culture throughout the Group which it believes can lead to organisational resilience
and superior performance. Culture is monitored through direct and indirect
colleague engagement activities and discussions with the Executive Directors, the
Executive Director HR, the Designated Non-Executive Director for Workforce
Engagement and other members of senior management. For further information
see further information in the People Strategy on pages 72 to 85.
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CORPORATE GOVERNANCE REPORT
continued
Through the following activities we ensure the Company’s culture aligns with its
purpose and values:
– Dedicated time at Board meetings for culture, people and workforce matters
– Reviewing the results of the annual Colleague Engagement Survey including
inclusion
– Monitoring the levels and nature of whistleblowing reports
– Monitoring colleague turnover and retention and other key performance
indicators
– Reporting by Internal Audit on fraud and compliance breaches to the Audit &
Risk Committee
– Engaging with colleagues directly during showroom and Support Centre
visits, including a Board meeting being held at the UK Support Centre
– Reviewing the Group’s key policies and HR initiatives
– Listening Forum updates
– Being updated on the Diversity Council meetings and actions
During the year, we continued with our colleague engagement activities, including
the Group’s UK, US and Global Listening Forums. These forums bring together
colleague representatives, Executive Directors and our Designated Non-
Executive Director for Workforce Engagement. In creating these forums we
have ensured that we have proportionate representation from all areas of our
business and territories, in which we operate. Topics discussed included: the
developing jewellery strategy and what role it will have within the Group; results
of the recent annual Colleague Engagement Survey and how improvements can
be made in future years.
The Board takes responsibility for all the Group policies which are applicable to
our colleagues, and further information can be found on page 129.
STAKEHOLDER ENGAGEMENT
Our s172(1) Companies Act 2006 Statement includes details on how the Board
has had regard to the need to foster the Company’s business relationships and
includes a Statement of Engagement with Colleagues. More information about
the Board’s engagement with its colleagues, clients, brand partners and other
suppliers, communities and investors can be found on pages 62 to 64.
Understanding the views of the Company’s stakeholders is a key priority for the
Board and the business as a whole. It helps to focus the Company’s resources,
engagement and reporting activities by addressing those issues that matter most to
the Group’s businesses and to the Company’s wider stakeholders. Fostering strong
business relationships is an intrinsic part of the Company’s long established and
successful compounding strategy and a key consideration in all decision-making.
We understand that our business can only grow and prosper responsibly over
the long-term if we understand and respect the views and needs of our
stakeholders including colleagues, clients, and the communities in which we
operate, as well as our brand partners and other suppliers and investors, all of
whom we are accountable to. Knowing who our stakeholders are and what
interests them enables us to manage their expectations and deliver upon their
requirements. We ensure effective communication with all stakeholder groups
by identifying key personnel who manage the relationships with them.
Further details on the key stakeholders identified can be found on page 62.
ENGAGING WITH INVESTORS
We welcome the opportunity to engage with our investors. The Chair has
overall responsibility for ensuring that the Company has appropriate channels of
communication with all of its investors and is supported in this by the Executive
Directors, the Group Finance and Investor Relations Director, the Company
Secretary and General Counsel and members of the senior management team.
We are in frequent contact with investors through a scheduled programme of
communications and engagements.
The Board organises and directs the Group’s affairs in a way that it believes will
help the Group succeed for the benefit of its members as a whole, whilst having
regard to each of its stakeholders. The Board seeks to ensure that it acts fairly
between all members and considers both institutional investors and private
shareholders when making decisions that impact them.
The Group ensures that it communicates the information that investors require,
using traditional methods such as the Annual Report and Accounts, Trading
Updates, RNS newswires, corporate press releases and in-person meetings.
Engagements include various investor meetings attended, as appropriate, by the
Chair, CEO, CFO, Group Finance and Investor Relations Director and the Head
of Sustainability and ESG. A summary of meetings and communications with
investors is provided at each Board meeting.
During the year, the Company’s corporate brokers provided regular feedback to
the Board and attended two meetings. The CEO, CFO and the Group Finance
and Investor Relations Director provide information to the Board, at each
meeting, on topics such as share price performance and macroeconomic
conditions. Feedback is also provided to the Board on the views of investors
following individual meetings, relating to the following:
– Particular elements of the Company’s strategy and operations; progress on
specific projects, financial performance, product development and risks
– ESG issues that affect our stakeholders, such as the environment, climate change,
working conditions and relationships with brand partners and other suppliers
– Governance issues, particularly on remuneration, but also succession
planning, board diversity and expertise and independence
– Capital allocation plans for the future
– Progress against the Long Range Plan to FY28
– Acquisition plans, including Ernest Jones and Roberto Coin Inc.
Additionally the Board received a session from JP Morgan which provided them
with insight into what investor priorities were with regard to ESG matters. An
ESG Materiality Assessment was held during the year to help better gauge the
Company’s stakeholders priorities and further details can be found within the
ESG section on page 70.
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COMPOSITION, SUCCESSION AND EVALUATION
COMPOSITION
The Board is comprised of a Non-Executive Chair, two Executive Directors, the
Senior Independent Director and three independent Non-Executive Directors,
and is supported by the Company Secretary and General Counsel.
The Board appointed Anders Romberg as the Chief Financial Officer with effect
from 12 May 2023, Bill Floydd stood down as the CFO at the same time.
Biographical details of the current Directors of the Company as at the date of
this report are set out on pages 148 and 149. Full details of Directors who have
served throughout the year can be found on page 193.
DIVERSITY AND INCLUSION
The Company is committed to having a Board comprising directors from
different backgrounds, with diverse and relevant experience, perspectives, skills
and knowledge. We believe that the Board can only adequately represent all of
its stakeholder groups in the boardroom if collectively, it has the skills, experience
and background to reflect them. We believe that diversity contributes towards
a high performing and effective Board, and this is considered in all recruitment
and succession planning discussions and we fully support the aims, objectives and
recommendations outlined by the FTSE Women Leaders Review and the
ParkerReview.
The Company is pleased to report that as at 28 April 2024, the Board met the
targets set out in the FTSE Women Leaders Review and the Parker Review and,
has also met the targets set out in the UK Listing Rules 9.8.6.
Further information on the Company’s targets can be found in the Nomination
Committee Report on page 164.
All Board appointments are based on merit, and candidates are considered
against objective criteria and with due regard for the benefits of diversity on the
Board. As well as experience and track record, Board appointments will be
made taking due account of other criteria, such as curiosity, insights, engagement,
cultural contribution, personal identity, and the differentiation that they could
bring to the collective make-up of the Board.
In May 2024, the Nomination Committee reviewed the Board Diversity &
Inclusion Policy which was updated, as per the recommendations of the Parker
Review and clarification of the reporting requirement of the UK Listing Rules
new reporting regulations. The amended Policy was approved by the Board in
May 2024 and can be found on our corporate website, thewosgroupplc.com.
We are fully committed to building an inclusive culture and workforce, and our
Diversity and Inclusion Strategy continues to support this aim. We believe that
by treating our colleagues with respect and trust, supported by our Company
purpose and values, we will build a more diverse, fair, inclusive Group, which will
underpin our strategy and management decisions, actions and behaviours. It is
essential the Company continues to hold itself accountable and we have set
ourselves clear goals to help us realise our ambitions.
The Company collects both gender and ethnicity data direct from the Board
members and executive management annually on a self-identifying basis in a
questionnaire. The data is used for statistical reporting purposes and is provided
with consent. Board members and executive management are asked to identify
their gender and ethnicity as set out in the table below.
Board and senior management diversity
The following tables set out the information required under the UK Listing Rule 9.8.6R(10) as at 28 April 2024. The information included, supports the statements
made in the Nomination Committee Report which can be found on page 164.
For the purposes of the below table, Executive Management is defined in the UK Listing Rules. In the absence of an executive committee the Watches of Switzerland
Group has defined Executive Management as the CEO and his direct reports, as per the UK Listing Rules definition and guidance.
Gender on a self identifying basis
Number of
Board members
Percentage
of the Board
Number of senior positions
on the Board (CEO, CFO,
SID and Chair)
Number of members
of Executive
Management
Percentage of Executive
Management
Men 4 57.1% 3 5 62.5%
Women 3 42.9% 1 3 37. 5%
Not specified/prefer not to say – – – – –
Ethnicity on a self identifying basis
Number of
Board members
Percentage
of the Board
Number of senior positions
on the Board (CEO, CFO,
SID and Chair)
Number of members
of Executive
Management
Percentage of Executive
Management
White British or other White (including minority-white groups) 6 85.7% 4 7 87.5%
Mixed/Multiple Ethnic Groups 1 14.3% – 1 12.5%
Asian/Asian British – – – – –
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/ prefer not to say – – – – –
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continued
SUCCESSION PLANNING
The Nomination Committee continues to review succession plans for both
Board and senior management each year. During the year, the Nomination
Committee focused specifically on the succession planning for Non-Executive
Directors and senior management. Further information on our approach to
succession planning and Board appointments can be found in the Nomination
Committee’s Report on pages 162 to 164.
The Board reviews annually the bench strength and skill set of the senior
management team, taking into consideration the growth strategy of the business
and the need to ensure we maintain the right levels of talent to support the
future growth of the business.
BOARD PERFORMANCE REVIEW
During FY24, an internally facilitated Board Performance Review was carried out.
The Chair and the Company Secretary and General Counsel worked together
on producing a questionnaire, which reflected the workings of our Board and
took into consideration the findings and recommendations of the previous
evaluations. The purpose of the exercise was to conduct a comprehensive
performance review of how the Board and its Committees operate, as measured
against current best practice corporate governance principles and in accordance
with the provisions of the Code and associated guidance.
It is the Board’s policy to conduct a Board Performance Review exercise on an
annual basis. In line with the Code, the Board’s policy is to conduct an externally
facilitated review, at least, once every three years.
Further information on the Board effectiveness and performance review can be
found on page 161.
The Senior Independent Director conducted an independent assessment of the
Chair of the Board and provided feedback to the Board.
RE-ELECTION OF DIRECTORS
In accordance with the Code, the Board has determined that all Directors will
stand for election or re-election at each AGM. The Chair of the Board has
confirmed that the Directors standing for re-election at this year’s AGM continue
to perform effectively and that they demonstrate commitment to their roles.
This can be seen by the attendance record set out on page 145. The reasons
why the Board considers that each Director’s contribution is, and continues to
be, important to the Company’s long-term sustainable success are set out in the
Directors’ biographies on pages 148 and 149.
During the year, the Chair completed his first three-year term with the Company.
The Chair expressed a willingness to remain in office and the Board approved
that the term be extended for a further three years.
PREPARATION OF THE ANNUAL REPORT AND ACCOUNTS
Assisted by the Audit & Risk Committee, the Board has carried out a review of
the Annual Report and Accounts and considers that, in its opinion, the report is
fair, balanced and understandable and provides the information necessary for
shareholders to assess the Group and Company’s position and performance,
business model and strategy. Further information on this process can be found
in the Audit & Risk Committee Report on page 165.
See pages 26 and 27 in the Strategic Report for the description of our Business
Model and page 140 and 141 for the Going Concern and Viability Statement.
INDEPENDENCE AND CONFLICTS OFINTEREST
The Code recommends that at least half of the Board, excluding the Chair,
should comprise Non-Executive Directors determined by the Board to be
independent. At the end of the year, excluding the Chair, the Board consists of
six members, of which four members are determined by the Board to be
independent Non-Executive Directors. The composition of the Audit & Risk
Committee, Nomination Committee and Remuneration Committee comply in
all respects with the independence provisions of the Code.
Each of the Directors has a statutory duty under the Companies Act 2006 to
avoid conflicts of interest with the Company and to disclose the nature and
extent of any such interest to the Board. Under the Articles, the Board may
authorise any matter which would otherwise involve a Director breaching this
duty to avoid conflicts of interest and may attach to any such authorisation such
conditions and/or restrictions on participation at relevant Board meetings. The
Chair, acting reasonably, has the power to determine whether a matter was a
conflict matter.
Directors are required to give notice of any potential situational and/or
transactional conflicts, which are then considered by the Board and, if deemed
appropriate, authorised accordingly. A Director is not however, permitted to
participate in such considerations or to vote in relation to their own conflicts.
Following the last review, the Board concluded that any potential conflicts have
been appropriately authorised, that no circumstances existed which would
necessitate that any prior authorisation be revoked or amended and that the
authorisation process continued to operate effectively.
EXTERNAL DIRECTORSHIPS
Any external appointments or other significant time commitments of the
Directors require the prior approval of the Board.
The Board is comfortable that external appointments of the Chair and the
Directors do not impact on the time that any Director devotes to the Company
and there are no overboarding concerns for any of the Directors.
INFORMATION PROVIDED TO THE BOARD
There is a good flow of information to the Board, with regular updates on
trading, cash flows, financial and non-financial key performance indicators and
financing. Board members receive monthly financial information comprising sales
analysis which is accompanied by narrative. Alongside this reporting there is
regular ongoing dialogue with the Non-Executive Directors. The Board also
receives market updates containing a summary of share performance.
All papers and agendas are circulated in advance of scheduled meetings and as
well as conducting the business of the meeting there is a review of minutes,
discussion of any matters arising and a briefing on any action points that arose
from the last meeting.
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The Board acknowledges its responsibility for establishing and maintaining the
Group’s system of risk management and internal controls and it receives regular
reports from management identifying, evaluating and managing the risks within
the business. The system of internal controls is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and can provide only
reasonable, and not absolute, assurance against material misstatement or loss.
The Board, assisted by the Audit & Risk Committee, has carried out a review of
the effectiveness of the system of risk management and internal controls during
FY24 and for the period up to the date of approval of the Consolidated Financial
Statements contained in the Annual Report and Accounts. All relevant members
of senior management completed an annual ‘control certificate’, to confirm the
effectiveness of internal control within their respective area. All senior managers
who completed the ‘control certificate’ were asked to disclose any known
control failures, instances of non-compliance with legislation or regulatory
requirements, instances of identified fraud or serious control breakdown, or any
other relevant matters they are aware of, that may need to be considered by the
Board in making the required disclosure.
To gain assurance over the design and operation effectiveness of controls, and to
confirm that accurate statements had been provided, sample tests were
conducted, by Internal Audit, to determine whether controls are effective in
mitigating risks.
In conclusion, based on the work performed, the Board is satisfied with the adequacy
of the Group control framework and the Board confirms that no significant
weaknesses or failings were identified as a result of the review of effectiveness.
REMUNERATION
The Remuneration Committee is chaired by Tea Colaianni and is made up of
Independent Non-Executive Directors and the Chair. Prior to her appointment
as Chair of the Committee, Tea had served on a Remuneration Committee for
a significant period of time, longer than the required 12 months.
The Committee has defined Terms of Reference which include assisting the
Board in discharging its responsibilities with respect to:
– Determining the policy for Executive Director remuneration and setting
remuneration for the Chair of the Board, Executive Directors and senior
management
– Reviewing workforce remuneration and related policies
Refer to page 178 for further details on the work of the Remuneration Committee.
TRAINING AND INDUCTION
The Directors are provided with annual refresher training on their duties and
responsibilities as directors of a publicly listed company and governance and
regulatory trends or updates. Any new director receives a comprehensive
induction which includes a separate session on governance and directors’ duties.
During the year, the Company Secretary and General Counsel continued to
monitor the training requirements of each Director, and the Board Performance
Review questionnaire also focused on the needs of the Directors with regard to
training. Technical briefings are provided in response to any training requirements.
Training topics for FY24 included: upcoming changes to the listing regime;
Governance and compliance culture; key relevant legal rulings, 2024 Corporate
Governance Code changes; director duties; Inside Information considerations;
and ESG considerations including (in conjunction with the ESG Committee) a
focus on a tailored approach to positioning Watches of Switzerland as a luxury
retailer, peer analysis and an ESG champion. Additionally, following
recommendations of the prior year Board Evaluation, a number of brand and
product deep dive sessions were held to further enhance the Non-Executive
Directors knowledge of the product range offering.
Following Anders Romberg’s appointment, notwithstanding his previous tenure,
a comprehensive reinduction programme was prepared, particularly covering
key developments since his departure. Further details of the induction
programme for Anders can be found on page 163.
The Board is committed to the training and development of Directors to
improve their knowledge of the business and the regulatory environment in
which it operates. The Company Secretary and General Counsel is responsible
for helping the Chair identify and organise training for the Directors which is
tailored to individual needs.
AUDIT, RISK MANAGEMENT AND INTERNAL CONTROL
The Audit & Risk Committee is chaired by Robert Moorhead and is comprised
entirely of Independent Non-Executive Directors. Robert is currently the Chief
Financial Officer of WH Smith PLC and continues to have recent, relevant and up
to date financial experience. The Committee has defined Terms of Reference
which include assisting the Board in discharging its responsibilities with respect to:
– Establishing formal and transparent policies and procedures to ensure the
independence and effectiveness of internal and external audit functions and
satisfy itself on the integrity of financial and narrative statements
– Establishing and reviewing procedures to ensure that the Annual Report and
Accounts present a fair, balanced and understandable assessment of the
Group’s position and prospects
– Establishing procedures to manage risk, oversee the internal control
framework and determine the nature and extent of the principal risks the
Group is willing to take in pursuance of its long-term strategic objectives
Refer to page 166 for details on the work of the Audit & Risk Committee.
The Board is collectively responsible for determining the nature and extent of
the principal risks it is willing to take in achieving its strategic objectives. The
processes in place for assessment, management and monitoring of risks are
described in the Risk Management section on pages 130 to 133.
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CORPORATE GOVERNANCE REPORT
continued
FY23 INTERNAL BOARD EVALUATION PROGRESS
During FY23, the Board conducted an internal Board Evaluation. The Chair and the Company Secretary and General Counsel worked together on producing a
questionnaire which reflected the workings of our Board and took into consideration the findings and recommendations of the previous externally facilitated
evaluation. The purpose of the exercise was to conduct a comprehensive evaluation of how the Board and its Committees operate, as measured against current
best practice corporate governance principles and in accordance with the provisions of the Code and associated guidance.
The review concluded that the Board operated effectively, and the Group’s governance framework had continued to develop. It was concluded that the Board has
a range of strengths, with relevant, complementary skills and experience that helps to provide scrutiny, oversight, input and value. The Directors intend to build on
these strengths and to develop the Board further with some key areas of focus. These strengths form a solid foundation. However, it has concluded some areas still
require development, regardless of how the role of the Board develops.
Whilst the evaluation concluded that the Board and its Committee were effective and operated efficiently, and with good engagement, a number of recommendations
were agreed and, under the supervision of the Nomination Committee, an action plan was put in place. The action plan covered the priorities detailed below:
Key priorities identified from FY23 evaluation Progress made against the FY23 evaluation
Further evolution of Board agendas and presentations
particularly in terms of strategic focus and presentations
from various business areas
A review of pipeline agenda items is held at least annually
Non-Executive Directors are encouraged to suggest relevant topical agenda items
Key strategic updates scheduled throughout the year
Focused discussion on strategic initiatives, increased levels of debate and less presentations
Continued enhancement of the Board’s knowledge, relating
to products, brands and ESG climate reporting
Additional formal Board meeting scheduled to review trading over the Holiday period and
understand trends of trading
Deep dives on products and brands took place during the year
Focused training session on ESG trends and reporting
Review of jewellery strategy Separate sessions and enhanced focus on a luxury branded jewellery strategy
Review method of presentation of the business performance
measures
Additional key financial and non-financial metrics tabled at each Board meeting
Increased focus on the principal risks of information security
and cyber security
Cyber security is discussed and reviewed at each Audit & Risk Committee meeting. External
advisers presented a gap and benchmarking analysis
Annual presentation to the Audit & Risk Committee by the Data Protection Officer who
submits a data dashboard at each Audit & Risk Committee meeting
New Group Data Protection and Information Security Statement approved by the Board
Further succession planning for the Board and senior
management
Succession planning remains a key focus, further work continues for an effective succession
planning process in place for all Board members and also for senior management
Executive Director HR presents on an annual basis an updated plan and progress
FY24 INTERNAL BOARD PERFORMANCE REVIEW
Following the recommendations made by the 2024 Corporate Governance Code, the Company will refer to the annual evaluation as a ‘board performance review’. This is
in line with the current process where the annual board evaluation considers Boards succession, skills and composition.
Towards the end of FY24, the Chair of the Board, alongside the Company Secretary and General Counsel, agreed the proposed approach for an internal Board Performance
Review with the Nomination Committee. A performance review questionnaire, was sent to all members of the Board to gain an insight into how well the Board is
performing; this also included areas for comments and training suggestions.
The Board was reminded that it should regularly assess its effectiveness, the adequacy of matters reserved to it, and how well it acts as a forum for discussion and
communication. Regular assessments may identify areas in which the Board and its processes might be more effective, or may highlight skills and/or knowledge gaps
in the Board which may lead to a request for additional development (continuing education).
The review concluded that the Board operates effectively and efficiently and is well engaged. All Board members actively contribute at meetings and the Board is
well chaired, operating effectively and that improvements continue to be made year-on-year. The following areas were identified for further development:
– Continued focus on succession planning for the Board and senior management
– Further enhanced training and awareness in key relevant areas, e.g. around different product categories and brands
– Following significant improvements made with regard to Board meetings, presentations and discussions, continued momentum and development of strategic
initiative debates and discussions
Additionally, the Senior Independent Director conducted an independent assessment of the Chair of the Board and provided feedback to the Board.
BOARD AND COMMITTEE
PERFORMANCE REVIEW
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BOARD EVALUATION
MEMBERS
Ian Carter (Chair)
Tea Colaianni
Baroness (Rosa)
Monckton MBE
Robert Moorhead
PRINCIPAL RESPONSIBILITIES
The Committee’s principal responsibilities are to:
– Review the structure, size and composition of the Board and
itsCommittees
– Give full consideration to succession planning for the Board and
other senior management taking into account the challenges and
opportunities facing the Company, and the skills, diversity and
expertise needed
– Review the leadership needs of the organisation
– Remain fully informed about strategic issues and commercial
changes affecting the Company and the market in which it
operates
– Identify and nominate potential Board candidates
– Evaluate the combination of skills, knowledge, experience,
diversity and independence on the Board
– Review the results of the Board performance evaluation process
and manage any recommendations
– Support people initiatives that promote a culture of inclusion
anddiversity
NOMINATION COMMITTEE REPORT
IAN CARTER
Chair of the Nomination Committee
DEAR SHAREHOLDER
I am pleased to report the Nomination Committee (the Committee) remains
compliant with the Corporate Governance Code 2018 (the Code). The
Code recommends that the Committee be comprised of a majority of
independent Non- Executive Directors which it does, as Tea Colaianni,
Robert Moorhead and Baroness (Rosa) Monckton MBE are all independent.
The Company Secretary and General Counsel acts as Secretary to the
Nomination Committee and, by invitation, the CEO, other Board members, the
Executive Director HR, as well as other senior management and/or external
advisers may attend as appropriate for all, or part of any meeting.
ROLE
The Committee is a key committee of the Board whose role is to keep the
composition and structure of the Board and its Committees under review and
has responsibility for nominating candidates for appointment as Directors to the
Board having regard to the Board’s structure, size and composition (including the
skills, knowledge, experience, diversity and independence of its members)
ensuring that the Board and its other Committees are effective in discharging
their responsibilities. The Committee is tasked with ensuring that succession plans
are in place for the Board and senior management, taking into consideration the
current Board composition, the leadership requirements of the Group and the
wider commercial and market environment within which the Group operates.
TERMS OF REFERENCE
The responsibilities of the Committee are set out in its Terms of Reference. The
Committee’s Terms of Reference reflect the current regulatory requirements
and best practice appropriate to the Group’s size, nature and stage of
development. The Terms of Reference were reviewed during the year and
minor stylistic changes were made, which included a clarification of the definition
of the Group’s senior management to ensure consistency with the Board
Diversity & Inclusion Policy and the new diversity reporting requirements.
The Terms of Reference can be found in full at thewosgroupplc.com
The Committee’s Terms of Reference require that it meets at least twice a year.
During the year, the Committee met three times, with an additional ad hoc
meeting relating to the appointment of Anders Romberg and the departure of
Bill Floydd. Full details of the Committee meeting attendance can be found on
page 145.
BOARD CHANGES
As reported last year, in May 2023, Anders Romberg was reappointed as the
Group’s Chief Financial Officer. Details regarding Bill’s resignation and Anders’
appointment were disclosed in the 2023 Annual Report and Accounts a copy of
which can be found on the corporate website, thewosgroupplc.com. The Board
is very pleased with Anders’ reintegration within the business and have been able
to recognise his influence, and experience, of the luxury retail market, from an
early stage after reappointment, including his demonstration of financing and
investor relations knowledge.
Further details on Anders’ skills and experience can be found on page 148.
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COMMITTEE REPORTS
KEY ACTIVITIES DURING THE YEAR
INDUCTION
On joining the Company, all Directors undergo a tailored induction programme.
The comprehensive induction programme includes meetings, either face-to-face
or via conferencing facilities with key colleagues across the Group. Other
meetings will involve external advisers and visits to offices, showrooms and
repair workshops. Director induction also focuses on recent Board and
Committee activity, stakeholder engagement, brand partnerships, investor
relations and a tailored session on corporate governance.
The induction programme for Non-Executive Directors is facilitated and
implemented by the Chair of the Company, and the Company Secretary and
General Counsel, with input from the CEO.
A comprehensive reintegration programme for Anders was undertaken,
notwithstanding his comprehensive knowledge of the business.
“The Committee continues
to ensure that succession
planning for business-critical
roles is proactively reviewed
and a diverse pipeline continues
to develop.”
IAN CARTER
CHAIR OF THE NOMINATION COMMITTEE
– Nominated the new CFO to the Board for approval
– Conducted a review of Executive Directors and senior management
succession planning and talent development
– Considered the skills, diversity and expertise as well as the backgrounds
of each of the Board members, when reviewing the future needs of
theBoard
– Discussed and agreed an action plan following the FY23 Board
Evaluation
– Reviewed external appointments for the Non-Executive Directors to
assess whether any appointment is significant or causes any conflicts
– Reviewed the Committee’s Terms of Reference and confirmed they
had been adhered to
– Reviewed the Company’s Conflicts of Interest Register
– Reviewed and recommended to the Board, the updated Board
Diversity & Inclusion Policy
– Agreed, with the Board, the process for the FY24 internal Board
Performance Review
Following his reappointment, Anders undertook a tailored and
comprehensive induction and refamilarisation of the business. The
programme included meeting with senior management, new colleagues, and
a comprehensive handover from Board members and the outgoing CFO.
An outline of the induction process is as follows:
– A comprehensive review of:
– Corporate Governance Code updates and governance trends
– Legal and regulatory guidance and reporting since his previous
departure
– Refresher of director duties and particularly s172 requirements
– FY23 Board Evaluation and action plan
– The Group structure and changes which had occurred
– Recent training undertaken by the Board and by senior management,
including:
– Competition Law
– Share dealing, insider dealing and Market Abuse Regulations
– ESG and climate reporting
– Introductions to the Company’s key external advisers, including the
brokers and details of recent presentations made to the Board
– Recent Board and Committee meetings considerations, including
minutes and matters arising from the meetings
– Briefing sessions on the key financial areas of the organisation including:
– Progression on the Long Range Plan
– Budget and strategy
– Operational compliance
– Refinancing
– Provided with details of the Directors’ and Officers’ Liability Insurance
DIRECTOR REINTEGRATION PROGRAMME – ANDERS ROMBERG
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SUCCESSION
The Committee plays a vital role in promoting effective Board and leadership
succession, making sure it is fully aligned to the Group’s strategy.
Succession planning is the process of identifying the critical positions within our
organisation and developing action plans and pipelines to fill them, thereby
minimising the risk to the business of key roles being vacant. The Committee
continues to ensure that succession planning for business-critical roles is
proactively reviewed and the diverse pipeline continues to develop.
As part of our succession planning, the Committee held a comprehensive review
of talent and considered succession for Executive Directors and senior
management. The review assessed the potential performance of senior
management and closely monitored successor development plans when taking
into consideration the future growth strategy of the business. The Committee
considered the current skills, experience and tenure of the Directors, and
assessed future needs against the Group’s strategic objectives.
In order to conclude the Board’s composition and succession planning discussions,
as per the prior year, the Chair again requested the collation of ‘skills data’, which
was converted into a skills matrix to help identify the Board’s requirements and
as part of general Board planning. At the same time gender and ethnicity data for
Board members was captured, the details of which can be found on page 144.
DIVERSITY
The Committee recognises the importance of diversity and inclusion both in the
Boardroom and throughout the organisation and understands that a diverse
Board will offer wider perspectives which lead to better decision-making,
enabling the Board to meet its responsibilities.
The Committee, on behalf of the Board, is responsible for the development of a
diverse pipeline for succession to the Board and will ensure proper assessment as to
the values and behaviours expected on the Board as part of the recruitment process.
In being responsible for the Board’s composition, the Committee will consider the
benefits of all aspects of diversity in order to maintain an appropriate range and
balance of skills, experience and background on the Board. Whilst the Committee
will take into account a variety of factors before recommending any new appointment
to the Board, including relevant skills to perform the role, experience, knowledge,
ethnicity and gender, the most important priority of the Committee, however, is
ensuring that the best candidate is selected to join the Board.
The Committee takes into consideration all regulations and best practice,
including the FTSE Women Leaders Review, ‘FTSE WLR’ as well as the Parker
Review and is pleased to report it remains compliant with both of these
initiatives. With regard to the 250 FTSE WLR Index the Company was ranked
10th (2024: 15th), its highest score to date.
The Committee annually reviews the Board Diversity & Inclusion Policy as well
as measurable objectives for achieving diversity on the Board. In May 2024, the
Committee reviewed the Board Diversity & Inclusion Policy and made
recommendations to the Board for amendments to include recommendations
from the Parker Review. The Policy was also amended to reflect the new
requirements introduced by the FCA and DTR 7.2.8AR.
Reporting under the Listing Rule 9.8.6 can be found within the Corporate
Governance Report on page 158.The Board has chosen to align its diversity
reporting reference date with the Company’s financial year-end and proposes to
maintain this alignment for future reporting periods. As required under LR 9.8.6
R(10), further details in respect of the three targets as at 28 April 2024, are
disclosed in the tables on page 158.
The Committee is satisfied that the focus on diversity and inclusion by the Board
and senior management and the Company’s diversity strategy, underpinned by
its targets, means that any risks around continuing to meet externally set targets
are mitigated.
Information on Board appointments and the criteria considered can be found
within the Board Diversity & Inclusion Policy on the corporate website
thewosgroupplc.com.
When considering succession planning, the Nomination Committee is advised by
the CEO as to the internal pipeline of Board capable candidates. The pipeline
aims to appropriately reflect the importance of diversity to the organisation.
The Board recognises and considers the importance of diversity not just at
Board level but throughout the organisation and we have a number of
programmes and initiatives in place within the organisation to help develop a
diverse talent pipeline, including diversity induction training, learning and
development, mentoring and sponsorship. Further information on our workforce
initiatives on diversity and inclusion can be found on pages 74 and 75.
EFFECTIVENESS AND COMPOSITION
The FY24 Board Performance Review was conducted by way of an internal
questionnaire. Further details of key observations and also progress from the
FY23 Board Evaluation and the process for FY24 can be found on page 161. The
performance of this Committee was evaluated as part of the Board Evaluation
process. The Board review concluded that the Committee functions effectively.
The Committee will be responsible for overseeing an action plan to be put in
place following recommendations from the FY24 Board Performance Review.
As part of the annual review of the effectiveness of the Board, and its
Committees, diversity and composition is considered, to ensure it is appropriate
to discharge its duty effectively and to manage succession issues. The Committee
keeps the composition of the Board and its Committees under continual review,
to ensure that they have a suitable balance of skills and experience to oversee
and challenge the delivery of the Group’s strategy, and to discharge the
Committee’s responsibilities effectively.
RE-ELECTION OF DIRECTORS
The effectiveness and commitment of each of the Non-Executive Directors is
reviewed by the Committee annually. The Committee has satisfied itself as to
the individual skills, relevant experience, contributions and time commitment of
all the Non-Executive Directors, taking into account their other offices and
interests held. As detailed on page 193, the Board is recommending the election
or re-election to office of all Directors at our 2024 AGM.
I will be available at the AGM to answer any questions on the work of
theCommittee.
IAN CARTER
CHAIR OF THE NOMINATION COMMITTEE
26 June 2024
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COMMITTEE REPORTS
continued
AUDIT & RISK COMMITTEE REPORT
I am pleased to introduce the Audit & Risk Committee Report for the
financial year ended 28 April 2024. The Committee plays a key role in
developing the Group’s governance framework and its activities included
reviewing and monitoring the integrity of financial information, the Group’s
system of internal controls and risk management, internal and external audit
processes and the process for compliance with laws, regulations, and ethical
codes of practice. In addition, we work with other Committees and the
Board to ensure that stakeholder interests are protected and the Group’s
Long Range Plan to FY28 is supported. The Committee also worked
alongside the ESG Committee having regard to ESG risk management and
TCFD reporting.
COMMITTEE COMPOSITION
All members of the Audit & Risk Committee are deemed Independent
Non-Executive Directors. The Board considers that I have recent and relevant
financial experience as required by the Corporate Governance Code 2018 (the
Code) and the Committee has competence relevant to the sector in which the
Group operates. Details of the Audit & Risk Committee members’ experience
can be found on pages 148 to 149. The Committee’s wide range of financial and
commercial skills and experience serves to provide the necessary knowledge and
ability to work as an effective committee and to robustly challenge the Executive
Directors and Senior Management as and when appropriate.
At the invitation of the Committee, the Chair of the Board, the CEO, the CFO,
the Director of Internal Audit, senior management and the External Auditor
attend meetings. The Committee has regular private meetings with the External
and Internal Auditors during the year.
The Company Secretary and General Counsel acts as Secretary to the Committee.
TERMS OF REFERENCE
The Terms of Reference of the Committee reflect the current statutory
requirements and best practice appropriate to the Group’s size, nature, and
stage of development. The Committee met its requirement to meet at least four
times a year. Details of meeting attendance can be found on page 145. The
Committee reviews its Terms of Reference annually, recommending any
suggested changes through to the Board. There were only minimal changes this
year but the Committee is cognisant of the forthcoming changes to the Code
and these will be incorporated, where appropriate, over the course of the next
24 months, in line with the Code guidance.
COMMITTEE EFFECTIVENESS
During FY24, an internal Board Performance Review, of the Board and the
Board Committees was undertaken. The results of which concluded that the
Audit & Risk Committee functions effectively, provides the right degree of
challenge, and interacts well with the Board and other Committees. Details of
how the evaluation was conducted can be found on page 161.
MEMBERS
Robert Moorhead (Chair)
Tea Colaianni
Baroness (Rosa) Monckton MBE
Chabi Nouri
KEY RESPONSIBILITIES
Financial reporting:
– Monitor the integrity of the Financial Statements of the
Company and Group
– Review the appropriateness and consistency of significant
accounting policies
– Review and report to the Board on significant financial issues
and judgements
– Review the appropriateness of Task Force on Climate Related
Financial Disclosures (TCFD)
Internal control and risk management:
– Carry out a robust assessment of the Group’s emerging and
principal risks on an annual basis, including environmental risks
and opportunities
– Review the Group’s internal control and risk management systems
– Monitor and review the effectiveness of the Group’s Internal
Audit function
– Assess the effectiveness of whistleblowing arrangements
External Audit:
– Review the effectiveness of the External Auditor process
– Develop and implement policies on the engagement of the
External Auditor to supply non-audit services and consider the
impact they have on independence
– Review and monitor the External Auditor’s independence and
objectivity
– Conduct any External Audit tender process and make
recommendations to the Board about the appointment,
reappointment and removal of the External Auditor
– Approve the remuneration and terms of engagement of the
External Auditor
– Ensure the External Auditor has full access to Company
colleagues and records
– Invite challenge by the External Auditor, giving due consideration
to the points raised
Other:
– Engaging with shareholders on the scope of the External Audit,
where appropriate
ROBERT MOORHEAD
Chair of the Audit Committee
DEAR SHAREHOLDER
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ACTIVITIES UNDERTAKEN BY THE AUDIT & RISK COMMITTEE
Financial reporting:
– Monitored the integrity of the Group’s FY24 year-end Results Announcement,
Annual Report and Accounts, and the FY24 Half Year Review
– Assessed and recommended to the Board that the Annual Report and
Accounts are fair, balanced, and understandable, including Alternative
Performance Measures (APMs)
– Assessed the Going Concern and Viability Statement having reviewed
supporting papers from management including the consideration of the
cost-of-living increases, global conditions, the acquisition of Roberto Coin
and climate change on those assessments
– Considered papers from management on the key financial reporting
judgements and estimates
– Reviewed the Task Force on Climate Related Financial Disclosures (TCFD)
FY24 year-end reporting, including the scenario analysis undertaken to
assess the impact of climate related risks
Internal control and risk management:
– Considered the adequacy and effectiveness of the Group’s ongoing risk
management systems and control processes, including environmental risks
and opportunities
– Considered the Group’s risk environment, including its significant and
emerging principal risks and uncertainties and reviewed the mitigating
actions that management has taken, along with determining the risk
appetite of the business
– Reviewed the impact of the cost-of-living increases, global conditions, and
climate change on the principal risks and uncertainties, and the actions
management is taking in response to this
– Reviewed impact of climate related risks and considered associated
opportunities to enhance capital management
– Received deep dive presentations on principal risk areas of data
governance, cyber security, Health & Safety and business interruption
– Received updates and recommendations on forthcoming changes to the
Corporate Governance Code
– Reviewed and approved the Group’s Whistleblowing Policy and
receivedand reviewed whistleblowing incidents, investigation details
andfollow-up actions
– Received updates in relation to anti-bribery and corruption and anti-money
laundering programmes. The Committee recommended to the Board for
approval the Anti-Bribery, Corruption & Fraud Policy which includes the
gifts and hospitality protocols. The Committee also recommended to the
Board for approval the Anti-Money Laundering Policy
– Considered the Group’s systems and framework of controls designed to
detect and report fraud. Received updates on the Failure to Prevent Fraud
Legislation and the Group’s response and preparedness
– Reviewed the Group’s Treasury Policy
– Approved the Group Tax Strategy and received management reports on
the tax affairs of the Group
Internal and external audit:
– Reviewed the effectiveness of the external audit process, taking into
consideration relevant UK professional and regulatory requirements
– Invited challenge by the External Auditor, giving due consideration to the
accounting, financial control, and audit issues reported by the External
Auditor as a result of their work
– Reviewed the Internal and External Auditor independence and objectivity
including approving the policy on non-audit services
– Agreed the External Auditor engagement letter and recommended the
External Auditor remuneration to the Board
– Reviewed and approved the Internal Audit Charter
– Received and reviewed the annual plan and audit reports from the Internal
Audit function
– Undertook a review of the effectiveness of the Internal Audit function
– Held regular private meetings with the Internal and External Auditors,
without management present
– Ensured the External Auditor had full access to Company colleagues
andrecords
Making recommendations to the Board about the reappointment
ofthe External Auditor:
– Reported to the Board on how the Committee has discharged its
responsibilities with respect to External Audit
Other:
– Reviewed the Committee’s Terms of Reference and approved
amendments
– Monitored mandatory e-learning completion statistics for key
compliance areas such as Health & Safety and Anti-bribery
andCorruption
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As part of their review of impairment, the Committee challenged the assumptions
used in the cash flow forecasts for impairment testing, along with the disclosures
made in the Financial Statements. The Committee also received and discussed a
paper from the External Auditor on their work in this area, which specifically
considered and reported on their challenge and assessment of the key
assumptions and methodology used.
The Committee was satisfied that the approach adopted by management was
sufficiently robust to identify when an impairment charge or reversal for showroom
assets needs to be recognised and how it should be assessed and reported.
Inventory valuation
The Committee received a paper from management on accounting for and
valuation of inventory. It discussed the judgements made by management, with
specific consideration to discontinued product and slow-moving stock. The
Committee also considered the policy for, and calculation of, rebates recognised
and absorbed into inventory.
The Committee received a paper from the External Auditor regarding the audit
work they performed over the valuation of inventory. The Committee is satisfied
that the process and judgement adopted by management for the valuation of
inventory is sufficiently robust to establish the value of inventory held and is
satisfied as to the appropriateness of the Group’s provisioning policy.
Revenue recognition
The Committee received papers from management covering the control
environment relating to sales cut-off and accounting judgements in relation to
the accounting for gift cards, client returns and client deposits.
The Committee also received a paper from the External Auditor regarding the
audit work they performed over revenue recognition, which included the use of
computer data analytic tools. The Committee determined that the majority of the
Group’s revenue transactions are non-complex, with minimal judgement applied
over the amount recorded. The Committee is satisfied that the approach taken by
management is sufficiently robust in relation to the recognition of revenue.
IFRS 16 ‘Leases’
During the year, the Committee reviewed the key judgements and assumptions
applied to the calculations and disclosures provided within the Financial
Statements. These included the determination of the term of the leases, the
discount rates used and the determination of whether lease agreements included
substantive substitution rights and should be treated as leases. The Committee
also considered and challenged the use of pre-IFRS 16 APMs within the Annual
Report and Accounts and concluded that these APMs align with the management
reporting used to inform business decisions, investment appraisals, incentive
schemes and banking covenants.
Pensions
The Committee assessed the accounting treatment adopted by management
and the application of IAS 19 ‘Employee Benefits’ in relation to the Aurum
Retirement Benefits Scheme. The Committee reviewed the judgements made in
respect of the assumptions used in the valuation of the Group’s obligations under
the scheme and the associated disclosures made in the Financial Statements.
GOING CONCERN AND VIABILITY STATEMENT
The Committee reviewed the process and assessment of the Group’s prospects
made by management, including:
– The three-year viability assessment period and alignment with the Group’s
internal forecasts, business model and recent acquisition of Roberto Coin Inc.
– The assessment of the capacity of the Group to remain viable after
consideration of future cash flows, financing, and mitigating factors
– The modelling of the financial impact of the Group’s principal risks
materialising using severe but plausible scenarios
The Committee reviewed management’s analysis supporting the going concern
basis of preparation, including reviewing the Group’s financial performance,
budgets for the FY25 three-year plan, and cash flow projections. The going
concern and viability reviews by the Committee included the review of the
results of the reverse-stress tests performed by management, available financing
in place and any further mitigating actions that management could take. In making
its assessment, the Committee took into consideration the trading results of the
Group, liquidity and covenant compliance.
As a result of the assessment, the Committee reported to the Board that the
going concern basis of preparation remained appropriate and that there is a
reasonable expectation that the Group will be able to continue in operation to
meet its liabilities as they fall due over the three-year viability assessment period.
The Going Concern and Viability Statement is set out in the Strategic Report on
pages 140 to 141.
SIGNIFICANT FINANCIAL REPORTING AREAS
In preparing the Financial Statements, there are several areas requiring the
exercise of judgement by management. The Committee’s role is to assess
whether the judgements and estimates made by management are reasonable
and appropriate. To assist in this evaluation, the CFO provided an accounting
paper to the Committee, setting out all the financial reporting judgements and
estimates which were considered material to the Financial Statements.
The main areas of judgements and estimates that have been considered by the
Committee in the preparation of the Financial Statements are as follows:
Impairment of tangible and right-of-use assets
The Committee received and considered a paper from management covering
the judgements made in respect of the impairment testing of the Group’s
property, plant and equipment, and right-of-use assets. The Committee noted
that management had considered the trading results of each showroom and
noted where a showroom has low profitability which is not expected to improve
in the near future. For the European mono-brand boutiques, managed had
assessed the Fair Value Less Costs to Sell of the assets. The Committee also
reviewed management’s assessment of whether any prior impairments should
be reversed.
Given management has continued to report on the performance of the business
on a pre-IFRS 16 (IAS 17) basis within its APMs alongside statutory measures
derived under IFRS 16, the paper and discussions considered impairment
assessment of these assets on both bases.
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RISK MANAGEMENT AND INTERNAL CONTROLS
The Board has ultimate responsibility for effective management of risk for the
Group including determining its risk appetite, identifying key strategic and emerging
risks, and reviewing the risk management and internal control framework. The
Committee, in supporting the Board to assess the effectiveness of risk management
and internal control processes, relies on several different sources to carry out its
work including Internal Audit assurance reports, the assurance provided by the
External Auditor and other third parties in specific risk areas.
The Committee monitors and reviews the effectiveness of the Group’s risk
management processes and internal financial and non-financial controls. The key
features of the risk management process that were in place during the year are
as follows:
– Each business function conducted risk assessments based on identified
business objectives, which were reviewed and agreed annually by the senior
management of each function. Risks are considered and evaluated in respect
of their potential impact and likelihood. These risk assessments are updated
and reviewed at least quarterly and are reported to the Committee
– A Group risk assessment is also undertaken by management, which considers
all areas of potential risk across all systems, functions, and key business
processes. This risk assessment, together with the business risk assessments,
forms the basis for determining the Internal Audit plan
– Climate related physical and transition risks and opportunities, that could
impact the business in the future under different climate scenarios, have been
considered and incorporated into the risk management framework with
oversight from the ESG Committee
– The Director of Internal Audit & Risk met with all senior management to
undertake a formal review of the internal controls across the Group.
Seniorexecutives were required to certify compliance with the Group’s
policies and procedures and that appropriate internal controls were in
operation during the period under review. Any weaknesses are highlighted,
and the results are reviewed by the Director of Internal Audit & Risk, the
Committee, and the Board
– The Committee confirmed to the Board that it has reviewed the
effectiveness of the systems of internal control, including financial,
operational,and compliance controls, and risk management for the period
ofthis report, in accordance with the Code and the Risk Management and
Internal Control Guidance
Non-underlying and exceptional items
The Committee considered the presentation of the Financial Statements and in
particular the use of APMs and the presentation of exceptional items in line with
the Group accounting policy. This policy states that adjustments are only made
to reported profit when not considered part of the normal operating costs of
the business and considered exceptional due their size, nature, or incidence.
Each of the above areas of judgement has been identified as an area of focus
and therefore the Committee has also reviewed reporting from the External
Auditor on the relevant areas.
Annual Report and Accounts – fair, balanced, and understandable
assessment
At the request of the Board, the Committee has considered whether, in its opinion,
the Annual Report and Accounts 2024, taken as a whole, are fair, balanced, and
understandable, and that they provide the information necessary for shareholders
to assess the Group’s position and performance, business model and strategy. The
Group has established internal controls in relation to the process for preparing
the Annual Report and Accounts. These include the following:
– Management regularly monitors and considers developments in accounting
regulations and best practice in financial reporting and, where appropriate,
reflects developments in the Financial Statements
– The Annual Report and Accounts are drafted by senior management with
overall co-ordination by a member of the finance team, to ensure consistency
across the relevant sections
– An internal verification process is undertaken to ensure accuracy
– Comprehensive reviews of drafts of the Annual Report and Accounts are
undertaken by Executive Directors and Senior Management
– The final draft of the Annual Report and Accounts is reviewed by the Audit
& Risk Committee prior to consideration by the Board
Following its review, the Committee advised the Board that the Annual Report
and Accounts, taken as a whole, were considered to be fair, balanced and
understandable and that they provided the information necessary for shareholders
to assess the Group’s position and performance, business model and strategy. The
Committee was also satisfied that suitable accounting policies have been adopted
and appropriate disclosures have been made in the Financial Statements.
FINANCIAL REPORTING COUNCIL
In October 2023, the Company received a letter from the FRC following a review
of the Company’s Interim Report for the period ended 29 October 2023. No
questions or queries were raised. The letter recommended disclosure
improvements on the reconciliation of Alternative Performance Measures to IFRS
line items. These suggested improvements have been reflected in the current year
Annual Report and Accounts.
The Company acknowledges that the FRC’s review of its 29 October 2023 Interim
Report provided no assurance that the Interim Report is correct in all material
respects and that the FRC’s role is not to verify the information given but to
consider compliance with reporting requirements. The FRC accepts no liability for
reliance on its letters by the Company or any third-party, including but not limited
to investors and shareholders.
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INTERNAL AUDIT
The Director of Internal Audit & Risk, who reports directly to the Committee
Chair, provides assurance to the Committee through independent reviews of
agreed risk areas. The Committee is responsible for overseeing the work of the
Internal Audit function. It reviews and approves the scope of the Internal Audit
plan and assesses the quality of Internal Audit reports, along with management’s
actions relating to findings and the closure of recommended actions.
Each year, a carefully targeted Internal Audit plan is agreed to provide appropriate
assurance to the Committee over the effectiveness of risk management and
internal control processes across the Group. The Internal Audit plan is risk based
and takes an independent view of what Internal Audit considers to be the highest
known and emerging risks and strategic priorities facing the business. The
Committee is satisfied that the Internal Audit plan provides appropriate
assurance on the controls in place to manage the principal risks facing the Group.
Internal Audit resources continue to be reviewed, with an agreement that
external partners would be utilised where subject matter expertise would be
most appropriate.
The Director of Internal Audit & Risk:
– Attended all Audit & Risk Committee meetings and provided reports and
verbal updates to the Committee
– Had direct access to all Committee members and met with the Committee
Chair and Committee members separately
– Met with the Audit & Risk Committee Chair several times to carry out formal
reviews of the Internal Audit function’s resources, approach, and audit plan
– Managed the risk register review process
– Met privately with the Committee without management being present
The assessment of the Internal Audit team covered the Internal Audit findings
and reporting, Internal Audit delivery including the Internal Audit plan and
whether Internal Audit has sufficient, appropriate resources. In reviewing the
effectiveness of Internal Audit, the Audit & Risk Committee considered:
– The results of internal audits and reporting thereof
– Ongoing communication between the Director of Internal Audit & Risk and
the Audit & Risk Committee, including the private sessions held
– Self-assessment by the Director of Internal Audit & Risk
– Questionnaires and feedback from key stakeholders including senior
management
Following assessment by the Committee during the year, the Audit & Risk
Committee is satisfied that the Internal Audit team has the quality, experience,
and expertise appropriate for the business.
The Group also has an operational audit, loss prevention and security team that
reviews compliance with certain key internal procedures in showrooms and at
other locations.
EXTERNAL AUDITOR
Interaction with external audit
One of the Committee’s roles is to oversee the relationship with the External
Auditor, Ernst & Young LLP (EY), and to evaluate the effectiveness of the service
provided and their ongoing independence.
The External Auditor has attended all this year’s Committee meetings and at
each meeting has time with the Committee without management present.
The Chair of the Audit & Risk Committee has also met with the external audit
partner to review the audit scope and audit findings.
The Committee had regular open communication with the External Auditor as
well as the Group’s management.
Auditor independence and objectivity
During the year, the External Auditor reported to the Committee on their
independence from the Group.
The Company’s independence and objectivity are safeguarded by:
– A policy being in place which limits the nature of non-audit services
– The External Auditor’s own internal processes to approve requests for non-
audit work to the External Auditor
– Monitoring changes in legislation related to auditor independence and
objectivity
– Rotation of the lead audit partner after five years
– Independent reporting lines from the External Auditor to the Committee
– Restrictions on the employment by the Group of employees of the External
Auditor
The Committee and the Board are satisfied that EY has adequate policies and
safeguards in place to ensure that the External Auditor objectivity and
independence is maintained.
When assessing the independence of the External Auditor, the Committee
considers, amongst other things, the length of tenure of the audit firm and the
audit partner, the value of non-audit fees provided by the External Auditor and
the relationship with the External Auditor as a whole. As part of the assessment
of the External Auditor, the Committee considered whether the External
Auditor had exercised professional scepticism and an appropriate degree of
challenge to management.
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Non-audit services provided by the External Auditor
The Committee has adopted a formal policy in respect of non-audit services provided by the External Auditor to ensure that Auditor objectivity and independence
are maintained, in accordance with the EU Audit Reform.
Non-audit service Policy
Audit-related services
Audit-related services are services, generally of an assurance nature, provided by the Auditor as a
result of their expert knowledge and experience of the Group. Audit-related services include:
– Reviews of interim financial statements
– Reporting required by law or regulation to be provided by the Auditor
– Reports to regulators
The Auditors are eligible for selection to provide
non-audit services to the extent that their skills and
experience make them a competitive and most
appropriate supplier of these services.
Each new non-audit service must be approved
by the Committee in advance of the services
being commenced.
Non-audit fees are capped to a maximum aggregate
in any financial year of 70% of the average of the
statutory audit fees charged in the previous three
consecutive financial years. In the case of this cap,
audit-related services concerning work required by
national legislation are excluded.
Permissible non-audit services
Including, but not limited to:
– Work related to mergers, acquisitions, disposals, or circulars
– Benchmarking services
– Corporate governance advice
Prohibited services
In line with the FRC’s ethical standards, services where the Auditor’s objectivity and independence
may be compromised by the threat of self-interest, self-review, management, advocacy, familiarity,
orintimidation are prohibited. Prohibited services include:
– Tax services
– Services that involve playing any part in the management decision-making process
– Bookkeeping and preparing accounting records and financial statements
– Payroll services
– Designing or implementing internal controls
– Valuation services (except such services that have no direct effect or are immaterial to the financial
statements)
– Legal, internal, or human resources services
– Services linked to financing, capital structure and allocation and investment strategy except providing
assurance services in relation to the financial statements, such as the issuing of comfort letters in
connection with prospectuses issued by the audited entity
– Promoting, dealing in, or underwriting shares in the Company
The Auditor is prohibited from performing these
services for the Company or any subsidiary within
the Group.
Non-audit services provided by EY during the financial year ending 28 April 2024 were limited to the Half Year Review. Fees in relation to these services were
£66,520 (FY23: £63,050).
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Interaction with the External Auditor
Throughout the year, the Committee worked closely with EY and was able
to gather a good insight into the overall quality of the audit process and the
performance of key individuals within the audit team. This interaction included
private sessions with the External Auditor without management present and
regular meetings between the Audit & Risk Committee Chair and the Audit
Partner. The Committee also considered the quality of the reporting provided by
the External Auditor throughout the audit process. This included the robustness
and perceptiveness of the Auditors in handling key judgements, responding to
questions from the Committee and in their commentary where appropriate on
the systems of internal control.
The Committee considered the External Auditor’s use of professional scepticism
throughout the audit by examining areas in which the External Auditor had
challenged senior management’s assumptions. Particularly in relation to the key
areas of judgement around the significant financial reporting areas, noted above,
and the number and nature of accounting and control observations raised.
Based on these reviews, the Committee concluded that EY had applied
appropriately robust challenge and scepticism throughout the audit, that it
possessed the skills and experience required to fulfil its duties effectively and
efficiently, and that the audit was effective.
Auditor reappointment
The Committee is responsible for considering whether there should be a
rotation of the External Auditor in order to ensure continuing auditor quality and
independence, including consideration of the advisability and potential impact of
conducting a tender process for the appointment of a different External Auditor.
The Committee is also responsible for recommending to the Board whether
it should ask the shareholders to appoint, reappoint, or remove the External
Auditor at the AGM.
In its oversight of the external audit, the Committee considered whether it
would be appropriate to conduct an audit tender at this time. The Committee
took into account:
– Its continued satisfaction with the quality and independence of EY’s audit
– Any new External Auditor would need a transition period to develop sufficient
understanding of the business given the Company’s size and complexity
– Frequent changes of External Auditor would be inefficient and could lead to
increased risk and the loss of cumulative knowledge
– A change in auditor would be expected to have a significant impact on the
Company, including on the Company’s finance function
– Any change in auditor should be scheduled to limit operational disruption
The Committee also considered EY’s leadership and activities in the area of
climate change. After due consideration the Committee determined it would
not be appropriate to re-tender for the external audit at this time.
EY has expressed willingness to continue in its capacity as independent
Auditor of the Company. The Committee has recommended to the Board
the reappointment of the External Auditor for the 2025 financial year and the
Directors will be proposing the reappointment of EY at the forthcoming AGM.
The External Auditor is required to rotate the audit engagement partner every
five years. The current engagement partner, Julie Carlyle, began her appointment
at the commencement of FY20 a therefore a new audit engagement partner will
be appointed with effect from FY25.
ROBERT MOORHEAD
CHAIR OF THE AUDIT & RISK COMMITTEE
26 June 2024
Competition and Market Authority (CMA) Order 2014 Statement of
Compliance
Under CMA guidance, FTSE 350 companies are required to have held a tender
for the external audit appointment within the last ten years. On Admission to the
London Stock Exchange, in June 2019, the Audit & Risk Committee commenced
a competitive audit tender for the financial year ending 26 April 2020. Full details
of the tender process are included in the Annual Report and Accounts 2020.
EY was first appointed in 2019 after this competitive tender process. This means
that FY24 represents EY’s fifth year as the Company’s External Auditor. Under UK
legal requirements, the Company may retain EY as its External Auditor for 20 years.
The Group confirms that it was in compliance with the provisions of the
Statutory Audit Services for Large Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and Audit Committee Responsibilities)
Order 2014 during the financial year ended 28 April 2024.
EXTERNAL AUDITOR EFFECTIVENESS
It is the Committee’s responsibility to assess the effectiveness of the external
audit, including audit quality. The Committee assessed the External Auditor’s
effectiveness in September 2023 and kept this under review throughout the year
taking into account the External Auditor’s mindset and culture; skills, character
and knowledge; quality control and judgement. The assessment included:
Reviewing the Auditor’s risk assessment and audit plan
The Committee discussed EY’s risk assessment and detailed audit plan in
response to those risks. The proposed approach and planned scope of the audit
were also reviewed including the proposed materiality. The Committee was
satisfied that the audit plan was robust and covered the financial reporting risks.
The Committee also considered the balance of work completed between the
UK, US and European components along with recent acquisitions.
Proposed level of audit fees
The Committee reviewed and approved the proposed audit fees, which included
a detailed breakdown of those fees. This review also considered the level of
resources, senior leadership involvement and the use of specialist teams where
appropriate. The Committee satisfied itself that the agreed amount represented
fair value in order to deliver the quality and scale of audit sought.
Evaluation of the FRC’s Audit Quality Inspection and Supervision
Report on Ernst & Young LLP
The Committee reviewed the FRC’s Audit Quality Inspection and Supervision
Report for Ernst & Young LLP and also compared the results of the Auditor to
other audit firms. EY presented to the Audit & Risk Committee their feedback
on the findings and planned actions to respond to each of those findings. The
Committee was satisfied with the outcome of this review.
The Committee also considered how the Auditor had responded to its previous
assessments of audit quality.
Feedback from management and the Committee members
The Committee considers it important to gather feedback from management,
particularly those who are in direct contact with the audit team. Management
and Audit & Risk Committee members completed a questionnaire and the results
were reviewed by the Committee. The questions covered the following areas:
– Mindset and culture
– Skills, character and knowledge
– Quality control
– Judgement
The feedback received was positive in all areas. Each year the External Auditor
meets with management to review the audit process, obtain feedback and make
recommendations for improvement in the following year’s audit.
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ESG COMMITTEE REPORT
MEMBERS
Baroness (Rosa) Monckton MBE (Chair)
Tea Colaianni
Ian Carter
Brian Duffy
Robert Moorhead
Chabi Nouri
PRINCIPAL RESPONSIBILITIES
The Committee’s principal responsibilities are to:
– Provide oversight on behalf of the Board in relation to the
Company’s ESG Strategy including, ESG Strategy activities and
performance
– Oversee the ESG goals, targets and KPIs and provide
accountability for their successful delivery
– Monitor the Company’s ESG Strategy to ensure it is embedded
into core business operations, stakeholders are engaged with it
and progress against achieving related goals, targets and KPIs is
monitored
– Make sure the Company monitors current and emerging ESG
trends and adheres to relevant international standards and legal/
regulatory/governance requirements
– Provide guidance and monitor actions and initiatives taken to
prevent, mitigate and manage risks related to ESG matters which
may have a materially adverse impact on the Company and its’
stakeholders
– Collaborate with the Audit & Risk Committee and the
Remuneration Committee on matters which overlap
– Receive reports and recommendations from the ESG Steering
Group, key management stakeholders and subject matter experts
– Make recommendations to the Board in relation to the required
resourcing and funding of ESG related activity
– Oversee the Company’s public disclosures, regarding the
Company’s ESG strategy activities and performance, and review
and monitor the Company’s non-financial reporting with respect
to ESG matters.
BARONESS (ROSA) MONCKTON MBE
Chair of the ESG Committee
DEAR SHAREHOLDER
It is my pleasure to present the ESG Committee Report for the financial year
ended 28 April 2024.
The ESG Committee continues to support the Group in making good progress
across environmental, social and governance strategic initiatives, strengthening
compliance and mitigating against risk. These incremental improvements are
reflected in the improved Company’s investor rating agency scores, culminating
in the achievement of ISS ESG Prime status in May 2024.
During FY24, we advanced the Group’s ESG Strategy by conducting a materiality
assessment with key stakeholder groups with the aim of assessing the Group’s
ESG priorities. The Company also embedded its ESG goals, within the business,
by entering into a sustainability-linked financing loan.
Additionally, the Company embarked upon the use of Artificial Intelligence (AI)
technology to support us in the delivery of our ESG Strategy and reporting
requirements. The full impact of a trial to leverage AI and machine learning will
not be evident until the Group’s FY25 disclosure. However, we are already
seeing great potential to support alignment with global reporting frameworks,
engage across the value chain and play a key supporting role in the achievement
of the Group’s ESG Strategy. Further details on our AI project can be found on
page 95.
The Group’s progress towards a more sustainable future is particularly evident
in our Mappin & Webb business, which achieved CSR Jeweller of the Year at the
2023 Professional Jeweller Awards. Additionally, we successfully maintained the
Mappin & Webb’s prestigious Royal Warrant status, thanks in part to the
Group’s strong sustainability credentials.
To drive continual improvement, the Committee closely monitors best practice
and benchmarks the Company’s performance against it’s peers.
ROLE
The role of the Committee is to oversee, on behalf of the Board, the governance
of the Company’s ESG Strategy. The ESG Strategy is aligned with best practice
and stakeholder expectations and aims to be both inspiring and achievable. It is
organised into three strategic pillars: (i) People; (ii) Planet; and (iii) Product, to
align with the Group’s purpose and values, as well as wider business strategies.
The Committee supports the Audit & Risk Committee and the Remuneration
Committee, in respect of matters reserved for their remit. The Committees also
play a crucial role in monitoring environmental goals and ensuring actions are
taken to mitigate and manage climate related risks and opportunities, by making
sure they are embedded in the Company’s risk management processes, financial
decision-making and core business strategy.
The ESG Committee is supported by an ESG Steering Group which is, chaired
by the CFO. The Steering Group is made up of key members of senior
management, who each have formal operational responsibility for the
management of relevant environmental, social and governance issues. The ESG
Steering Group acts under a separate Terms of Reference and reports progress
towards the development, implementation and delivery of the Company’s ESG
Strategy into the ESG Committee. The ESG Steering Group is supported by a
number of working groups which sit under the People, Planet and Product
pillars. There is also a governance working group.
In FY24, the Committee continued to oversee the development and delivery of the
ESG Strategy, including challenging and collaborating with the Executive Directors
and senior management, to ensure ESG best practices are integrated into the
Company’s day-to-day business operations as well as the long-term strategy.
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KEY FOCUS/ACTIVITIES DURING THE YEAR
MEMBERS
I am joined on the ESG Committee by Ian Carter, Chair of the Board, and a majority
of independent Non-Executive Directors, comprising Tea Colaianni, Robert
Moorhead and Chabi Nouri. Brian Duffy, the Company’s CEO, is also a member of
the Committee and plays an instrumental role in integrating ESG matters into the
Company’s business strategy and planning, demonstrating top level commitment
from senior management in progressing the ESG Strategy
Biographies of Committee members, including details of their skills and
experience, can be found on pages 148 and 149.
The Company Secretary and General Counsel acts as Secretary to the ESG
Committee and other senior management and/or external advisers may attend by
invitation, as appropriate, for all or part of meetings. This includes the CFO, the
Head of Sustainability and ESG, the Executive Director, Global Buying and
Merchandising and, during the year, the invitation was extended to the Executive
Director HR as a demonstration of the importance the ESG Committee was
placing on caring for colleagues and communities in line with the Company Purpose.
FY24 ACTIVITIES
In July 2024, the ESG Committee recommended to the Board that the Group’s
new loan facility be linked to the achievement of near-term science-based
emissions reduction targets and circularity goals, reinforcing the Company’s
commitment to mitigating the worst impacts of climate change and supporting a
more circular economy through its’ repairs and pre-owned businesses. Updates
on the targets and KPIs are provided annually to the lenders during the term of
the loan.
We participated in the CDP, a not-for-profit charity running the global disclosure
system for companies on their environmental impact, questionnaire on climate
change the results of which will indicate how well the Group is managing climate
-related risks and opportunities. The Committee was pleased to see the
Company’s score improve year-on-year from a ‘C’ to a ‘B’. CDP scores are
relative and benchmarked against industry peers.
After continued investment in our repairs and servicing businesses, our target to
increase the number of watches kept in circulation year-on-year by >1.5% was
also successfully achieved.
Further details on our approach to managing our environmental performance
can be found on pages 92 to 128.
Treating people with respect is a fundamental value of the Watches of Switzerland
Group. During the year, the Committee recommended to the Board, which was
subsequently approved, a Human Rights Policy, which was developed following a
gap analysis undertaken during the development of our ESG Partner Standards
and through engagement with our partners at Slave-Free Alliance.
One of the highlights of the year for the ESG Committee was an ESG Board
awareness session led by Chuka Umunna, Head of EMEA ESG & Green Economy
at J.P. Morgan which gave insight into industry analysis and investor sentiment.
During this session, the Committee assessed the Group’s performance against
peers and discussed a number of topics with a focus on positioning Watches of
Switzerland as an ESG leader.
– Reviewed the ESG Committee Terms of Reference and recommended
them to the Board for approval
– Contributed to the development and delivery of the ESG Strategy, by
approving key decisions and providing accountability against goals,
targets and KPI
– Continually reviewed the progress, the Company’s ESG Strategy and
monitored progress against goals, metrics and targets in relation to the
three strategic pillars of People, Planet and Product
– Approval of recommended targets including the sustainability-linked
financing targets
– Benchmarked the Company’s performance against sustainability rating
agency reports along with the CDP questionnaire on climate change
and approved an improvement plan across ESG
– Received an in depth training session which focused on ESG matters
relating to a tailored approach as a luxury retailer, peer analysis and
market activity
– In conjunction with the Audit & Risk Committee, reviewed the
Company’s progress against recommendations by the Task Force on
Climate Related Financial Disclosures (TCFD)
– Progress towards our ESG goals were considered as part of colleague
bonus schemes, reinforcing commitment to a more sustainable future
– Reviewed the Company’s supply chain management due diligence
procedures, including third-party factory audits
– Approved activity to highlight the sustainable attributes of luxury
watches and jewellery to clients and prospective clients
– Reviewed the Company’s non-financial reporting with respect to
ESGmatters
– Key documents recommended to the Board for approval included the
annual Modern Slavery Statement, the annual review of the
Environmental Policy, a new Human Rights Policy and a new Data
Information and Security Information Statement
– Reviewed the implementation of the Company’s participation in an AI
project to enhance its’ ESG reporting
– Reviewed and approved the Materiality Assessment which took place
during the year
– Received regular updates from the Head of Sustainability and ESG on
key external drivers and stakeholder sentiment
– Approved the 2023 Annual Report and Accounts ESG Committee Report
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
TERMS OF REFERENCE
Shortly after the end of the financial year, a revised set of Terms of Reference for
the Committee were recommended to the Board for approval. In recognition of
the increasing importance of ESG committees within the listed company
environment, the Corporate Governance Institute UK and Ireland issued a guidance
note for companies on the drafting of ESG Committee Terms of Reference. The
recommendations were reflective of the revised Corporate Governance Code
changes introduced in January 2024 and were incorporated accordingly.
STAKEHOLDER ENGAGEMENT
The Committee welcomes feedback from all stakeholders to ensure their
interests are represented in the ongoing development of the Company’s ESG
Strategy and approach to ESG matters.
Colleagues choose to share their thoughts through a variety of channels,
including Colleague Listening Forums, which I attend, the annual Colleague
Engagement Pulse/Survey, throughout the year, or directly via email or
‘Workplace’ – the interactive digital Group engagement platform, which was
used to launch a new colleague incentive, called ‘Green Vibe’, which encourages
and rewards positive environmental behaviours.
The Company responds to sustainability rating agency questionnaires received
on behalf of investors and facilitates meetings and roadshows to enable investors
to ask questions.
The Head of Sustainability and ESG regularly updates the Committee with key
external drivers and stakeholder sentiment and it is also kept up to date with
supplier engagement activities to support the promotion of shared sustainability
goals and ensure due diligence.
Late in 2023, the ESG Committee recommended to the Board the approach to
be taken for a Group Materiality Assessment, which was subsequently approved.
The assessment was carried out early in 2024. The results and next steps
resulting from this assessment can be found on page 70.
Following the introduction of the ESG Partner Standards, from March 2023, all
watch and jewellery suppliers have received the ESG Partner Standards and the
Company will continue to engage all supplier partners with these standards in FY25.
OUTLOOK
We will continue to monitor the Company’s performance and review our
approach to Environmental, Social and Governance matters in FY25 to further
enhance the Company’s brands, create new business opportunities, help reduce
costs, engage stakeholders and ultimately build a successful business that is
sustainable over the long term.
Further information on the work of the Committee and the progress being
made by the Group can be found on pages 70 and 71.
BARONESS (ROSA) MONCKTON MBE
CHAIR OF THE ESG COMMITTEE
26 June 2024
“The Committee continues to
support the Group in ESG strategic
initiatives, strengthening compliance
and mitigating against risk.”
BARONESS (ROSA) MONCKTON MBE
CHAIR OF THE ESG COMMITTEE
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
COMMITTEE REPORTS
continued
175
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The Remuneration Committee’s Terms of Reference at:
thewosgroupplc.com
TEA COLAIANNI
Chair of the Remuneration Committee
DEAR SHAREHOLDER
On behalf of the Remuneration Committee, I am pleased to present the Group’s
Remuneration Committee Report for the financial year ended 28 April 2024.
FY24 business performance highlights
FY24 was a challenging year for the Group, as the economic backdrop created
challenging trading conditions across luxury retail.
– Revenue remained flat at £1,537.9 million
– Adjusted EBIT
1
decreased 18% to £134.7 million
– Operating profit decreased 33% to £120.0 million
– Return on Capital Employed
1
decreased by 840 bps from 27.9% to 19.5%
We remain confident that our strategy, exceptional client experience and strong
brand relationships will enable us to continue to drive growth and gain market
share. I would like to thank all colleagues for their continued work and dedication
this year.
KEY COMMITTEE ACTIVITIES IN FY24
In addition to its usual activities, key areas of focus for the Committee in FY24
have been:
– Ensuring our incentive framework continues to appropriately motivate and
retain our colleagues in challenging market circumstances
– Reviewing the ESG bonus underpin and monitoring performance via our
ESGdashboard
– Setting performance targets for FY24 long-term incentive awards following
finalisation of the Long Range Plan to FY28
– Agreeing deployment of our sharesave schemes in FY25
Further detail on how the Committee spent its time in FY24 can be found on
page 178.
APPLICATION OF THE REMUNERATION POLICY IN FY24
I have summarised below the application of the Remuneration Policy in FY24:
Base salary/fee increases in FY24
The annual salary review process took place in October 2023, in line with our
normal review timing. The UK salary review saw an increase of 3% for our
colleagues below senior management level. The salary review in the US saw an
increase of 3% for both Support Centre and retail colleagues.
In the UK, following our accreditation with the Living Wage Foundation, we
invested a further £0.5 million in salary increases for over 450 colleagues across
retail and support functions, to bring them in line with the 2023-2024 Real Living
Wage rates.
The CEO and CFO elected not to receive an increase in base salary in FY24.
The Chair and Non-Executive Director fees were also reviewed in December
2023. There has been no increase in respect of their fees.
REMUNERATION
COMMITTEE REPORT
Members Independent
No. of meetings
attended
Tea Colaianni (Chair) 3/3
Ian Carter 3/3
Baroness (Rosa) Monckton MBE 3/3
Robert Moorhead 3/3
Section Page
Chair’s statement 176
Fairness, diversity and wider workforce 179
At a glance 182
Summary of Directors’ Remuneration Policy and
implementation for FY25
184
Annual Report on Remuneration 186
1 This is an Alternative Performance Measure. Refer to Glossary on pages 254 to 257 for definitions
and reconciliation to statutory measures.
176
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
COMMITTEE REPORTS
continued
Annual bonus outturn for FY24
The executive performance target for the FY24 annual bonus was based on
Adjusted EBIT
1
. Whilst demand for our key brands remains strong and we
continued to gain share in the luxury watch market, the tough trading conditions
across luxury retail created by the current macroeconomic backdrop has
resulted in Adjusted EBIT of £134.7 million. This is below the threshold
performance target and there will be no bonus paid in respect of FY24.
Whilst there will be no bonus pay-out, in line with best practice and as disclosed
in last year’s Report, the Remuneration Committee still assessed our ESG
performance using the ESG dashboard developed at the start of the financial
year. The key highlights included:
– Caring for our Planet – We made good progress in establishing our ESG
Strategy and building the governance framework around this strategy
– Caring for our Colleagues – We have maintained strong engagement with
our colleagues. Our engagement score and inclusion score for the year were
76% and 77% respectively. We have also taken steps to protect and support
lower paid employees in light of the cost-of-living crisis through the Real
Living Wage commitment
– Caring for our Communities – We have continued our support of The
Watches of Switzerland Group Foundation and increased volunteering hours
by 23%.
Overall, the Committee considered that the progress against our ESG strategy
in FY24 was positive. The Committee therefore determined that the ESG
underpin would have been met and it would not have resulted in any downwards
adjustment to the formulaic bonus outcome should a bonus have been paid.
Full details on the performance outturn against the targets are shown in the ‘At
a glance’ section on page 182.
LTIP awards granted in FY24
As outlined in last year’s report, the targets for the FY24 LTIP award had not yet
been finalised at the point the report was published as the Company was in the
process of reviewing the Long Range Plan. FY24 LTIP awards were granted to
the CEO and CFO in December 2023 and the performance targets for these
awards are set out on page 186.
LTIP awards vesting in FY24
The LTIP grants awarded in July 2021 were based 80% on three-year cumulative
Adjusted EPS and 20% on three-year average ROCE performance.
The performance targets were set taking into account internal and external
expectations of performance at the time. Whilst the current macroeconomic
backdrop has resulted in tough trading conditions this year, the strong
performance of the business over the three-year performance period has
resulted in cumulative Adjusted EPS of 132.5p and three-year average ROCE of
24.9%. As such, 100% of the LTIP award is due to vest in July 2024. The award
is subject to a 24-month holding period from the vesting date.
FY24 IMPLEMENTATION OF REMUNERATION POLICY
Base salary/fee increases for FY25
Salary reviews for all colleagues in the Support Centre took place in October
2023 and the next support and retail colleague review will be in November 2024.
Non-Executive and Executive Director fees will be reviewed in December 2024.
Annual bonus for FY25
The annual bonus will be determined in line with the normal cycle. For FY25, the
annual bonus will continue to be based on Adjusted EBIT and the ESG underpin
will continue to apply for FY25. The underpin will focus on key metrics under
our three main ESG pillars:
– Caring for our Planet
– Caring for our Colleagues
– Caring for our Communities
This ESG dashboard will inform the Committee’s decision of whether or not to
apply a downwards adjustment of up to 10% to the formulaic FY25 annual
bonus outcome in order to take into account the wider ESG performance of the
Group. Key factors considered by the Committee will be disclosed retrospectively
in next year’s Annual Report and Accounts, in line with best practice.
LTIP awards to be granted in FY25
The Committee has determined that LTIP grants will be made in line with the
normal cycle of being awarded following the announcement of the FY24 results.
No changes are proposed to the LTIP award levels and these will continue to be
200% of base salary for the CEO and 175% of base salary for the CFO. In line
with last year’s grant, the LTIP measures will be based on a three-year cumulative
Adjusted EPS and three-year average ROCE with weightings of 80% and 20% of
maximum respectively. ROCE is a Key Performance Indicator (KPI) and measures
the efficiency with which the Group is able to utilise its capital. Strong average
ROCE performance combined with continued growth in earnings is critical in
ensuring the successful execution of our long-term strategy and growth
ambitions. In advance of the LTIP grants being made, the Committee considered
whether the proposed award levels were appropriate, reflecting on the change
in the Group’s share price since the FY24 LTIP grant. The Committee did not
feel it would be appropriate to adjust the award levels at this stage, but will retain
the discretion to review the outcome at the point of vest.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Wider workforce considerations and helping our employees with the
cost-of-living crisis
The Watches of Switzerland Group always strives to be an organisation that is
inclusive, rewarding and fair to all colleagues. It is the unwavering commitment
from our colleagues that has been critical to the Group as we navigated the
challenging trading conditions across luxury retail. During this time, the
Committee has been acutely aware of the challenges our colleagues have been
facing because of the current inflationary environment. As a result, the overall
salary budget for the Group was set with the focus being on providing the largest
increases to those colleagues on the lowest incomes by continuing our
commitment to pay the Real Living Wage.
The Watches of Switzerland Group continues to be an organisation that values
all colleagues across the business, particularly those on the lowest salaries. In July
2023, we were proud to be accredited by the Living Wage Foundation, making
a commitment to paying all our UK colleagues the minimum real living wage to
ensure that they receive sufficient income to meet their basic needs. In the US,
we pay above state minimum to all our colleagues.
We again held Listening Forums in FY24. At these forums we gather views on a
wide range of issues, including remuneration. Specifically, at the Listening Forum
held in October 2023, attended by Baroness (Rosa) Monckton MBE in her
capacity as the Designated Non-Executive Director for Workforce Engagement,
representatives were invited to provide feedback on additional benefits that
colleagues would value, outside of base pay.
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As a result of this exercise, we improved our retail commission and bonus
structure in the UK. In the UK, we continue to provide the Watches of
Switzerland Group Support Fund, which offers financial support by way of a loan
for those most impacted by the cost-of-living crisis. This has been utilised by a
number of our colleagues and we are pleased to have provided assistance and
support to those who requested help.
We will continue to monitor this area and make adjustments as necessary.
During the year the Committee reviewed some aspects of our approach to
remuneration below board level and made changes to support ongoing retention
and motivation in a challenging economic and talent environment. Changes made
included removing bonus deferral for colleagues below board and awarding
share incentives to support retention and motivation.
Engagement with shareholders
I would like to take this opportunity to thank our shareholders for their support of
our Directors’ Remuneration Report at our 2023 AGM which received over 97%
of votes cast in favour. We have engaged with shareholders and their representatives
in recent years as we have developed our approach to remuneration at the
Group and have always received valuable insight and feedback.
In conclusion
The remainder of the Remuneration Report is split into four parts:
Fairness, diversity and wider workforce considerations
This section contains discussions on the Company’s initiatives in colleague and
stakeholder engagement. In addition, we have included a report on specific areas
in relation to wider workforce remuneration which the Committee reviewed
during the course of the year.
At a glance section
The ‘At a glance’ section provides a summary of the payments made to the
Executive Directors during FY24.
Summary of Directors’ Remuneration Policy
This section summarises the Directors’ Remuneration Policy approved by
shareholders at the 2023 AGM, along with details of how we propose to
implement the Policy during FY25.
Annual Report on Remuneration
This section summarises remuneration decisions during the past year. This includes
details of annual bonus and long-term incentive awards granted and vesting during
the year.
I hope that you will find this year’s report clear, transparent and informative. If
you wish to discuss any aspect of this Remuneration Report, I would be happy
to hear from you. You can contact me through our Company Secretary and
General Counsel, Laura Battley. I will also be available at the Company’s AGM at
2.30pm on Tuesday 3 September 2024 to answer any questions.
On behalf of the Remuneration Committee and the Board.
TEA COLAIANNI
CHAIR OF THE REMUNERATION COMMITTEE
26 June 2024
The following sets out the main items considered by the Remuneration
Committee during the year:
Key agenda items
– Ensuring our incentive framework continues to appropriately motivate and
retain our employees
– Approved a robust ESG underpin for the annual bonus
– Approving the Directors’ Remuneration Report for FY23
– Approving the formulaic outcomes under the FY23 bonus, taking into
account the considerations of wider stakeholders
– Reviewing and approving the performance measures for the FY24 bonus
plan to ensure alignment with strategic objectives and shareholder
interests
– Granting awards under the LTIP and measures for the FY24 LTIP grant
HOW THE REMUNERATION COMMITTEE SPENT ITS TIME IN FY24
– Receiving reports and advice from advisers on a range of matters including
senior executive pay, market themes and trends, and updated proxy
adviser and institutional investor guidance
– Reviewing wider workforce remuneration
– Preparation of the CEO pay ratio
As a Remuneration Committee, it is our responsibility to make decisions
which support the Group’s long-term business strategy, and which align with
the Group’s culture and values. We must balance this with our desire to
reflect best practice remuneration and high standards of corporate
governance. We maintain an ongoing dialogue with shareholders and proxy
advisers to understand their views. We recognise that executive remuneration
is an area of public interest and we have worked hard to ensure that full
transparency has been provided in this year’s Directors’ Remuneration
Report on the Group’s remuneration practices.
178
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
COMMITTEE REPORTS
continued
As part of our commitment to fairness, openness and inclusivity, as in previous years, we have included this dedicated section to provide more information on our
communication with colleagues, our remuneration principles and wider workforce pay conditions.
COMMUNICATIONS WITH COLLEAGUES
We have a number of channels where colleagues’ views on remuneration can be captured. For example, colleagues are able to talk about pay matters at the
Company’s Listening Forums and express their views through the Company’s Colleague Engagement Surveys. We are committed to giving our colleagues a voice
and they have always had the opportunity to interact with our Directors. We have a dedicated Designated Non-Executive Director for Workforce Engagement,
Baroness (Rosa) Monckton MBE, responsible for gathering our colleagues’ views and presenting these to the Board.
How we engaged with colleagues in FY24
Regional Listening Forum
meetings and our Global
Listening Forum
Consultation with our
Listening Forum members
and other colleague groups
Engagement survey and
understanding what
matters to our colleagues
Innovative and accessible
communication portals
including Workplace
Colleague engagement,
input to new office
environment and new
ways of working
Visits to showrooms by
the Chair of the Board
and other Board members
Rosa is also Co-Chair of UK, US and Global Listening Forums. We held four regional Listening Forums and one Global Listening Forum in March 2024, all of which
are attended by senior management including David Hurley, President North America & Deputy CEO, Craig Bolton, President UK & Europe and Brian Duffy, CEO.
REMUNERATION COMMITTEE REPORT
A process was introduced in 2020, which enables the Remuneration Committee to carry out its oversight and review of wider workforce pay and policies and to
ensure that they are designed to support the Company’s desired culture and values. When conducting its annual review, the Remuneration Committee is paying
particular attention to:
– Whether the element of remuneration is consistent with the Company’s remuneration principles
– If there are differences, whether they are objectively justifiable
– Whether the approach seems fair and equitable in the context of other employees
Once the Remuneration Committee has conducted its review of the wider workforce remuneration and incentives, it will consider the approach applied to the
remuneration of the Executive Directors and senior management. In particular, the Remuneration Committee is focused on whether the approach to the
remuneration of the Executive Directors and senior management is consistent with that applied to the wider workforce.
The Remuneration Committee remains satisfied that the approach to remuneration across the Group is consistent with the Company’s principles of remuneration.
Furthermore, in the Remuneration Committee’s opinion, the approach to executive remuneration aligns with the wider Company pay policy and there are no
anomalies specific to the Executive Directors.
GENDER PAY
UK legislation requires employers with more than 250 employees to disclose information on their gender pay gap on an annual basis. We have published our sixth
disclosure of the pay gap based on amounts paid in the April 2023 payroll. The bonus gap was based on incentives paid in the year to 31 March 2023.
The mean gender pay gap at the Group is 20%, compared to 21% last year. The median bonus gap at the Group is 42%, compared to 40% last year. Whilst there
is still a way to go, we are encouraged by the result. The full report, including details on the initiatives we have underway to help close our gender pay gap, is available
on our website thewosgroupplc.com
FAIRNESS, DIVERSITY AND WIDER
WORKFORCE CONSIDERATIONS
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The following table sets out a summary of the information received by the Remuneration Committee on the Group’s remuneration structure:
Element of remuneration Overview of practice at the Watches of Switzerland Group PLC
Alignment with remuneration
principles
The Group’s remuneration principles are designed to enable fair and flexible reward structures to be developed and
implemented across the entire organisation. We continue to review and redesign our policies in line with this principle.
Salary Salaries are set to reflect the market value of the role, and to aid recruitment and retention. Remuneration for all UK
colleagues is above the Real Living Wage. We also monitor closely the rates of pay of people who are training with us
to make sure they remain fair and competitive.
Salary increases are normally awarded annually following the Company’s main pay review and are typically between
2% and 3%. This year, our UK Support Centre pay review delivered an increase of 3% for all colleagues below
management level. In April 2024, we implemented adjustments in support and retail salaries to comply with our
commitment to the Real Living Wage. Typically, the Executive Directors will receive no more than the same
percentage increase as the wider workforce. The US awarded pay increases of 3% to support and retail colleagues.
From time to time, ad hoc pay reviews are conducted in order to make market or inflationary adjustments and ensure
the Company’s targeted living wage differential is maintained.
Annual variable pay All Watches of Switzerland Group colleagues are entitled to earn variable pay linked to stretching performance targets:
Annual bonus plan
Subject to service and eligibility, our colleagues in support functions participate in the Company’s annual bonus plan
and are rewarded based on financial performance measured using Adjusted EBIT . As outlined in last year’s Directors’
Remuneration Report, a robust ESG underpin applies to annual bonus awards.
Bonuses typically operate in one of three formats depending on the level of seniority and line-of-sight to performance:
– For roles with a global remit, bonuses are based 100% on Group performance
– For roles that wholly or mainly concentrate on either our UK or US operations, bonuses are based 100% on the
performance of the business in the relevant country
– For certain business unit roles or regional roles, 50% of bonus is based on local performance (e.g. UK/US) and 50% is
based on the performance of the relevant business unit
In line with market practice, the bonus quantum and the question of whether it is paid solely in cash or in a mixture of
cash and deferred shares depends on the level of seniority of the colleague.
Bonuses to eligible colleagues are normally paid in July, when performance conditions have been met.
Sales commission plans
A range of plans exist for our retail team members which reflect the size and complexity of the showrooms. Targets
can be based on individual objectives for larger showrooms or team-based objectives for smaller showrooms. The
majority of these plans are paid monthly and biannually.
We review these schemes periodically to ensure they adhere to our reward principles and support good client
outcomes.
LTIP The LTIP is currently available to Executive Directors and senior management. LTIP awards are normally granted
annually. Malus and clawback provisions are in place.
The vesting period is three years and all LTIP participants are subject to an additional two-year holding period. Eligible
colleagues and details of the award opportunity are set out below.
Level No. of eligible colleagues Targeted ranges (% of salary)
Group CEO 1 200%
Group CFO 1 175%
Senior management 17 20 - 80%
18 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
COMMITTEE REPORTS
continued
Element of remuneration Overview of practice at the Watches of Switzerland Group PLC
Pension The Company operates a UK defined contribution pension arrangement, which all UK employees are entitled to
participate in.
The Executive Directors are entitled to receive an employer pension contribution of 3% of salary, which is aligned
with the level available to the majority of the wider workforce in the UK. The CEO and the CFO waive their
employer pension contributions.
Arrangements for US employees vary depending on territory. In some locations the Company offers a 3% 401k
employer match and in other locations a 2% match is offered. We offer an employer pension in all countries in Europe
excluding Germany.
Benefits We offer a suite of benefits across the Group, which are designed to be appropriate for different roles and functions
and countries. These include health insurance (for all US colleagues and some UK and Europe colleagues), and in the
UK, season ticket loans, a cycle to work scheme, a Health Cash Plan and enhanced maternity pay. Life cover is offered
to varying degrees depending on grade and region.
We operate an Employee Assistance Programme (EAP) in the UK, US and Europe. This is intended to help employees
deal with any personal problems that may adversely impact their work performance, health and/or wellbeing and
financial support.
All of our colleagues are entitled to staff discounts, subject to the rules of the relevant schemes.
All-employee share schemes Our colleagues are able to participate in our employee sharesave schemes in the UK and US.
A summary of the Company’s general policies is as follows:
Policy Description
Reward We have an ethical pay policy, whereby we ensure that our pay rates are ahead of the Real Living Wage in the UK and we
periodically benchmark salaries against market data. We have implemented interim reviews for relevant groups of colleagues when
deemed necessary to guarantee compliance with the legislation, and to ensure that our pay rates remain competitive with those of
our main competitors.
Recognition and
celebration
Our UK recognition programme, VibE, provides all colleagues with the ability to recognise and celebrate achievements across the
colleague population instantly via a digital platform. Workplace, our internal community based social platform, provides Company
news, and enables our colleagues to recognise and celebrate achievements across the Group.
Development
opportunities
We are proud of our wide range of training and development programmes in the UK and US and we work closely with our brand
partners to ensure that our colleagues are true experts in our category. Our elearning modules make learning and personal
development accessible to all.
Equal opportunities
and diversity
initiatives
The Company is committed to an active Diversity & Inclusion Policy from recruitment and selection to training and development,
performance reviews and promotion. All decisions relating to employment practices are objective, free from bias and based solely
upon work criteria and individual merit. The Company is responsive to the needs of its colleagues, clients and the community. We
are an organisation that seeks to make use of everyone’s talents and abilities, and where diversity is valued. The Company ensures
that its promotion and recruitment practices are fair and objective and encourages the continuous development and training, as well
as the provision of equal opportunities for the training and career development of all colleagues. Further details of this are shown
on page 80.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
REMUNERATION PRINCIPLES
Our reward strategy is designed to support and reinforce our purpose and values, and to reward all of our colleagues for delivering against our strategic objectives.
The remuneration principles that we have developed across the Group are cascaded throughout the organisation.
Current Directors’ Remuneration Policy
Fixed
Salary
Reflects the value of the individual, their role, skills, experience and contribution to the business
Benefits
Aligned with all other colleague arrangements
Pension
Alignment of employer pension contributions with the wider workforce at 3%. The CEO and CFO waive their pension contribution
Variable
Annual Bonus Plan
Incentivises achievement of annual objectives and aligns Director and shareholder interests by delivering one-third in deferred shares
LTIP
Provides alignment with shareholders and motivates key individuals to achieve long-term targets and deliver sustainable performance
WHAT IS THE LINK TO COMPANY STRATEGY?
The following diagram shows the link between our Remuneration Policy and our strategy through looking at our KPIs, which measure the successful
implementation of that strategy and the performance conditions we use for our incentive plans. Our FY24 performance against our KPIs is also shown below:
AT A GLANCE
KPIs
REVENUE
£1, 537.9m
FY23: £1,542.8m
ADJUSTED EBIT
1
£134.7m
FY23: £165.1m
RETURN ON CAPITAL EMPLOYED
1
19.5%
FY23: 27.9%
OPERATING PROFIT
£120.0m
FY23: £178.6m
ADJUSTED EPS
1
38.0p
FY23: 52.7p
CASH GENERATED FROM OPERATIONS
£225.5m
FY23: £239.2m
BONUS PLAN
Performance condition: 100% based on Adjusted EBIT
Reflects the successful delivery of our Adjusted EBIT
KPIsubject to an ESG underpin, which can reduce the
bonus up to 10% taking into account progress against
our ESG strategy
LTIP
Performance conditions: Adjusted EPS (80%) and
Return on Capital Employed (20%)
Reflects the successful delivery of a number of KPIs
overthe longer term: Adjusted EPS
and Return on
Capital Employed
1 This is an Alternative Performance Measure. Refer to Glossary on pages 254 to 257 for definitions and reconciliation to statutory measures.
182
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS’ REMUNERATION REPORT
REMUNERATION IN RESPECT OF FY24
Total compensation
Brian Duffy (CEO) Anders Romberg (CFO)
Salary: £500,000 Salary: £37 7,082
Taxable benefits::
1
£25,190 Taxable benefits:
1
£8,523
Annual bonus:
2
– Annual bonus:
2
–
LTIP:
3
– Value at grant:
– Share price depreciation:
£399,849
£999,999
£(600,150)
LTIP:
3
– Value at grant:
– Share price depreciation:
£47,617
£119,08 8
£(71,471)
Pension:
4
– Pension:
4
–
Total: £925,039 Total: £433,222
1 Taxable benefits include one or more of private healthcare, accommodation when attending different offices, company car (including private fuel) or a car allowance. The CEO received a one off payment of £909
which was in respect of ten years service in February 2024.
2 No bonus was paid in respect of FY24 performance.
3 The FY22 LTIP award vested at 100% of maximum and a two-year holding period applies following vesting. Of the total amount, £600,150 for the CEO reflects the share price depreciation in the period since
grant. There was no discretion exercised in respect of the awards. The FY22 LTIP award has been valued based on the three month average share price to year-end of £3.77. Anders Romberg retained a
pro-rated portion of his FY22 LTIP award when he retired as CFO on 1 January 2022. The value shown in the single figure table reflects the portion of the LTIP award he retained (12,642shares) of the original
65,021 shares granted. Anders also retained a pro-rated portion of his FY21 LTIP award (90,386 shares of the original 191,406 shares granted). These shares vested in FY23 and had a value of £648,971.
4 The CFO elected to waive his pension contributions. During the course of FY24, the CFO was auto-enrolled into the Group defined contribution pension scheme and payments of £8,550 were made. However
all payments have been reversed and he has since opted out.
For further detail refer to page 186.
ANNUAL BONUS OUTCOMES IN FY24 (AUDITED)
Performance
condition Weighting
Threshold
performance
required (20% of
max bonus)
Target performance
required (50% of
max bonus)
Maximum
performance
required (100% of
max bonus)
Actual
performance
Percentage of
maximum
performance
achieved
Bonus value achieved
Brian Duffy Anders Romberg
Adjusted EBIT 100% £165.3m £174.0m £182.7m £134.7m 0% – –
For further detail refer to page 186.
LTIP OUTCOMES IN FY24
The LTIP awards granted in FY22 were based 80% on three-year cumulative Adjusted EPS and 20% on three-year average ROCE performance.
As a result of Adjusted EPS and ROCE performance over the three-year performance period, 100% of the LTIP award is due to vest in July 2024. A two-year holding
period will apply following vesting.
Performance condition Weighting
Threshold performance
required (20% of max
LTI P)
Target performance
required (60% of max
LTI P)
Maximum
performance required
(100% of max LTIP)
Actual
performance Vesting level
Cumulative Adjusted Earnings Per Share 80% 103.7 109.1 114.6 132.5 100%
Average ROCE 20% 21.0% 22.1% 23.2% 24.9% 100%
For further detail of the performance outcomes refer to page 186.
18 3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The table below sets out a summary of our Remuneration Policy for Executive
and Non-Executive Directors, as approved by shareholders at the AGM on
1September 2022, as well as its proposed implementation for FY25. Our full
Remuneration Policy can be found in our Annual Report and Accounts 2022.
The Policy has been tested against the six factors listed in Provision 40 of the UK
Corporate Governance Code 2018 (the Code):
Clarity
– The Remuneration Policy sets out clearly the basis for any payments and the
terms of the incentive arrangements operated
– The performance conditions used for the annual bonus plan and long-term
Incentive Plan are based on the Group’s KPIs ensuring direct alignment
between the successful implementation of the strategy and the reward
provided to the Executive Directors
Simplicity
– The incentive plans are in line with standard UK market practice and
therefore should be familiar to all stakeholders
Risk
– Setting defined limits on the maximum awards which can be under the
annual bonus plan and the long-term incentive plan
– Requiring the deferral of a substantial proportion of the incentives in shares
for a material period of time
– Aligning the performance conditions for incentives with the strategy of the
Company
– Ensuring a focus on sustainable performance through the long-term incentive
plan and shareholding guidelines as well as post-employment shareholding
requirements
– Ensuring there is sufficient flexibility to adjust incentive payments through
malus and clawback
– Ensuring an overriding discretion to depart from formulaic outcomes under
the incentives
These features mitigate against the inherent risk of incentives creating the
wrong behaviours by:
– Limiting the maximum value that can be earned
– Deferring a significant proportion of the value earned in shares, for the
long term which helps ensure that the performance earning the award was
sustainable and thereby discouraging short-term behaviours
– Aligning any reward to the agreed strategy of the Company
– Focusing the long-term incentive plan on sustainable performance over the
longer term
– Reducing the awards or cancelling them if the behaviours giving rise to the
awards are inappropriate
– Reducing the awards or cancelling them, if it appears that the criteria on
which the award was based do not reflect the underlying performance of
the Group
Predictability
The Remuneration Policy clearly sets out the potential rewards available to the
Executive Directors depending on the performance achieved. In addition, all the
safeguards set out in the Risk section are disclosed as part of the Remuneration Policy.
Proportionality
The Company’s incentives clearly reward the successful implementation of the
strategy and, through deferral and measurement of performance over a number
of years, ensure that the Executive Directors have a strong drive to ensure that
the performance is sustainable over the long term. The Committee has
overriding discretion to depart from the formulaic outcomes under the incentive
plans if they do not reflect underlying business performance or the experience
of stakeholders which mitigates the risk of reward for poor performance.
Alignment to culture
A key tenet of the Group’s culture is a focus on ensuring long-term sustainable
performance. This is reflected in the type of performance conditions used in the
incentive plans.
SUMMARY REMUNERATION POLICY
SUMMARY REMUNERATION POLICY FOR EXECUTIVE DIRECTORS
Element Operation and opportunity Implementation for FY25
Fixed pay
Base salary
Set at a level which is market competitive to attract
and retain Executives and at a level which reflects
an individual’s experience, role, competency and
performance.
The Executive Directors elected not to receive a salary increase with effect from
October 2023 with the salary budget focused on providing increases to lower
paidworkers.
Base salary levels for FY25 are therefore:
– CEO: £500,000 (no change)
– CFO: £380,000 (no change)
Salary reviews for all colleagues will take place in November 2024. To the extent
that there are increases, the Executive Directors will receive no more than the
same percentage increase as the wider workforce.
Benefits
Market standard benefits including (but not limited
to) company car, private health insurance and life
insurance.
The CFO has chosen to waive his car allowance.
Pension
Maximum value of the employer pension
contribution allowance is in line with the majority
colleague contribution (currently 3%of salary).
The CEO and the CFO have chosen to waive their employer pension contributions.
18 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS’ REMUNERATION REPORT
continued
Element Operation and opportunity Implementation for FY25
Variable pay
Annual bonus
plan
– Maximum opportunity of 150% of salary (CEO)
and 125% of salary (CFO).
– 20% of the maximum bonus pays out for threshold
performance, with 50% paying out for on-target
performance and 100% paying out for maximum
performance.
– Two-thirds of the bonus award will be paid outin
cash with the remaining one-third deferred into
shares and subject to a
three-year vesting period.
– Measures may include financial or non-financial
measures, however at least 50% of the awards will
be linked to financial measures.
No change to maximum opportunity.
For FY25, the annual bonus will be based 100% on Adjusted EBIT. Reflecting the
focus throughout the Group on achieving the Company’s ESG objectives,
theCommittee has agreed that the ESG underpin will continue to apply for FY25.
The underpin will focus on key metrics under our three main ESG pillars:
– Caring for our planet
– Caring for our colleagues
– Caring for our communities
A detailed ESG dashboard will inform the Committee’s decision of whether or not
to apply a downwards adjustment of up to 10% to the formulaic FY25 annual
bonus outcome in order to take into account the wider ESG performance of the
Group. Key factors considered by the Committee will be disclosed retrospectively
in next year’s report, in line with best practice.
Long-term
incentive plan
– Maximum opportunity of 200% of salary (CEO)
and 175% of salary (CFO).
– A two-year holding period will apply following the
three-year vesting period.
– Where material changes are made to
LTIPperformance conditions, it would be
theCommittee’s intention to consult
withshareholders.
No change to maximum opportunity.
The LTIP awards will continue to be based 80% on three-year cumulative Adjusted EPS
and 20% on three-year average ROCE.
LTIP awards for FY25
– CEO: 200% of salary
– CFO: 175% of salary
The LTIP awards will be granted in July 2024. The payouts under the LTIP for levels
of performance will be as follows:
THRESHOLD* TARGET* MAXIMUM*
(20% of max LTIP) (60% of max LTIP) (100% of max LTIP)
*Straight line between these points
Awards will be based 80% on three-year cumulative Adjusted EPS and 20% on
three-year average ROCE. Targets are as follows:
Adjusted EPS: 178.2p (Threshold); 187.6p (Target), 196.9p (Maximum)
ROCE: 22.7% (Threshold); 23.9% (Target); 25.1% (Maximum)
Shareholding
requirements
– 200% salary minimum shareholding requirement
which can be built up within five years of appointment.
– Executive Directors required to hold 100% of their
pre-cessation shareholding requirement for 24-months
from the date they step down from the Board.
No change.
SUMMARY REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS (NEDS)
Element Operation and opportunity Implementation for FY25
Company
Chair and
Non-
Executive
Director fees
– Non-Executive Directors are paid an annual fee
and additional fees for Chairship of committees,
therole of Senior Independent Director and
membership of committees
– Fees reflect responsibilities and time commitments
for the role
– The Chair does not get any additional fees for
Committee membership
The Chair and NED fees were not increased during the year. Fees for FY25 are
therefore asfollows:
Chair £190,000 (no chne)
NED base fee £50,000 (no chne)
Senior Independent Director fee £10,000 (no chne)
Committee Chair fee £10,000 (no chne)
Audit & Risk Committee, Remuneration Committee, ESG
Committee membership fee
£5,000 (no chne)
Nomination Committee membership fee £2,500 (no chne)
18 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED)
The table below sets out the single total figure of remuneration and breakdown for each Director in respect of FY24. Figures provided have been calculated in
accordance with the UK disclosure requirements: The Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2019
(Schedule 8 to the Regulations).
Name Period
Salary/fees
£
Taxable
benefits
1
£
Bonus
2
£
LTI P
3
£
Pension
4
£
Other
£
Total
£
Total fixed
remuneration
£
Total variable
remuneration
£
Executive Directors
Brian Duffy FY24 500,000 25,190 – 399,849
999,999
*
(600,150)
**
–
–
925,039 525,190 399,849
FY23 500,000 24,893 562,500
7
2,242,188
1,000,000
*
1,242,188
**
–
–
3,329,581 524,893 2,804,688
Anders Romberg
5
FY24 377, 082 8,523 – 47,617
119,08 8
*
(71,471)
**
_
–
433,222 385,605 47,67
FY23 – – –
–
– –
–
–
–
Bill Floydd FY24 13,768 462 –
–
–
–
14,230 14,230 –
FY23 380,000 37,837 237, 50 0 – 11,40 0
–
666,737 429,237 237, 50 0
Non-Executive Directors
6
Ian Carter
FY24 190,000 19,820 n/ n/ n/
n/
209,820 209,820 n/
FY23 190,000 8,688 n/ n/ n/
n/
198,688 198,688 n/
Tea Colaianni
FY24 82,500 230 n/ n/ n/
n/
82,730 82,730 n/
FY23 82,500 1,349 n/ n/ n/
n/
83,849 83,849 n/
Robert Moorhead
FY24 72,500 – n/ n/ n/
n/
72,500 72,500 n/
FY23 72,500 – n/ n/ n/
n/
72,500 72,500 n/
Baroness (Rosa)
Monckton MBE
FY24 72,500 – n/ n/ n/
n/
72,500 72,500 n/
FY23 72,500 – n/ n/ n/
n/
72,500 72,500 n/
Chabi Nouri FY24
60,000 3,848 n/ n/ n/
n/
63,848 63,848 n/
FY23 59,167 4,693 n/ n/ n/ n/ 63,860 63,860 n/
*Value at grant ** Share price appreciation/(depreciation)
1 Taxable benefits for Executive Directors includes one or more of: private healthcare; accommodation when attending different offices; company car (including private fuel); or a car allowance. Taxable benefits for
Non-Executive Directors includes reimbursement for travel and accommodation costs.
2 The annual bonus is paid two-thirds in cash and one-third in shares, with the portion deferred into shares subject to continued employment for three years but with no further performance conditions attached.
This year the performance threshold was not met and therefore no bonus was paid.
3 The FY22 LTIP award vested at 100% of maximum and a two-year holding period applies following vesting. Of the total amount, £(600,150) for the CEO reflects the share price depreciation in the period since
grant. There was no discretion exercised in respect of the awards. The FY22 LTIP award has been valued based on the three-month average share price to year-end of £3.77. The value of the FY21 LTIP award
which vested in FY24 has been updated to reflect the share price on the date of vest of £7.18.
4 The CFO and CEO waive their pension contributions. During the course of FY24, the CFO was auto-enrolled into the Group defined contribution pension scheme and payments of £8,550 were made. However
all payments have been reversed and he has since opted out.
5 Anders Romberg retained a pro-rated portion of his FY22 LTIP award when he retired as CFO on 1 January 2022. The value shown in the single figure table reflects the portion of the LTIP award he retained
(12,642shares) of the original 65,021 shares granted. Anders also retained a pro-rated portion of his FY21 LTIP award (90,386 shares of the original 191,406 shares granted). These shares vested in FY23 and had
a value of £648,971.
6 Non-Executive Director fees are in respect of Committee meetings. There has been no increase in respect of any of the individual fee components.
7 Of the £562,500 bonus award, the CEO donated £250,000 to The Princes Trust.
ANNUAL REPORT ON REMUNERATION
18 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS’ REMUNERATION REPORT
continued
ANNUAL BONUS OUTCOMES IN FY24 (AUDITED)
The maximum bonus opportunity for the CEO and CFO for FY24 was 150% and 125% of salary respectively. Two-thirds of the bonus award is paid out in cash
with the remaining one-third deferred into shares and subject to a three-year vesting period.
Details of the targets used to determine bonuses in respect of FY24 and the extent to which they were satisfied are shown in the table below:
Performance
condition Weighting
Threshold
performance
required (20% of
max bonus)
Target performance
required (50% of
max bonus)
Maximum
performance
required (100% of
max bonus)
Actual
performance
Percentage of
maximum
performance
achieved
Bonus value achieved
Brian Duffy Anders Romberg
Adjusted EBIT 100% £165.3m £174.0m £182.7m £134.7m 0% – –
Whilst there will be no bonus pay-out, in line with best practice and as disclosed in last year’s report, the Remuneration Committee still assessed our ESG
performance using the ESG dashboard developed at the start of the year. The key highlights included:
– Caring for our planet – We made good progress in establishing our ESG Strategy and building the governance framework around this strategy
– Caring for our colleagues – We have maintained strong engagement with our colleagues. Our engagement score and inclusion score for the year were 76%
and 77% respectively. We have also taken steps to protect and support lower paid colleagues in light of the cost-of-living crisis through the Real Living Wage
commitment
– Caring for our communities – We have continued our support of The Watches of Switzerland Group Foundation and increased volunteering hours by 23%
Overall, the Committee considered that the progress against our ESG strategy in FY24 was positive and we have delivered continuous improvements across our
environmental and social activities in FY24. The Committee therefore determined that the ESG underpin would have been met and it would not have resulted in
any downwards adjustment to the formulaic bonus outcome, should a bonus have been paid.
LONG-TERM INCENTIVE OUTCOMES IN FY24
LTIP awards granted in July 2021 were subject to performance to the end of FY24. Details of the three-year cumulative Adjusted EPS and three-year average ROCE
targets attached to these awards and the extent to which they were satisfied are shown in the table below. A two-year holding period applies to long-term incentive
awards following vesting.
Performance condition Weighting
Threshold performance
required (20% of max
LTI P)
Target performance
required (60% of max
LTI P
Maximum
performance required
(100% of max LTIP)
Actual
performance Vesting level
Cumulative Adjusted Earnings Per Share 80% 103.7 109.1 114.6 132. 5 100%
Average ROCE 20% 21.0% 22.1% 23.2% 24.9% 100%
LONG-TERM INCENTIVES AWARDED IN FY24 (AUDITED)
The table below sets out the details of the long-term incentive awards granted in FY24, where vesting will be determined according to the achievement of
performance conditions that will be tested based on performance to the end of FY26.
Name
Award
type
Basis on which
award made
Face value
of award
Shares
awarded
Percentage of award
vesting at threshold
performance (%)
Maximum percentage
of face value that
could vest (%)
Performance
conditions
Brian Duffy il-cost otions nnul – 200% of slry £999,999 149,365 20% 100% EPS (80%)
ROCE (20%)
Anders Romberg il-cost otions nnul – 175% of slry £664,994 99,327 20% 100% EPS (80%)
ROCE (20%)
The awards were granted on 11 December 2023; the face value is calculated with reference to a share price of £6.70, being the closing share price on 8 December 2023.
Awards are based 80% on three-year cumulative Adjusted EPS and 20% on three-year average ROCE over the period FY24 to FY26. Targets are as follows:
– Cumulative Adjusted EPS: 189.9p (Threshold); 199.9p (Target); 209.9p (Maximum)
– Average ROCE: 23.7% (Threshold); 24.9% (Target); 26.2% (Maximum)
187
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
DEFERRED SHARE AWARDS GRANTED IN FY24 (AUDITED)
The table below sets out the details of the deferred share awards granted under the Company’s 2019 Annual and Deferred Bonus Plan during FY24.
Name
Award
type
Basis on which
award made
Face value
of award
Shares
awarded
Brian Duffy Nil-cost options Deferral of FY23 bonus £187,496 24,801
The award for Brian Duffy was granted on 20 July 2023; the face value is calculated with reference to a share price of £7.56, being the closing share price on 19 July
2023. The awards will vest on 20 July 2026.
Anders Romberg rejoined the company on 12 May 2023 and therefore did not receive an annual bonus in respect of FY23.
DIRECTORS’ SHARE INTERESTS (AUDITED)
Name
Shares held directly
Deferred
shares not
subject to
performance
conditions
LTI P ve ste d
but not yet
exercised
LTIP interests
subject to
performance
conditions
LTIP interests
not subject to
performance
conditions
Shareholding requirement
Current
shareholding
Beneficially
owned % Salary
Shareholding
requirement met?
Executive Directors
Brian Duffy 7,696,999 7,696,999 83,545 682,870 388,766 – 200% Yes
Anders Romberg 1,195,864 1,195,864 12,853 285,730 111,969 – 175% Yes
Non-Executive Directors
Ian Carter 154,700 154,700 – – – – n/ n/
Tea Colaianni 32,947 32,947 – – – – n/ n/
Robert Moorhead 30,620 30,620 – – – – n/ n/
Baroness (Rosa) Monckton MBE 8,904 8,904 – – – – n/ n/
Chabi Nouri – – – – – – n/ n/
There have been no changes to shareholdings between 28 April 2024 and the date of this Report.
The market price of shares at 26 April 2024 was £3.44 and the range during FY24 was £3.32 to £8.12.
PAYMENTS TO PAST DIRECTORS AND PAYMENTS FOR LOSS OF OFFICE
No payments were made to past directors or for loss of office in FY24. Bill Floydd stepped down from the Board on 12 May 2023. Details of his departure
arrangements were disclosed in the 2023 Annual Report and Accounts on page 169.
REMUNERATION AND ALIGNMENT WITH PERFORMANCE
CEO pay ratio
Our CEO to employee pay ratios for FY20 to FY24 are set out in the table below:
Financial year Method used
25th percentile
pay ratio
50th percentile
pay ratio
75th percentile
pay ratio
FY24 (reported) Option A 37:1 32:1 25:1
FY23 (reported) Option A 144:1 124:1 92:1
FY22 (reported) Option A 206:1 174:1 128:1
FY21 (reported) Option A 61:1 51:1 37:1
FY20 (reported) Option A 317:1 262:1 179:1
18 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS' REMUNERATION REPORT
continued
Details of salary and total pay and benefits as required under the regulations are set out below:
CEO base salary (£’000): £500,000
CEO total pay and benefits (£’000): £925,039
Employee figures (£’000) Salary
Total pay and
benefits
25th percentile employee 23.9 25.0
50th percentile employee 27.4 28.6
75th percentile employee 36.1 37.4
The Company has used Option A to calculate the CEO pay ratio. The Company feels that using comparable single figure data ensures the most like-for-like
comparison of CEO pay against the pay levels of employees at the 25th, 50th and 75th percentiles. We have determined the individuals at the 25th, 50th and 75th
percentiles as at 28 April 2024, the last day of the financial year.
The CEO pay ratio gap has decreased during the year due to no bonus payout for FY24 compared to FY23 where the bonus pay out was 75% of maximum.
The value of the LTIP vesting in respect of FY24 is also lower due to the share price depreciation over the performance period.
In addition, we expect the ratios could be fairly volatile for the following reasons:
– The CEO’s pay is made up of a greater proportion of incentive pay than for employees generally, and this leads to a higher degree of variability in his overall
pay each year
– LTIPs are provided in shares, and therefore a change in share price over the three years magnifies the impact of a long-term incentive award vesting in any
given year
We recognise that the ratio is driven by the different structure of the pay of our CEO versus that of our colleagues generally, as well as the make-up of our
workforce. What is important from our perspective is that this ratio is influenced only by the differences in structure, and not by divergence in fixed pay between
the CEO and wider workforce. The Remuneration Committee reviews information about colleague pay, reward and progression policies of the Company and is
comfortable that the median pay ratio is consistent with these policies.
NOTES ON METHODOLOGY
In determining the quartile figures, the hourly rates were annualised using the same number of contractual hours as the CEO. Actual pay and benefits were
calculated for all UK colleagues at the snapshot date and subsequently ranked in order to identify the relevant person at each quartile. For the purpose of the
calculations the following elements of pay were included (if applicable) for all colleagues:
– Annual basic salary
– Private medical insurance value
– Car or car allowance
– Employer pension contribution (noting that the CEO and CFO waive their employer pension contribution)
– Bonus and commission earned in the year in question
– LTIP value
– Management incentive plan value
18 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
PERCENTAGE CHANGE IN DIRECTORS’ REMUNERATION
The table below shows how the percentage change in each Director’s salary/fees, taxable benefits and annual bonus from FY20 to FY24 compares with the average
percentage change in each of those components of pay for the UK-based employees of the Group as a whole.
This table will build up over time to a five-year comparison as required by the reporting regulations. The regulations prescribe that all employees of the listed company,
excluding Directors, should be included in the average employee calculation. However, as the Watches of Switzerland Group PLC does not have any colleagues other
than the two Executive Directors, no statutory disclosure can be provided in respect of colleagues. Therefore, the Company has chosen to voluntarily disclose the
information in the table below using UK full time colleagues as the comparator group; this group was chosen on the basis that the majority of our workforce is UK-based.
Year-on-year changes in pay for Directors compared to the average UK colleague increase:
Name
FY20 to FY21 FY21 to FY22 FY22 to FY23 FY23 to FY24
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Executive Directors
Brian Duffy 0% 2.7% n/a 4.3% (0.6)% 4.3% 0% 6.9% (25.0)% 0% 1.2% (100.0)%
Bill Floydd
1
n/a n/a n/a n/ n/ n/ 200.0% 403.0% 50.0% (96.4)% (98.8)% (100.0)%
Anders Romberg
2
0% (43.0)% n/a (30.4)% (27.7)% (30.4)% n/ n/ n/ 100.0% 100.0% n/
Non-Executive Directors
Ian Carter n/ n/ n/ 0% 0% n/ 0% 28.7% n/ 0% 128.2% n/
Tea Colaianni 0% n/ n/ 10.0%
3
0% n/ 1.0%
5
100.0% n/ 0% (83.0)% n/
Robert Moorhead 0% n/ n/ 10.8%
3
0% n/ 1.2%
5
0% n/ 0% 0% n/
Baroness (Rosa) Monckton MBE 0% n/ n/ 18.3%
3
0% n/ 2.4%
5
0% n/ 0% 0% n/
Chabi Nouri
4
n/ n/ n/ n/ n/ n/ 100.0% 100.0% n/ 1.4% (18.0)% n/
Average percentage increase for UK employees 5.0% 4.0% n/ 9% (15.5)% 35% 9.1% (14.4)% (48.3)% 12.5% 15.9% (100.0)%
Notes:
1 Bill Floydd was appointed as CFO with effect from 1 January 2022 and stepped down on 12 May 2023.
2 Anders Romberg retired as CFO and as an Executive Director of the Board with effect from 1 January 2022. On 12 May 2023 he rejoined the company and replaced Bill Floydd as CFO.
3 Increase in Non-Executive Director fees in FY22 was due to an additional fee being paid for membership of the ESG Committee and for chairing the ESG Committee.
4 Chabi Nouri was appointed as an independent Non-Executive Director with effect from 1 May 2022. The increases shown are as a result of the annualisation of her remuneration.
5 Changes in pay for the Non-Executive Directors related to the introduction of the ESG Committee part way through FY22. There have been no increases in Non-Executive Director fees over the year.
TOTAL SHAREHOLDER RETURN
The graph shows the Group’s TSR performance (share price plus dividends paid)
compared with the performance of the FTSE 250 (excluding Investment Trusts)
Index and the FTSE 350 General Retailers, since the Company’s IPO in June
2019. These indices have been selected because the Company believes that the
constituent companies are the most appropriate for this comparison for the
Group. This chart will be built out in future reports until it provides a picture of
performance over ten years.
0
50
100
150
350
300
250
200
400
Watches of Switzerland Group PLC FTSE 250 (ex. Investment Trusts)
FTSE 350 General Retailers
20202019 2021 20232022
Rebased TSR from 30/05/2019
2024
CEO REMUNERATION SINCE IPO
The Remuneration Committee does not believe that the remuneration paid
whilst the Company was private is relevant to the remuneration following IPO.
As such, this table shows remuneration from FY20, the first financial year when
the Company was listed. We will add to this table each year until a full ten-year
history is shown
Financial year
Single figure of
remuneration
% of max annual
bonus earned
% of max LTIP
awards vesting
FY24 – Brian Duffy £925,039 0% 100%
FY23 – Brian Duffy £3,329,581 75% 100%
FY22 – Brian Duffy £4, 547,352 100% 100%
FY21 – Brian Duffy £1,221,337 100% n/
FY20 – Brian Duffy
excluding one-off IPO award
£6, 52,387
(£52, 388)
0% n/a
19 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS' REMUNERATION REPORT
continued
RELATIVE IMPORTANCE OF SPEND ON PAY
The table below shows the percentage change in total colleague pay expenditure and shareholder distribution (i.e. dividends and share buybacks) from the financial
year ended 30 April 2023 to the financial year ended 28 April 2024.
Relative importance of the spend on pay
FY24
£m
FY23
£m % change
Colleague remuneration 149.4 143.9 3.8%
Distribution to shareholders £0 £0 0.0%
The Company has not paid a dividend or carried out a share buyback in the current year nor the previous year.
APPROVAL OF THE DIRECTORS’ REMUNERATION REPORT
The FY24 Directors’ Remuneration Report will be subject to a shareholder vote at the 2024 AGM. The table below sets out the actual voting in respect of
resolutions regarding remuneration at previous Annual General Meetings.
Votes for % for Votes against % against Total votes Votes withheld
Approve the 2023 Directors’ Remuneration Report
(2023 AGM)
199,909,929 97. 36% 5,422,508 2.64% 205, 334 ,112 1,675
Approve the 2022 Directors’ Remuneration Policy
(2023 AGM)
189,914,532 98.15% 3,583,126 1.85% 193,685,453 187,795
ROLE OF THE REMUNERATION COMMITTEE
The Committee complies with the UK Corporate Governance Code 2018 in terms of composition and Terms of Reference. The Committee’s Terms of Reference, which
are reviewed annually, are available on the Group’s website at thewosgroupplc.com.
The Committee’s responsibilities are to:
– Determine Remuneration Policy for the Company Chair, Executive Directors, the Company Secretary and other members of the Senior Management as designated
– Determine remuneration packages for the Company Chair, Executive Directors, the Company Secretary and other members of the Senior Management as
designated. No Director plays a part in any decision about their own remuneration
– Review the appropriateness of the Remuneration Policy on an ongoing basis and make recommendations to the Board on appropriate changes
– Obtain up to date comparative market information and appoint remuneration consultants as required to advise or obtain information
– Approve the design of, and set targets for, performance related incentives across the Group
– Oversee any major changes to benefits for employees
– Oversee wider workforce pay practices and incentive arrangements
– Ensure that failure and excessive risk taking are not rewarded
None of the Committee members have any personal financial interest (other than as a shareholder) in the decisions made by the Committee, any conflict of interest
arising from cross-directorships, or day-to-day involvement in running the business.
WHO SUPPORTS THE COMMITTEE?
Internal
Internal support is provided by the Company Secretary & General Counsel and the Executive Director HR, whose attendance at Committee meetings is by
invitation from the Remuneration Committee Chair, to advise on specific questions raised by the Remuneration Committee and on matters relating to the
performance and remuneration of the Senior Management team. No Director was present for any discussions that related directly to their own remuneration.
External
The Committee appointed Deloitte LLP as independent adviser to the Committee following an independent selection process. Fees paid to Deloitte LLP in relation
to remuneration services provided to the Committee for FY24 were £50,500, which were charged on a time and materials basis. Deloitte LLP is a member of the
Remuneration Consultants’ Group, and as such chooses to operate pursuant to a code of conduct that requires remuneration advice to be given objectively and
independently. There are no connections between Deloitte LLP and individual Directors to be disclosed. The Committee is satisfied that the advice provided by
Deloitte LLP in relation to remuneration matters is objective and independent.
TEA COLAIANNI
CHAIR OF THE REMUNERATION COMMITTEE
26 June 2024
191
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
STATUTORY INFORMATION
Topic Section of the report Page
Important events impacting the business Strategic Report 11 to 13
Financial instruments Note 22 of the Consolidated Financial Statements 243
Colleague disabilities Environment, Social and Governance 193
Modern Slavery Statement Environment, Social and Governance 125
Greenhouse gas emissions, energy consumption and
energy-efficient action
Environment, Social and Governance 121
Carbon reporting Environment, Social and Governance 121
Risk Management Risk Management 130 to 132
S172(1) Companies Act 2006 Strategic Report 63
INFORMATION REQUIRED BY LR 9.8.6(10)
Topic Section of the report Page
Diversity & Ethnicity Corporate Governance Report
Nomination Committee Report
158 and
164
INFORMATION REQUIRED BY LR 9.8.4(R)
Topic Section of the report Page
Directors’ interests in shares Remuneration Committee Report 188
Going concern Going Concern and Viability Statement 140 and
141
Long-term incentive schemes Remuneration Committee Report 185
INFORMATION REQUIRED BY DTR 7.2
Topic Section of the report Page
Corporate Governance Statement 2024 Corporate Governance Report 150
INFORMATION REQUIRED BY DTR 4.1.11R
Topic Section of the report Page
Likely future developments Strategic Report 13
INFORMATION REQUIRED BY SCH 7.11(1)(B) COMPANIES (MISCELLANEOUS REPORTING) REGULATIONS 2018
Statement of Engagement with Colleagues
The Group has chosen to provide information in relation to the Statement of Engagement with Colleagues elsewhere in
this report. This is cross referenced in the table below:
Information Section of the report Page
How the Directors engage with colleagues Section 172(1) Statement Board activity 64
How the Group provides colleagues with information on
matters of concern to them as colleagues
Environment, Social and Governance 82
How the Group consults with and considers colleague
feedback
Environment, Social and Governance 83
How the Directors have had regard to colleagues’ interests Environment, Social and Governance; Board activity 64 and 154
Non-Financial Information and Sustainability Information
Statement
Non-Financial Information and Sustainability Information
Statement
62
Business relationships
Information Section of the report Page
Foster the Company’s business relationships Section 172(1) Statement 63
Principal decisions affecting suppliers, clients and others
taken by the Company during the financial year
Section 172(1) Statement Board activity
154 and
155
DTR 4.1.8
The Strategic Report and the Directors’ Report (or parts thereof), together with sections of this Annual Report and
Accounts incorporated by reference, are the Management Report for the purposes of DTR 4.1.8.
Registered number: 11838 443
Registered office address:
Aurum House, 2 Elland Road,
Braunstone, Leicester, LE3 1TT
Country of incorporation:
England and Wales
Type: Public Limited Company
Principal activities: The principal
activity of the Group is the retailing
of luxury watches and jewellery.
The Directors present their report,
together with the audited
Consolidated Financial Statements
of the Group and of the Company,
for the financial year ended 28 April
2024. The Company has chosen in
accordance with s414C (11) of the
Companies Act 2006 to provide
disclosures and information in
relation to a number of matters
which are covered elsewhere in this
Annual Report and Accounts. These
matters, together with those
required under the 2013 Large and
Medium sized Companies and
Groups (Accounts and Reports)
Regulations 2008, are cross
referenced in the table opposite and
together form the Directors’ Report
WATCHES OF SWITZERLAND
GROUP PLC
192
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS’ REPORT
POWERS OF THE DIRECTORS
Subject to the Articles, the Companies Act 2006 and any directions given by the
Company by special resolution and any relevant statutes and regulations, the
business of the Company will be managed by the Board which may exercise all
the powers of the Company. Specific powers relating to the allotment and
issuance of ordinary shares and the ability of the Company to purchase its own
securities are also included within the Articles, and such authorities may be
submitted for approval by the shareholders at the AGM each year.
DIRECTORS’ INTERESTS AND CONFLICTS OF INTEREST
The Directors’ interests in, and options over, ordinary shares in the Company
are shown in the Directors’ Remuneration Report on Remuneration on page
188. In line with the requirements of the Companies Act 2006, Directors have
a statutory duty to avoid situations in which they have, or may have, interests
that conflict with those of the Company unless that conflict is first authorised by
the Board. The Company has procedures in place for managing conflicts of
interest. The Company’s Articles contain provisions to allow the Directors to
authorise potential conflicts of interest, so that if approved, a Director will not
be in breach of his/her duty under company law. In line with the requirements of
the Companies Act 2006, each Director has notified the Company of any
situation in which he or she has, or could have, a direct or indirect interest that
conflicts, or possibly may conflict, with the interests of the Company (a situational
conflict). Directors have a continuing duty to update any changes to their
conflicts of interest and a note is then made of that update.
During the year the conflict of interests’ procedures operated effectively.
DIRECTORS’ INDEMNITIES
Directors’ and Officers’ insurance has been established for all Directors and
Officers to provide cover against their reasonable actions on behalf of the
Company. The Company also indemnifies the Directors under a qualifying
indemnity for the purposes of s236 of the Companies Act 2006. This indemnity
contains provisions that are permitted by the director liability provisions of the
Companies Act 2006 and the Company’s Articles.
EQUAL OPPORTUNITIES AND EMPLOYMENT OF PERSONS WITH
DISABILITIES
The Group has policies on equal opportunities and the employment of persons
with disabilities which, through the application of fair employment practices, are
intended to ensure that individuals are treated equitably and consistently
regardless of age, race, creed, colour, gender, marital or parental status, sexual
orientation, religious beliefs and nationality. Applications for employment by
persons with disabilities are always fully considered, bearing in mind the
respective aptitudes and abilities of the applicant concerned. In the event of
colleagues becoming disabled, every effort is made to ensure their employment
with the Group is continued and that the appropriate training is arranged. It is
the policy of the Group that the training, career development and promotion of
a persons with disabilities should, as far as possible, be identical to that of a
person who does not have a disability.
ARTICLES OF ASSOCIATION
In accordance with the Companies Act 2006, the Articles of Association (the
Articles) may only be amended by a special resolution of the Company’s
shareholders at a general meeting.
AGM
The 2024 AGM of the Company will be held at 2.30pm on 3 September 2024,
at our offices at 36 North Row, London W1K 6DH. The Notice of AGM is given,
together with explanatory notes, in the booklet which accompanies this Annual
Report and Accounts.
BOARD OF DIRECTORS
Ian Carter
Brian Duffy
Anders Romberg – Appointed 12 May 2023
Tea Colaianni
Robert Moorhead
Baroness (Rosa) Monckton MBE
Chabi Nouri
Bill Floydd – Resigned 12 May 2023
Full biographies of the current Directors can be found on pages 148 and 149.
Details of the current Directors’ beneficial and non-beneficial interests in the
shares of the Company are shown on page 188. Details of share awards are
found in the Remuneration Report on page 188.
APPOINTMENT AND REMOVAL OF A DIRECTOR
The appointment, reappointment and replacement of Directors is governed by
the Articles, the UK Corporate Governance Code 2018 (the Code), the
Companies Act 2006 and related legislation. The Code recommends that all
Directors of publicly listed companies stand for election every year. At the 2023
AGM, all members of the Board stood for election or re-election and were duly
elected. All Directors are offering themselves for re-election. The Board is
satisfied that each Non-Executive Director, offering themselves for re-election,
is independent in both character and judgement, and that their experience,
knowledge and other business interests enable them to contribute significantly
to the work and balance of the Board.
A Director may be appointed to the Board by:
(i) Ordinary resolution of the shareholders
(ii) Board approval following recommendation by the Nomination Committee
(iii) Ordinary resolution if the Director chooses to seek re-election at a general
meeting
In addition, the Directors may appoint a Director to fill a vacancy or as an
additional Director, provided that the individual retires at the next AGM; if they
are to continue, they must offer themselves for election. A Director must vacate
office in certain circumstances as set out in the Company’s Articles and may be
removed by ordinary resolution provided special notice of that resolution has
been given.
193
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
DIRECTORS’ STATEMENT OF RESPONSIBILITY IN RESPECT OF THE
ANNUAL REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and Accounts
inaccordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year that give a true and fair view of the state of affairs of the Group and
the Company as at the end of the financial year, and of the profit or loss of the
Group for the financial year. Under that law the Directors have prepared the
Group Financial Statements in accordance with UK adopted international
accounting standards and have elected to prepare the Company’s Financial
Statements in accordance with United Kingdom Generally Accepted Accounting
Practice, including FRS 102 (The Financial Reporting Standard applicable in the
United Kingdom and the Republic of Ireland) and the Companies Act 2006.
Under company law, the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of affairs
of the Group and the Company and of the profit or loss of the Group for
thatperiod.
In preparing the Annual Report and Accounts, the Directors are required to:
– Select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors (or in respect of the
Parent Company Financial Statements, Section 10 of FRS 102) and then apply
them consistently
– Make judgements and accounting estimates that are reasonable and prudent
– Present information, including accounting policies, in a manner that provides
relevant, reliable, comparable and understandable information
– Provide additional disclosures when compliance with the specific
requirements in IFRSs (or in respect of the Parent Company Financial
Statements, FRS 102) is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the Group’s
financial position and financial performance
– For the Group Financial Statements, state whether International Financial
Reporting Standards in conformity with the requirements of the Companies
Act 2006 and UK adopted international accounting standards have been
followed, subject to any material departures disclosed and explained in the
Financial Statements
– For the Parent Company Financial Statements, state whether applicable UK
accounting standards, FRS 102, have been followed, subject to any material
departures disclosed and explained in the Parent Company Financial Statements
– Prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Group and the Company will continue
inbusiness
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group’s and the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the Financial Statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report
and Corporate Governance Statement that comply with that law and those
regulations. The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s website.
Each of the Directors, whose names and functions are listed on pages 148 and
149 confirms that, to the best of their knowledge:
– That the Group Financial Statements, which have been prepared in
accordance with UK adopted international accounting standards, give a true
and fair view of the assets, liabilities, financial position and profit of the Group
– That the Annual Report and Accounts 2024, including the Strategic Report,
includes a fair review of the development and performance of the business
and the position of the Company and undertakings included in the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face
– That they consider the Annual Report and Accounts 2024, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Company’s position, performance, business
model and strategy
COMPANY SECRETARY
Laura Battley is the Company Secretary of the Watches of Switzerland Group
PLC and its trading UK Group subsidiaries who can be contacted via the
Company’s Registered Office.
194
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
DIRECTORS REPORT
continued
AUDITOR REAPPOINTMENT
Having been appointed as the External Auditor in 2019, Ernst & Young LLP has
expressed its willingness to continue in its capacity as independent External
Auditor of the Company. The Directors are recommending a resolution in
favour of this reappointment and a resolution for authorisation of Auditor
remuneration at the forthcoming AGM.
DISCLOSURE OF INFORMATION TO THE AUDITOR
In accordance with Section 418(2) of the Companies Act 2006, each Director in
office at the date the Directors’ Report is approved confirms that:
i. So far as the Director is aware, there is no relevant audit information of
which the Company’s Auditor is unaware
ii. He/she has taken all the steps that he/she ought to have taken as a Director
in order to make himself or herself aware of any relevant audit information
and to establish that the Company’s Auditor is aware of that information
DIVIDENDS
The Directors do not recommend the payment of a dividend.
POLITICAL DONATIONS
The Group made no political donations and incurred no political expenditure
during the year.
SHARE CAPITAL AND SHAREHOLDER VOTING RIGHTS
The share capital of the Company at 28 April 2024 was as follows:
2024 number
of shares
2024
nominal value
£
Allotted, called up and fully paid ordinary
shares of £0.0125 each
239,570,297 £2,994,629
All shareholders are entitled to attend and speak at the general meetings of the
Company, appoint proxies, receive any dividends, exercise voting rights and
transfer shares without restriction. On a show of hands at a general meeting,
every member present in-person shall have one vote, and on a poll, every
member present in-person or by proxy shall have one vote for every ordinary
share held. There are no known arrangements that may restrict the transfer of
shares or voting rights.
Under the Company’s Share Incentive Plan, Trustees hold shares on behalf of
colleague participants. The Trustees will only vote on those shares, and receive
dividends, should the Company pay dividends in the future, that a participant
beneficially owns, in accordance with the participant’s wishes.
An Employee Benefit Trust also operates which has discretion to vote on any
shares it holds as it sees fit, except any shares participants own beneficially, in
which case the Trustee will only vote on such shares as per a participant’s
instructions. The Trustee of the Employee Benefit Trust has waived its right to
dividends on all shares within the Trust.
The Company is not aware of any other dividend waivers or voting restrictions
in place.
RESTRICTIONS ON THE TRANSFER OF SECURITIES
The Articles do not contain any restrictions on the transfer of ordinary shares in
the Company other than the usual restrictions applicable where any amount is
unpaid on a share. However, restrictions are imposed by laws and regulations
such as the prohibition on insider trading and the requirements of the Listing
Rules whereby PDMR’s dealings need to be approved. The Company has
adopted a Share Dealing Code to regulate PDMR dealings and has extended the
scope of that Code to include certain other colleagues.
AUTHORITY TO ALLOT SHARES
Under the Companies Act 2006, the Directors may only allot shares if authorised
to do so by the shareholders in a general meeting.
SHAREHOLDER AUTHORITY TO PURCHASE OWN SHARES
At the Company’s 2023 AGM, the Company’s shareholders passed a shareholder
resolution granting the Company authority to purchase its own shares pursuant
to sections 693 and 701 of the Companies Act 2006.
The authority is limited to an aggregate maximum number of 23,957,029
ordinary shares, representing 10% of the Company’s issued share capital,
excluding treasury shares. The maximum price which may be paid for an
ordinary share will be an amount which is not more than the higher of (i) 5%
above the average of the middle market quotation for an ordinary share as
derived from the London Stock Exchange Plc’s Daily Official List for the five
business days immediately preceding the day on which the ordinary share is
contracted to be purchased; and (ii) the higher of the price of the last independent
trade and the highest current independent bid on the trading venue where the
purchase is carried out (in each case, exclusive of expenses).
The authority shall, unless varied, revoked or renewed, expire at the end of the
Company’s 2024 AGM or, if earlier, at close of business on 3 December 2025. To
date, the Directors have not exercised any of the powers conferred by this resolution.
USE OF FINANCIAL INSTRUMENTS
Information regarding the Company’s use of financial instruments, financial risk
management objectives and policies can be found in the Risk Management
section of the Strategic Report on page 130 to 132 and note 22 of the
Consolidated Financial Statements.
195
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
DIRECTORS REPORT
continued
CHANGE OF CONTROL
There are no agreements between the Company and its Directors or colleagues
providing for compensation for loss of office or employment (whether through
resignation, purported redundancy or otherwise) by reason of a takeover bid.
Details concerning the impact on annual bonus (cash and deferred share awards)
and LTIPs held by Directors and senior management in the event of a change of
control are set out in the Remuneration Policy which was approved by
shareholders at the AGM in 2022. Generally, the cash element of annual bonus
and any LTIPs would be pro-rated for time and performance in the event of a
change of control. The deferred share element of annual bonus will vest on a
change of control. The Remuneration Committee does have the discretion not
to pro-rate for time, however, its normal policy is to pro-rate. The Remuneration
Committee discretion not to pro-rate would only be used if there were a
business case which would be fully explained to shareholders.
Various agreements that the Group has entered into with third-parties, including
key distribution agreements with luxury watch and jewellery brands, lease
agreements, as well as contracts with third party service providers, provide such
parties with a right to terminate the agreement in the event of a change
ofcontrol.
The £225.0 million multicurrency revolving loan facility entered into on 9 May
2023, includes certain customary mandatory prepayment and cancellation
events, including mandatory prepayments on a change of control of either
Watches of Switzerland Group PLC or Jewel UK Midco Limited if a lender so
requests after a period of negotiations.
The US$115.0 million term loan facility entered into on 23 February 2024,
includes certain customary mandatory prepayment and cancellation events,
including mandatory prepayments on a change of control of either Watches of
Switzerland Group PLC or Jewel UK Midco Limited if a lender so requests after
a period of negotiations.
POST BALANCE SHEET EVENT
Acquisition of Roberto Coin Inc.
On 8 May 2024, the Group signed and completed the acquisition of the entire
share capital of Roberto Coin Inc., an associate company of Roberto Coin S.p.A.
from Roberto Coin S.p.A., Peter Webster, Co-Founder and President of
Roberto Coin Inc., and Pilar Coin. The acquisition completed for a total cash
consideration of $130 million (of which $10 million is deferred for one year and
contingent on the future profitability of the acquired business), subject to
working capital adjustments. Further information can be found in note 26 to the
Consolidated Financial Statements.
Closure of European Division
In line with our disciplined approach to capital allocation and given the pipeline
of high returning opportunities in the UK and US, the Group intends to reallocate
investment from the European market into these higher returning regions. We
are in negotiations with our brand partners for the transfer of a number of our
existing European mono-brand boutiques. The announcement and decision to
exit the showrooms took place post year end. Further information can be found
in note 26 to the Consolidated Financial Statements.
196
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
SIGNIFICANT SHAREHOLDERS AND INTEREST IN VOTING RIGHTS
The table at the bottom of the page shows the notifiable interests in the Company’s ordinary issued share capital, as at the date of this report, as notified in
accordance with the provisions of DTR 5.1.2R representing 3% or more of the Company’s issued ordinary share capital.
It should be noted that these holdings may have changed since the Company was notified. However, notification of any change is not required until the next notifiable
threshold is crossed.
Notifiable interest Voting Rights % of capital disclosed
Nature of holding as per
disclosure
The Capital Group Companies 12,052,654 5.03 – Indirect interest 5.03%
Pelham Capital Ltd 11,948 ,369 4.99 – Direct interest 4.99%
Ameriprise Financial Inc and its group (Threadneedle Asset Management Limited) 9,356,032 3.90 – Indirect interest 0.01%
– Direct interest 3.89%
Brian Duffy 7,696,999 3.21 – Direct interest 3.21%
Aegon Asset Management UK PLC 7,374,274 3.08 – Direct interest 3.02%
– Indirect interest 0.06%
TRANSACTIONS WITH RELATED PARTIES
Refer to note 23 on page 245 of the Consolidated Financial Statements for details of related party transactions in the year.
APPROVAL OF THE ANNUAL REPORT AND ACCOUNTS
The Strategic Report on pages 2 to 141 and the Directors’ Report on pages 192 to 197 and the Corporate Governance Report were approved by the Board on
26 June 2024. Approved by the Board and signed on its behalf.
LAURA BATTLEY
COMPANY SECRETARY
26 June 2024
197
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
198
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
CONTENTS
200 Independent Auditor’s Report
206 Consolidated Income Statement
207 Consolidated Statement of Comprehensive Income
208 Consolidated Balance Sheet
209 Consolidated Statement of Changes in Equity
20 Consolidated Statement of Cash Flows
2 Notes to the Consolidated Financial Statements
248 Company Balance Sheet
249 Company Statement of Changes in Equity
250 Notes to the Company Financial Statements
254 Glossary
258 Shareholder Information
3
F I NA NCI A L
STATEMENTS
19 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
OPINION
In our opinion:
– Watches of Switzerland Group PLC’s Group Financial Statements and Parent
Company Financial Statements (the ’Financial Statements‘) give a true and fair
view of the state of the Group’s and of the Parent Company’s affairs as at 28
April 2024 and of the Group’s profit for the 52-weeks then ended;
– the Group Financial Statements have been properly prepared in accordance
with UK adopted international accounting standards;
– the Parent Company Financial Statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting Practice;
and
– the Financial Statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the Financial Statements of Watches of Switzerland Group
PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the 52-week
period ended 28 April 2024 which comprise:
Group Parent Company
Consolidated Income Statement for the
52-weeks ended 28 April 2024
Company Balance sheet as at 28 April
2024
Consolidated Statement of
Comprehensive Income for the
52-weeks ended 28 April 2024
Company Statement of Changes in
Equity as at 28 April 2024
Consolidated Balance Sheet as at 28April
2024
Related notes C1 to C10 to the Financial
Statements including a summary of
significant accounting policies
Consolidated Statement of Changes in
Equity as at 28 April 2024
Consolidated Statement of Cash Flows
for the 52-weeks ended 28 April 2024
Related notes 1 to 26 to the Financial
Statements, including material accounting
policy information
The financial reporting framework that has been applied in the preparation of
the Group Financial Statements is applicable law and UK adopted international
accounting standards. The financial reporting framework that has been applied
in the preparation of the Parent Company Financial Statements is applicable law
and United Kingdom Accounting Standards, including FRS 102 ‘The Financial
Reporting Standard applicable in the UK and Republic of Ireland’ (United
Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the Group and Parent in accordance with the ethical
requirements that are relevant to our audit of the Financial Statements in the
UK, including the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Group or the Parent Company and we remain independent of
the Group and the Parent Company in conducting the audit.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the Financial Statements, we have concluded that the directors’ use of
the going concern basis of accounting in the preparation of the Financial
Statements is appropriate. Our evaluation of the directors’ assessment of the
Group and Parent Company’s ability to continue to adopt the going concern basis
of accounting included:
– Obtaining management’s going concern assessment, which covers the period
to 31 October 2025, and which includes details of facilities available, forecast
covenant calculations, and the results of management’s downside sensitivity
scenarios;
– Testing management’s model for clerical accuracy;
– Understanding and assessing the design effectiveness of controls over the
directors’ going concern assessment and management’s forecasting process;
– Obtaining the agreements in respect of the Group’s financing arrangements
and confirming the maturity dates and covenants that are required to be met;
– Challenging the reasonableness of forecasts and key assumptions
underpinning the going concern model, which are based on the Board
approved budget and Long Range Plan. Our procedures included assessing
changes from the prior period, ensuring the forecast appropriately reflects
the Group’s climate change commitments, comparing to external forecasts
for the sector and considering whether there was any indication of
management bias, including consideration of any contrary indicators;
– Considering managements historical forecast accuracy by comparing actual
performance to that budgeted;
– Comparing actual performance and liquidity post year-end to that budgeted;
– Reperforming forecast covenant calculations and comparing to the
requirements under the facility agreements;
– Assessing the Group’s severe but plausible downside scenarios which factor
in the potential effect of a reduction in sales due to reduced consumer
confidence and lower disposable income as a result of cost-of-living challenges.
This assessment included challenging the assumptions and whether the
quantum of the impact of the downside scenarios is sufficiently severe;
– Challenging whether the scenarios modelled appropriately consider the
Group’s principal risks and uncertainties;
– Assessing the mitigating factors available to management should downside
scenarios be worse than anticipated, including challenging whether these are
realistic and controllable;
– Assessing the reverse stress tests used by the directors to determine the risk
to liquidity and covenant compliance. Including performing appropriate
sensitivity and assessing the likelihood of this occurring;
– Performing a suite of procedures, including management enquiry to identify
events or conditions beyond the period of assessment that may cast
significant doubt on the entity’s ability to continue as a going concern; and
– Assessing the going concern disclosures in the Financial Statements to assess
whether they are in accordance with reporting standards.
Our key observations are that the director’s assessment forecasts that the Group
will maintain sufficient liquidity and comply with all covenants throughout the going
concern assessment period in both the base case and plausible downside scenarios.
This assessment included consideration of events in close proximity to the end of the
going concern period. The scenarios modelled by the Directors confirmed the ability
under the base and severe but plausible downsides for the Group to repay the US
term loan at the end of the going concern period. The Directors consider the
reverse stress test to be remote taking into account liquidity and covenant headroom,
as well as mitigating actions within the Group’s control and the fact this would
represent a significant reduction in sales and margin from prior financial years.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the Group and Parent Company’s ability to continue as
a going concern for a period to 31 October 2025.
In relation to the Group and Parent Company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the Financial
Statements about whether the directors considered it appropriate to adopt the
going concern basis of accounting.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
WATCHES OF SWITZERLAND GROUP PLC
2 0 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Our responsibilities and the responsibilities of the directors with respect to going
concern are described in the relevant sections of this report. However, because
not all future events or conditions can be predicted, this statement is not a
guarantee as to the Group’s ability to continue as a going concern.
OVERVIEW OF OUR AUDIT APPROACH
Understanding the
Watches of
Switzerland business
– We have a team with strong experience of the luxury
retail industry and have gained an understanding of any
changes to the Group’s strategy, business model and
operating environment. This was achieved through
enquiry, analytical procedures and observation in the
current and prior periods, together with visiting a
number of the Group’s operations and showrooms.
– We performed risk assessment procedures which
included meeting with management and the Board,
plus considering our observations from half year and
interim work to identify risks of material misstatement.
Audit scope – We performed an audit of the complete financial
information of 5 (2023: 5) components.
– The components where we performed full audit
procedures accounted for 101.4% of Profit before tax
and exceptional items (2023: 100.8%), 99.1% of Revenue
(2023: 99.5%) and 97.1% of Total assets (2023: 96.0%).
Key audit matters – Showroom impairment
– Inventory valuation
– Revenue recognition including the risk of management
override
Materiality – Overall Group materiality of £6.2m (2023: £7.8m)
which represents 5% of profit before tax and
exceptional items.
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of
performance materiality determine our audit scope for each company within the
Group. Taken together, this enables us to form an opinion on the Consolidated
Financial Statements. We take into account size, risk profile, the organisation of
the Group and effectiveness of Group-wide controls, changes in the business
environment, the potential impact of climate change and other factors such as
recent internal audit results when assessing the level of work to be performed at
each company.
In assessing the risk of material misstatement to the Group Financial Statements,
and to ensure we had adequate quantitative coverage of significant accounts in
the Financial Statements, of the 18 (2023: 18) reporting components of the
Group, we selected 5 (2023: 5) components covering entities within the UK and
US, which represent the principal business units within the Group.
We performed an audit of the complete financial information of 5 (2023: 5) of
the principal business units (‘full scope components‘) which were selected based
on their size or risk characteristics.
The reporting components where we performed audit procedures accounted
for 101.4% (2023: 100.8%) of the Group’s Profit before tax and exceptional
items, 99.1% (2023: 99.5%) of the Group’s Revenue and 97.1% (2023: 96.0%) of
the Group’s Total assets.
Of the remaining 13 components that together represent -1.4% of the Group’s
Profit before tax and exceptional items, none are individually greater than 5% of
the Group’s Profit before tax and exceptional items. For these components, we
performed other procedures, including analytical review and enquiry to respond
to any potential risks of material misstatement to the Group Financial Statements.
The charts below illustrate the coverage obtained from the work performed by
our audit teams.
101.4%
Full scope
components
-1.4%
Other
procedures
99.1%
Full scope
components
0.9%
Other
procedures
97.1%
Full scope
components
2.9%
Other
procedures
Profit before tax and exceptional items Revenue
Total assets
Involvement with component teams
All our audit procedures were performed by the UK primary audit team,
including the US component where financial reporting control and oversight is
managed directly by management in the UK.
As part of the UK primary audit team we involved US colleagues to perform the
US distribution centre and showroom physical inventory count tests as well as
assist auditing US specific laws and regulations, state taxes and corporate tax.
During the current year’s audit cycle, a visit was undertaken by the senior
statutory auditor to the US component head office. This visit involved meeting
with the US finance and operations employees to understand the latest results,
risks and outlook of the US business as well as visiting local showrooms.
Climate change
Stakeholders are increasingly interested in how climate change will impact Watches
of Switzerland Group PLC. The Group has determined that the most significant
future impacts from climate change on its operations will be from extreme
weather events disrupting offices and distribution centres as well as the supply
chain, increased office and showroom energy requirements for heating and
cooling, the costs of complying with environmental legislation and from changing
consumer expectations from shareholders. These are explained on pages 106 to
109 in the required Task Force On Climate Related Financial Disclosures and on
pages 134 to 139 in the principal risks and uncertainties. They have also explained
their climate commitments on page 118. All of these disclosures form part of the
’Other information’, rather than the audited financial statements. Our procedures
on these unaudited disclosures therefore consisted solely of considering whether
they are materially inconsistent with the Financial Statements or our knowledge
obtained in the course of the audit or otherwise appear to be materially misstated,
in line with our responsibilities on ’Other information‘.
2 0 1
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
In planning and performing our audit we assessed the potential impacts of
climate change on the Group’s business and any consequential material impact
on its Financial Statements.
The Group has explained in note 1 how they have reflected the impact of
climate change in their financial statements including how this aligns with their
commitment to the aspirations of the Paris Agreement to achieve net-zero GHG
emissions by 2050. These considerations did not have a material impact on the
financial statements.
Our audit effort in considering the impact of climate change on the Financial
Statements was focused on evaluating management’s assessment of the impact
of climate risk, physical and transition, their climate commitments, the effects of
material climate risks disclosed on pages 114 to 117 and the significant judgements
and estimates disclosed in note 1 and whether these have been appropriately
reflected in asset values where these are impacted by future cash flows and
associated sensitivity disclosures, being the impairment testing (see notes 10, 11
and 12, following the requirements of UK adopted international accounting
standards. As part of this evaluation, we performed our own risk assessment,
supported by our climate change internal specialists, to determine the risks of
material misstatement in the Financial Statements from climate change which
needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their
assessment of going concern and viability and associated disclosures. Where
considerations of climate change were relevant to our assessment of going
concern, these are described above.
Based on our work, whilst we have not identified the impact of climate change
on the Financial Statements to be a standalone key audit matter, we have
considered the impact on the showroom impairment key matter. Details of the
impact, our procedures and findings are included in our explanation of key audit
matter below.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the Financial Statements of the current period and
include the most significant assessed risks of material misstatement (whether or
not due to fraud) that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the Financial Statements as a whole, and in our
opinion thereon, and we do not provide a separate opinion on these matters.
Risk Our response to the risk
Key observations communicated
to the Audit & Risk Committee
Showroom impairment – £26.2m
net impairment (FY23 £0.3m net
impairment reversal)
Refer to the Audit & Risk Committee
Report (page 165); Accounting policies
(page 214); and Note 4 & 11 of the
Consolidated Financial Statements (pages
223 and 231)
Cash generating units (‘CGU’) should be
reviewed for indicators of impairment at
each reporting period end.
Forecasts and discount rates used in
assessing showroom impairment are
judgmental and involve estimates of
future trading which involves uncertainty.
In particular, there is a risk of impairment
as a result of the current consumer
landscape which adds greater uncertainty
on future showroom performance
particularly in respect of non-supply
constrained brands.
– We understood and assessed the design effectiveness and implementation of
controls over the impairment indicator review and impairment test.
– We ensured managements calculations were performed in accordance with the
requirements of IAS 36.
– We challenged the UK and US discount rates used with the assistance of EY
valuation specialists which included independently determining a reasonable range
as a corroboration for the appropriateness of the discount rate used by management.
– We challenged the showroom cashflow forecasts used by management in calculating
the value in use. Our procedures included assessing changes from the prior period,
comparing to external forecasts for the industry, considering the potential impacts
from climate change, inspecting post year-end results and considering whether there
was any indication of management bias, including consideration of any contrary
indicators. In respect of Europe we challenged the assumptions made in determining
the Fair Value loss Costs to Sell based on the latest discussions with the Brands.
– We have challenged the judgements on the identification of cash generating units to
assess whether the threshold for grouping showrooms as one CGU had been met.
– We challenged the long-term growth rates applied by comparing to external
forecasts in the UK and US.
– We assessed the process for allocating forecast cashflows to individual showrooms.
– We validated impairment test input data and arithmetical accuracy of the model,
including the allocation of overheads to CGUs.
– We independently stress tested the model’s key assumptions to determine if any
plausible change in assumptions would result in a material change in impairment.
– We assessed the adequacy of the disclosures in the Financial Statements in respect
of the impairment charge. This included assessing the disclosure on the reasonable
possible changes in assumptions.
Based on our procedures over
showroom impairment no
material misstatements were
identified.
We consider the showroom
impairment recognised to be
materially stated and
appropriately disclosed in
exceptional items.
Management has appropriately
included sensitivity analysis
disclosures in note 11 to the
Financial Statements to reflect
the level of estimation
uncertainty.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
WATCHES OF SWITZERLAND GROUP PLC
continued
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Risk Our response to the risk
Key observations communicated
to the Audit & Risk Committee
Inventory valuation – £393.3m of
inventory, (FY23 £356.0m)
Refer to the Audit & Risk Committee
Report (page 165); Accounting policies
(page 215); and Note 14 of the Consolidated
Financial Statements (page 235)
The Group sells luxury goods, which
have a high carrying value and are subject
to changing consumer trends.
Management applies judgement to
anticipate the saleability of on-hand
inventory and to evaluate the liquidation
of slow moving and discontinued inventory
when calculating the inventory provision.
There is greater risk on the inventory
provision for products where margins
tend to be lower, more variable and
impacted by changes in the consumer
landscape such as jewellery and non-
super high demand products.
– We understood and assessed the design of management’s key controls over the
inventory valuation and provision calculation process.
– We enquired of key members of finance and the merchandising team to understand
inventory levels, ageing and plans for discontinuation.
– We assessed management’s judgements and assumptions used in determining the
inventory provision to challenge if they were appropriate and supportable, and
recalculated the provision. We understood the sensitivity of these assumptions to
change.
– We assessed the level of provisioning by specific brand and compared this to
performance in the year and stock turn. We directed greater attention to the
products likely to be impacted by cost-of-living challenges.
– We inspected the value of inventory sold at less than cost during the period and
challenged management on whether a provision was required for any such products
that remain on hand at year-end.
– In assessing the reasonableness of management’s methodology, we have considered
the historical level of provisioning and subsequent utilisation and releases to
determine the accuracy of prior provisions.
Based on our procedures we
consider the valuation of
inventory to be materiality
appropriate.
Revenue recognition including the risk
of management override £1,537.9m
revenue (FY23 £1,542.8m)
Refer to the Audit & Risk Committee Report
(page 165); Accounting policies (page 212);
and notes 2 and 3 of the Consolidated
Financial Statements (page 222)
Our assessment is that the majority of
the Group’s revenue transactions are
non-complex, with no judgement
applied over the amount recorded.
Revenue recognition is a significant risk by
presumption due to the risk of material
misstatements as a result of fraudulent or
erroneous financial reporting.
We consider the revenue recognition
significant risk to be in the following key
areas:
– Manual adjustments to revenue;
– Valuation of sales returns provisions;
and
– Completeness of customer deposits.
– We understood and assessed the design of management’s key controls over the
revenue recognition process.
– We performed analytical review procedures to understand the revenue trends
compared to the prior period, budget and post year-end to identify areas that
warrant further investigation.
– For the UK and US full scope components (99.1% of Group revenue), we utilised
data analytic procedures to test the entire population of postings from Revenue to
Cash, correlating the cash conversion of sales. For a sample of these items, we then
verified the revenue to the receipt and bank statement.
– Using data analytical tools, we identified material manual adjustments to revenue
that do not follow the core processes such as postings for deferred revenue on
deposits for further investigation and corroboration to other audit procedures.
– We challenged the provision for returns by assessing actual returns in the contractual
period post year-end.
– We tested the completeness of deposits through use of data analytics procedures
on showroom margins and by testing a sample of deposit releases to revenue in the
period confirming the goods were collected before the period end date by
inspecting receipts.
We did not identify any
evidence of management
override through the use of
manual journal entries.
Based on our procedures in
respect of deposits and
returns no material
misstatements were identified.
2 0 3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
The following changes have been made to our key audit matters in the current year:
– The revenue recognition key audit matter previously included a risk on the
valuation of gift card provisions. This is no longer considered to be a significant
risk given the magnitude of historic redemption rates on aged unused gift
cards. In addition, given the current macroeconomic landscape the risk on
accounting for deposits has been focused on the completeness of deposits
(occurrence of revenue) as opposed to the existence of deposits.
– The risk on inventory valuation, previously included a risk on the accounting
for supplier price increases. This is no longer considered to be part of the
significant risk given historically no material adjustments have been identified
in respect of this formulaic calculation.
– The showroom impairment risk previously included a risk in respect of
impairment reversals. As a result of the current consumer landscape our
procedures were focused on the completeness and valuation of showroom
impairment in the year.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming our
audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate,
could reasonably be expected to influence the economic decisions of the users of
the financial statements. Materiality provides a basis for determining the nature
and extent of our audit procedures.
We determined materiality for the Group to be £6.2 million (2023: £7.8 million),
which is 5% (2023: 5%) of Profit before tax and exceptional items. We believe that
Profit before tax and exceptional items provides us with an appropriate basis for
setting materiality as it is a measure which is key to the users of the Financial Statements
and is not distorted by exceptional items which may fluctuate from period to period.
We determined materiality for the Parent Company to be £9.4 million (2023:
£9.5 million), which is 2% (2023: 2%) of equity due to the main purpose of the
entity being an investment holding company which does not trade. When
auditing balances included within the Group Financial Statements we reduced
this down to the Group materiality.
Audit work at component locations for the purpose of obtaining audit coverage
over significant financial statement accounts is undertaken based on a percentage
of total performance materiality. The performance materiality set for each
component is based on the relative scale and risk of the component to the
Group as a whole and our assessment of the risk of misstatement at that
component. In the current year, the range of performance materiality allocated
to components was £0.9m to £4.6m (2023: £1.2m to £5.8m).
Reporting threshold
An amount below which identified misstatements are considered as being clearly
trivial.
We agreed with the Audit & Risk Committee that we would report to them all
uncorrected audit differences in excess of £0.31m (2023: £0.39m), which is set
at 5% of planning materiality, as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant qualitative
considerations in forming our opinion.
OTHER INFORMATION
The other information comprises the information included in the annual report
set out on pages 1 to 197, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information
contained within the annual report.
Our opinion on the Financial Statements does not cover the other information
and, except to the extent otherwise explicitly stated in this report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Financial
Statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, the part of the directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the strategic report and the directors’ report for the
financial year for which the Financial Statements are prepared is consistent
with the Financial Statements; and
– the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
– adequate accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
– the Parent Company Financial Statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or
– certain disclosures of directors’ remuneration specified by law are not
made; or
– we have not received all the information and explanations we require for
our audit
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
WATCHES OF SWITZERLAND GROUP PLC
continued
2 0 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
STARTING
BASIS
Profit before tax – £92.1m
ADJUSTMENTS
– Exceptional items – £33.2m
MATERIALITY
– Totals £125.3m
– Materiality of £6.2m (5% of materiality basis)
During the course of our audit, we reassessed initial materiality and trued this up
to final results to reflect the full year actual profit before tax and exceptional items.
Performance materiality
The application of materiality at the individual account or balance level. It is set at
an amount to reduce to an appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the
Group’s overall control environment, our judgement was that performance
materiality was 75% (2023: 75%) of our planning materiality, namely £4.6m
(2023: £5.8m). We have set performance materiality at this percentage as we did
not anticipate a significant level of audit differences following our 2023 audit.
CORPORATE GOVERNANCE STATEMENT
We have reviewed the directors’ statement in relation to going concern, longer-
term viability and that part of the Corporate Governance Statement relating to
the Group and Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of
the following elements of the Corporate Governance Statement is materially
consistent with the Financial Statements or our knowledge obtained during the audit:
– Directors’ statement with regards to the appropriateness of adopting the
going concern basis of accounting and any material uncertainties identified
set out on page 140;
– Directors’ explanation as to its assessment of the Company’s prospects, the
period this assessment covers and why the period is appropriate set out on
page 141;
– Director’s statement on whether it has a reasonable expectation that the
Group will be able to continue in operation and meets its liabilities set out on
page 141;
– Directors’ statement on fair, balanced and understandable set out on
page 168;
– Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 134;
– The section of the annual report that describes the review of effectiveness
of risk management and internal control systems set out on page 169; and;
– The section describing the work of the Audit & Risk committee set out on
page 165
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out on page
194, the directors are responsible for the preparation of the Financial Statements
and for being satisfied that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the directors are responsible for assessing
the Group and Parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no realistic
alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Financial
Statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these Financial Statements.
EXPLANATION AS TO WHAT EXTENT THE AUDIT WAS CONSIDERED
CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined above,
to detect irregularities, including fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for example, forgery
or intentional misrepresentations, or through collusion. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud
rests with both those charged with governance of the company and management.
– We obtained an understanding of the legal and regulatory frameworks that are
applicable to the group and determined that the most significant are frameworks
which are directly relevant to specific assertions in the Financial Statements are
those that relate to the reporting framework (UK adopted international
accounting standards, FRS 102, the Companies Act 2006 and UK Corporate
Governance Code). In addition, we concluded that there are certain significant
laws and regulations which may have an effect on the determination of the
amounts and disclosures in the Financial Statements being the Listing Rules of
the UK Listing Authority, and those laws and regulations relating to General
Data Protection Regulation (GDPR), health and safety and employee matters.
– We understood how Watches of Switzerland Group PLC is complying with
those frameworks by making enquiries of management, internal audit, those
responsible for legal and compliance matters and the Company Secretary
and General Counsel. We confirmed our enquiries through our review of
Board minutes, papers provided to the Audit & Risk Committee and
correspondence received from regulatory bodies.
– We assessed the susceptibility of the Group’s Financial Statements to material
misstatement, including how fraud might occur by meeting with management
and internal audit to understand where they considered there was
susceptibility to fraud. We also considered performance targets and the
potential incentives or opportunities to manage earnings or influence the
perceptions of analysts. We considered the programmes and controls that
the Group has established to address risks identified, or that otherwise
prevent, deter and detect fraud; and how senior management monitors
those programmes and controls. Where the risk was considered to be
higher, we performed audit procedures to address each identified fraud risk
as discussed in the key audit matters section above. These procedures
included testing manual journals and were designed to provide reasonable
assurance that the Financial Statements were free from material fraud.
– Based on this understanding we designed our audit procedures to identify
non-compliance with such laws and regulations. Our procedures involved
understanding management’s internal controls over compliance with laws
and regulations; reviewing internal audit reports and whistleblowing
investigation reports provided to the Audit & Risk Committee; making
enquiries of legal counsel, Group management, internal audit; and inspecting
journal entries for evidence of non-compliance.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at https://
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
– Following the recommendation from the Audit & Risk committee we were
appointed by the company on 17 October 2019 to audit the financial
statements for the year ending 26 April 2020 and subsequent financial periods.
– The period of total uninterrupted engagement including previous renewals
and reappointments is 5 years, covering the years ending 26 April 2020 to
28April 2024.
– The audit opinion is consistent with the additional report to the Audit &
RiskCommittee.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s members those matters we
are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
JULIE CARLYLE (SENIOR STATUTORY AUDITOR)
FOR AND ON BEHALF OF ERNST & YOUNG LLP, STATUTORY AUDITOR
London
26 June 2024
2 0 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
| 52-week period | 52week period | ||
| ended | ended | ||
| 28 April 2024 | 30 April 2023 | ||
| Note | £m | £m | |
Revenue | 2, 3 | ||
Cost of sales | ( | ( | |
Exceptional cost of sales | 4 | ||
| GROSS PROFIT | |||
Administrative expenses | ( | ( | |
Exceptional (impairment)/reversal of impairment of assets | 4 | ( | |
Exceptional other administrative expenses | 4 | ( | ( |
| OPERATING PROFIT | |||
Finance costs | 7 | ( | ( |
Finance income | 7 | ||
Exceptional finance costs | 4,7 | ( | ( |
| NET FINANCE COST | ( | ( | |
Profit before taxation | |||
Tax ation | 8 | ( | ( |
Profit for the financial period | |||
| EARNINGS PER SHARE | |||
Basic | 9 | ||
Diluted | 9 |
CONSOLIDATED INCOME STATEMENT
FOR THE 52 WEEKS ENDED 28 APRIL 2024
2 0 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 52 week period | 52 week period | ||
| ended | ended | ||
| 28 April 2024 | 30 April 2023 | ||
| Note | £m | £m | |
Profit for the financial period | |||
| Other comprehensive income/(expense): | |||
| ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS | |||
Foreign exchange gain/(loss) on translation of foreign operations | ( | ||
Related current tax movements | 8 | ( | |
( | |||
| ITEMS THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS | |||
Actuarial movements on defined benefit pension scheme | 19 | ( | |
Related deferred tax movements | 8 | ( | |
( | |||
Other comprehensive income/(expense) for the period | ( | ||
Total comprehensive income for the period |
The notes on pages 211 to 247 are an integral part of these Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 28 APRIL 2024
2 0 7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
| 28 April 2024 | 30 April 2023 | ||
| Note | £m | £m | |
| ASSETS | |||
| NON-CURRENT ASSETS | |||
Goodwill | 10 | ||
Intangible assets | 10 | ||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
Deferred tax assets | 8 | ||
Post-employment benefit asset | 19 | ||
Trade and other receivables | 13 | ||
| CURRENT ASSETS | |||
Inventories | 14 | ||
Current tax asset | |||
Trade and other receivables | 13 | ||
Cash and cash equivalents | 15 | ||
Total assets | |||
| LIABILITIES | |||
| CURRENT LIABILITIES | |||
Trade and other payables | 16 | ( | ( |
Current tax liability | ( | ||
Lease liabilities | 12 | ( | ( |
Provisions | 17 | ( | ( |
( | ( | ||
| NON-CURRENT LIABILITIES | |||
Trade and other payables | 16 | ( | ( |
Deferred tax liabilities | 8 | ( | ( |
Lease liabilities | 12 | ( | ( |
Borrowings | 18 | ( | ( |
Post-employment benefit obligations | 19 | ( | |
Provisions | 17 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| EQUITY | |||
Share capital | 20 | ||
Share premium | 20 | ||
Merger reserve | 20 | ( | ( |
Other reserves | 20 | ( | ( |
Retained earnings | |||
Foreign exchange reserve | 20 | ||
Total equity |
The notes on pages 211 to 247 are an integral part of these Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEET
AS AT 28 APRIL 2024
2 0 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| Foreign | Total equity | ||||||
| Share | Share | Merger | Other | Retained | exchange | attributable to | |
| capital | premium | reserve | reserves | earnings | reserve | owners | |
| £m | £m | £m | £m | £m | £m | £m | |
Balance at 1 May 2022 | ( | ( | |||||
Profit for the financial period | |||||||
Other comprehensive income, net of tax | ( | ( | |||||
Total comprehensive income | ( | ||||||
Purchase of own shares | ( | ( | |||||
Share-based payment charge (note 21) | |||||||
Share-based payments | ( | ||||||
Tax on items credited to equity | ( | ( | |||||
Tax on vested shares moved to current tax | |||||||
Total other transactions | ( | ( | |||||
Balance at 30 April 2023 | ( | ( | |||||
Profit for the financial period | |||||||
Other comprehensive income, net of tax | ( | ||||||
Total comprehensive income | |||||||
Purchase of own shares (note 20) | ( | ( | |||||
Share-based payment charge (note 21) | |||||||
Share-based payments | ( | ||||||
Tax on items credited to equity | ( | ( | |||||
Tax on vested shares moved to current tax | ( | ( | |||||
Total other transactions | ( | ( | ( | ||||
Balance at 28 April 2024 | ( | ( |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 28 APRIL 2024
2 0 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
| 52 week period | 52 week period | ||
| ended | ended | ||
| 28 April 2024 | 30 April 2023 | ||
| Note | £m | £m | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
Profit for the period | |||
| Adjustments for: | |||
Depreciation of property, plant and equipment | 11 | ||
Depreciation of right-of-use assets | 12 | ||
Depreciation of right-of-use assets – exceptional items (note 4) | 12 | ||
Amortisation of intangible assets | 10 | ||
Impairment of property, plant and equipment | 11 | ||
Impairment of right-of-use assets – exceptional items (note 4) | 12 | ||
Impairment of property, plant and equipment – exceptional items (note 4) | 11 | ||
Reversal of impairment of property, plant and equipment – exceptional items (note 4) | 11 | ( | |
Reversal of impairment of right-of-use assets – exceptional items (note 4) | 12 | ( | |
Loss on disposal of property, plant and equipment | 11 | ||
Gain on lease modifications | 12 | ( | ( |
Share-based payment charge | 21 | ||
Finance income | 7 | ( | ( |
Finance costs | 7 | ||
Finance costs – exceptional items (note 4) | 7 | ||
Tax ation | 8 | ||
Increase in inventory | ( | ( | |
(Increase)/decrease in debtors | ( | ||
(Decrease)/increase in creditors, provisions and pensions | ( | ||
Cash generated from operations | |||
Pension scheme contributions | 19 | ( | ( |
Tax paid | ( | ( | |
Total net cash generated from operating activities | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of non-current assets: | |||
Property, plant and equipment additions | 11 | ( | ( |
Intangible asset additions | 10 | ( | ( |
Movement on capital expenditure accrual | |||
Cash outflow from purchase of non-current assets | ( | ( | |
Interest received | |||
Acquisition of subsidiaries net of cash acquired | 24 | ( | ( |
Total net cash outflow from investing activities | ( | ( | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
Purchase of own shares | 20 | ( | ( |
Repayment of term loan | 18 | ( | |
Proceeds from multicurrency revolving loan facility | 18 | ||
Costs directly attributable to raising new loan facility | 18 | ( | |
Payment of capital element of leases | 12 | ( | ( |
Payment of interest element of leases | 12 | ( | ( |
Interest paid | ( | ( | |
Net cash outflow from financing activities | ( | ( | |
Net (decrease)/increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the period | |||
Exchange gains/(losses) on cash and cash equivalents | ( | ||
Cash and cash equivalents at the end of period | |||
| Comprised of: | |||
Cash at bank and in hand | 15 | ||
Cash in transit | 15 | ||
Cash and cash equivalents at end of period |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 52 WEEKS ENDED 28 APRIL 2024
210
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
211
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
212
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
213
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES (CONTINUED)
Computer software | 3 to 5 years |
Brands | 5 to 30 years |
Agency agreements | 10 years |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Land and buildings | Lease period |
Fittings and equipment | 3 to 10 years |
214
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
215
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES (CONTINUED)
Financial assets | Classification under IFRS 9 |
| Trade and other receivables | Amortised cost – held to collect as business |
| (excluding prepayments) | model and SPPI met |
Cash and short-term deposits | Amortised cost |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Financial liabilities | Classification under IFRS 9 |
| Interest-bearing loans and | Amortised cost |
| borrowings | |
| Trade and other payables (excluding | Amortised cost |
| accrued income) |
Financial liabilities at FVPL | Subsequently measured at fair value. Gains |
| and losses are recognised in the | |
| Consolidated Income Statement | |
| Interest-bearing loans and | Subsequently measured at amortised cost |
| borrowings | using the EIR method. The EIR amortisation |
| is included in finance costs in the Income | |
| Statement | |
| Trade and other payables (excluding | Subsequently measured at amortised cost |
| accrued income) |
216
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
217
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
218
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
219
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
2. SEGMENT REPORTING
The key Group performance measures are Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (Adjusted EBITDA) and Adjusted Earnings Before
Interest and Tax (Adjusted EBIT), both shown pre-exceptional items, as detailed below. The segment profit/loss is disclosed on a pre-IFRS 16 basis reflecting how
results are reported to the Chief Operating Decision Makers (CODMs) and how they are measured for the purposes of covenant testing. Both Adjusted EBITDA
and Adjusted EBIT are APMs and these measures provide stakeholders with additional useful information to assess the year-on-year trading performance of the
Group but should not be considered in isolation of statutory measures.
Adjusted EBITDA represents profit for the period before finance costs, finance income, taxation, depreciation, amortisation, exceptional items presented in the
Group’s Consolidated Income Statement (consisting of exceptional administrative expenses, exceptional finance costs and exceptional impairment) on a pre-IFRS
16 basis. UK and Europe operating segments are aggregated into one reporting segment, which is reflective of the management structure in place and meets the
aggregation criteria of IFRS 8.
| 52 week period ended 28 April 2024 | ||||
UK and Europe | US | Corporate | Tot al | |
£m | £m | £m | £m | |
Revenue | 846.1 | 691.8 | – | 1,537.9 |
Net margin | 307.3 | 254.9 | – | 562.2 |
| Less: | ||||
Showroom costs | (162.6) | (126.5) | – | (289.1) |
Overheads | (50.2) | (32.8) | (2.3) | (85.3) |
Showroom opening and closing costs | (5.6) | (3.3) | – | (8.9) |
Adjusted EBITDA | 88.9 | 92.3 | (2.3) | 178.9 |
Depreciation, amortisation, impairment and loss on disposal of assets | (27.6) | (15.2) | (1.4) | (44.2) |
Segment profit/(loss)* | 61.3 | 77.1 | (3.7) | 134.7 |
Impact of IFRS 16 (excluding interest on leases) | 17.2 | |||
Net finance costs | (26.6) | |||
Exceptional cost of sales (note 4) | 0.5 | |||
Exceptional administrative expenses (note 4) | (6.2) | |||
Exceptional impairment of assets (note 4) | (26.2) | |||
Exceptional finance costs (note 4) | (1.3) | |||
Profit before taxation for the financial period | 92.1 |
* Segment profit/(loss) is defined as being Earnings Before Interest, Tax, exceptional items and IFRS 16 adjustments (Adjusted EBIT).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 2 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 52 week period ended 30 April 2023 | ||||
UK and Europe | US | Corporate | Tota l | |
£m | £m | £m | £m | |
Revenue | 889.9 | 652.9 | – | 1,542.8 |
Net margin | 330.0 | 246.3 | – | 576.3 |
| Less: | ||||
Showroom costs | (153.6) | (125.6) | – | (279.2) |
Overheads | (47.8) | (30.9) | (5.4) | (84.1) |
Showroom opening and closing costs | (7.3) | (3.4) | (0.9) | (11.6) |
Adjusted EBITDA | 121.3 | 86.4 | (6.3) | 201.4 |
Depreciation, amortisation, impairment and loss on disposal of assets | (23.2) | (13.1) | – | (36.3) |
Segment profit/(loss)* | 98.1 | 73.3 | (6.3) | 165.1 |
Impact of IFRS 16 (excluding interest on leases) | 13.7 | |||
Net finance costs | (23.1) | |||
Exceptional administrative expenses (note 4) | (0.9) | |||
Exceptional reversal of impairment of assets (note 4) | 0.7 | |||
Exceptional finance costs (note 4) | (0.7) | |||
Profit before taxation for the financial period | 154.8 |
Entity-wide revenue disclosures
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
| UK AND EUROPE | ||
Luxury watches | 709.4 | 749.6 |
Luxury jewellery | 62.1 | 67.8 |
Services/other | 74.6 | 72.5 |
Total | 846.1 | 889.9 |
| US | ||
Luxury watches | 635.3 | 586.5 |
Luxury jewellery | 40.3 | 51.4 |
Services/other | 16.2 | 15.0 |
Total | 691.8 | 652.9 |
| GROUP | ||
Luxury watches | 1,344.7 | 1,336.1 |
Luxury jewellery | 102.4 | 119.2 |
Services/other | 90.8 | 87.5 |
Total | 1,537.9 | 1,542.8 |
‘Services/other’ consists of the sale of fashion and classic watches and jewellery, the sale of gifts, servicing, repairs and product insurance.
Information regarding geographical areas, including revenue from external customers, is disclosed above.
No single customer accounted for more than 10% of revenue in any of the financial periods noted above.
2 2 1
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
2. SEGMENT REPORTING (CONTINUED)
Entity-wide statutory non-current asset disclosures
28 April 2024 | 30 April 2023 | |
£m | £m | |
| UK AND EUROPE | ||
Goodwill | 137.6 | 121.6 |
Intangible assets | 5.1 | 5.0 |
Property, plant and equipment | 115.7 | 100.2 |
Right-of-use assets | 252.3 | 244.0 |
Total | 510.7 | 470.8 |
| US | ||
Goodwill | 61.7 | 61.2 |
Intangible assets | 11.3 | 12.6 |
Property, plant and equipment | 65.2 | 54.2 |
Right-of-use assets | 124.3 | 115.1 |
Total | 262.5 | 243.1 |
| CORPORATE | ||
Property, plant and equipment | 10.5 | – |
Right-of-use assets | 5.2 | – |
Total | 15.7 | – |
| GROUP | ||
Goodwill | 199.3 | 182.8 |
Intangible assets | 16.4 | 17.6 |
Property, plant and equipment | 191.4 | 154.4 |
Right-of-use assets | 381.8 | 359.1 |
Total | 788.9 | 713.9 |
| 52 week period ended 28 April 2024 | |||
| Rendering of | |||
| Sale of goods | services | Total | |
£m | £m | £m | |
UK and Europe | 810.6 | 35.5 | 846.1 |
US | 678.8 | 13.0 | 691.8 |
Total | 1,489.4 | 48.5 | 1,537.9 |
| 52 week period ended 30 April 2023 | |||
| Rendering of | |||
| Sale of goods | services | Total | |
£m | £m | £m | |
UK and Europe | 855.4 | 34.5 | 889.9 |
US | 641.2 | 11.7 | 652.9 |
Total | 1,496.6 | 46.2 | 1,542.8 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
222
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
4. EXCEPTIONAL ITEMS
Exceptional items are those that in the judgement of the Directors need to be separately disclosed by virtue of their size, nature or incidence, in order to draw the
attention of the reader and to show the underlying business performance of the Group. Such items are included within the Income Statement caption to which
they relate and are separately disclosed on the face of the Consolidated Income Statement.
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
| EXCEPTIONAL COST OF SALES | ||
Acquisition costs (i) | (0.7) | – |
Rolex Old Bond Street (IFRS 16 depreciation) (ii) | (1.2) | – |
Reversal of inventory provision created on acquisition (iii) | 2.4 | – |
Total exceptional cost of sales | 0.5 | – |
| EXCEPTIONAL ADMINISTRATIVE COSTS | ||
Showroom impairment (iv) | ||
Impairment of property, plant and equipment | (7.2) | – |
Impairment of right-of-use assets | (13.0) | – |
Other onerous contracts | (1.0) | – |
European showroom impairment (v) | ||
Impairment of property, plant and equipment | (2.6) | – |
Impairment of right-of-use assets | (3.4) | – |
Other costs | (2.6) | – |
Reversal of impairment of property, plant and equipment | – | 0.5 |
Reversal of impairment of right-of-use assets | – | 0.2 |
Professional and legal expenses on actual and prospective business acquisitions (vi) | (2.6) | (0.9) |
Total exceptional administrative costs | (32.4) | (0.2) |
| EXCEPTIONAL FINANCE COSTS | ||
Rolex Old Bond Street (IFRS 16 interest) (ii) | (1.3) | – |
Amortisation of capitalised transaction costs | – | (0.7) |
Total exceptional finance costs | (1.3) | (0.7) |
Total exceptional items | (33.2) | (0.9) |
(i) Acquisition costs
Costs associated with the integration of Ernest Jones showrooms acquired in the year are treated as exceptional as they are regarded as non-trading, non-underlying costs. The costs were incurred in the period
between acquisition and showroom opening.
(ii) Rolex Old Bond Street
A new 7,200 sq. ft showroom is being built in partnership with Rolex. This new flagship will be our largest Rolex showroom and reflects the importance of the London market and the special relevance of London to
the history of Rolex. The cost shown here is the IFRS 16 depreciation charge and other costs whilst the showroom is being constructed. They are deemed to be exceptional in nature given that this unique
proposition results in a project size and complexity significantly outside of a standard build, coupled with documented project delays outside of the Group’s control.
(iii) Reversal of inventory provision created on acquisition
In the prior period, for the Betteridge acquisition, an estimate was made of the fair value of inventory acquired with a provision recorded in goodwill. During the year, the Group achieved higher product margins on
a number of these inventory lines through maximisation of our CRM database. The gain is deemed to be exceptional in nature.
(iv) Showroom impairment
The current macroeconomic environment, increased interest rates, and inflationary trends gave rise to indicators of impairment in the current period. Consequently, discounted cashflows were performed on all
cash generating units with indicators of impairment. This resulted in an impairment charge of £20.2 million being recorded in the period. This is allocated over the property, plant and equipment, and the right-of-use
assets of those showrooms as required by IAS 36 ‘Impairment of Assets’. A further provision of £1.0 million relates to associated onerous contracts.
(v) European showroom impairment
The exceptional costs are reflective of both asset write downs and other onerous costs. As announced after the year-end date, the Group intends to reallocate investment from the European market into the UK
and US. Please refer to note 26 for more details.
(vi) Professional and legal expenses on actual and prospective business acquisitions
Professional and legal expenses on business combinations have been expensed to the Consolidated Income Statement as an exceptional cost as they are regarded as non-trading, non-underlying costs and are
considered to be material by nature. The total cost shown here also includes expenses incurred in the year in relation to the Roberto Coin Inc. acquisition which closed post year-end.
All of these items are considered exceptional as they are linked to unique non-recurring events and do not form part of the underlying trading of the Group.
2 2 3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
6. EMPLOYEES AND DIRECTORS
Staff costs for continuing operations recognised in operating profit for the Group during the period:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Wages and salaries | 132.0 | 126.2 |
Social security costs | 11.3 | 10.4 |
Share-based payments (note 21) | 2.1 | 3.5 |
Share-based payments social security costs | 0.3 | 0.5 |
Pensions costs – defined contribution schemes (note 19) | 3.6 | 3.1 |
Pensions costs – defined benefit scheme (note 19) | 0.1 | 0.2 |
Total | 149.4 | 143.9 |
Average number of people (including Executive Directors) employed:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
Retail staff | 2,135 | 2,010 |
Services staff | 149 | 103 |
Administrative staff | 667 | 665 |
Total | 2,951 | 2,778 |
Average Full Time Equivalents (FTE) (including Executive Directors) employed:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
Retail staff | 1,982 | 1,898 |
Services staff | 142 | 99 |
Administrative staff | 645 | 646 |
Total | 2,769 | 2,643 |
Further disclosure of the amounts paid to key management is included within note 23.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 2 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
| £m | £m | |
| FINANCE COSTS | ||
Interest payable on long-term borrowings | (7.9) | (5.6) |
Interest payable on short-term borrowings | – | (0.4) |
Amortisation of capitalised transaction costs | (0.5) | (0.8) |
Interest on lease liabilities (note 12) | (20.8) | (17.2) |
Net foreign exchange expense on financing activities | (0.3) | – |
Total finance costs | (29.5) | (24.0) |
| FINANCE INCOME | ||
Bank interest receivable | 2.9 | 0.9 |
Total finance income | 2.9 | 0.9 |
Total net finance costs excluding exceptional items | (26.6) | (23.1) |
Exceptional finance costs (note 4) | (1.3) | (0.7) |
Total net finance costs | (27.9) | (23.8) |
8. TAXATION
Tax charge for the period
The tax charge for the period is shown below. Tax is made up of current and deferred tax. Current tax is the amount payable on the taxable income in the period
and any adjustments to tax payable in previous periods.
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
| £m | £m | |
| CURRENT TAX: | ||
Current UK tax on profits for the period | 8.7 | 13.0 |
Current US tax on profits for the period | 16.9 | 16.5 |
Adjustments in respect of prior periods – UK and Europe | 1.1 | (1.8) |
Adjustments in respect of prior periods – US | 0.1 | 0.2 |
Total current tax | 26.8 | 27.9 |
| DEFERRED TAX: | ||
Origination and reversal of temporary differences | 5.2 | 5.7 |
Impact of change in tax rate | 0.1 | (0.5) |
Adjustments in respect of prior periods | 0.9 | (0.1) |
Total deferred tax | 6.2 | 5.1 |
Tax expense reported in the Income Statement | 33.0 | 33.0 |
2 2 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
8. TAXATION (CONTINUED)
Factors affecting the tax charge in the period
The tax rate for the current period varied from the standard rate of corporation tax in the UK due to the following factors:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
| £m | £m | |
Profit before taxation | 92.1 | 154.8 |
Notional taxation at standard UK corporation tax rate of 25.0% (2023: 19.5%) | 23.0 | 30.2 |
Non-deductible expenses – recurring | 2.5 | 1.4 |
Non-deductible expenses – exceptional items | 1.9 | – |
Overseas tax differentials | 1.9 | 4.6 |
Deferred tax not recognised – European subsidiaries | 1.5 | – |
Adjustments in respect of prior periods | 2.1 | (1.7) |
Super-deduction on fixed assets | – | (1.9) |
Current/deferred tax rate difference on current year movements | – | 0.9 |
Adjustments due to deferred tax rate change | 0.1 | (0.5) |
Tax expense reported in the Income Statement | 33.0 | 33.0 |
Tax recognised in other comprehensive income
In addition to the amount charged to the Consolidated Income Statement, tax movements recognised in other comprehensive income were as follows:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
| £m | £m | |
| CURRENT TAX: | ||
Foreign exchange difference on translation of foreign operations | (0.1) | 0.1 |
| DEFERRED TAX: | ||
Pension benefit obligation | 0.2 | (0.1) |
Tax charge in other comprehensive income | 0.1 | – |
28 April 2024 | 30 April 2023 | |
£m | £m | |
Deferred tax assets | 0.4 | 6.2 |
Deferred tax liabilities | (3.4) | (3.0) |
Total | (3.0) | 3.2 |
28 April 2024 | 30 April 2023 | ||
£m | £m | ||
Accelerated capital allowances | (i) | (15.4) | (9.8) |
Non-trade tax losses | (ii) | 1.2 | 1.2 |
Trade tax losses | (iii) | 2.0 | 2.7 |
Deferred tax on leases (IFRS 16) | (iv) | 7.0 | 5.5 |
Share-based payments | (v) | 1.5 | 4.0 |
Intangible assets | (vi) | (4.1) | (2.5) |
Other temporary differences | (vii) | 3.7 | 2.1 |
Deferred tax on business combinations | (viii) | 1.1 | – |
Total | (3.0) | 3.2 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 2 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Balance at 1 May 2023 | 3.2 | 8.9 |
| RECOGNISED IN THE INCOME STATEMENT: | ||
Accelerated capital allowances | (5.6) | (6.5) |
Pension benefit obligations | (0.2) | – |
Movement on unused tax losses | (0.7) | 0.6 |
Deferred tax on leases (IFRS 16) | 1.5 | 0.8 |
Share-based payments | (1.3) | 0.8 |
Intangible fixed assets | (1.6) | 0.2 |
Other temporary differences | 1.7 | (1.0) |
| RECOGNISED IN OTHER COMPREHENSIVE INCOME: | ||
Pension benefit obligations | 0.2 | (0.1) |
Foreign exchange movements | (0.1) | – |
| RECOGNISED DIRECTLY WITHIN EQUITY: | ||
Share-based payments | (1.1) | (0.5) |
Vested share-based payments | (0.1) | – |
| RECOGNISED DIRECTLY WITHIN GOODWILL: | ||
| Deferred tax acquired on business combination | 1.1 | – |
Balance at 28 April 2024 | (3.0) | 3.2 |
2 2 7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
9. EARNINGS PER SHARE (EPS)
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
| BASIC | ||
EPS | 25.0p | 51.2p |
EPS adjusted for exceptional items | 36.8p | 51.5p |
EPS adjusted for exceptional items and pre-IFRS 16 | 38.0p | 52.7p |
| DILUTED | ||
EPS | 24.8p | 50.9p |
EPS adjusted for exceptional items | 36.6p | 51.2p |
EPS adjusted for exceptional items and pre-IFRS 16 | 37.7p | 52.3p |
Basic EPS is based on the profit for the year attributable to the equity holders of the Parent Company divided by the weighted average number of shares.
Diluted EPS is calculated by adjusting the weighted average number of shares used for the calculation of basic EPS as increased by the dilutive effect of potential
ordinary shares.
The following table reflects the profit and share data used in the basic and diluted EPS calculations:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Profit after tax attributable to equity holders of the Parent Company | 59.1 | 121.8 |
| ADJUST FOR EXCEPTIONAL ITEMS: | ||
Exceptional items | 33.2 | 0.9 |
Tax on exceptional items | (5.2) | (0.2) |
Profit adjusted for exceptional items | 87.1 | 122.5 |
Pre-exceptional IFRS 16 adjustments, net of tax | 2.8 | 2.7 |
Profit adjusted for exceptional items and IFRS 16 | 89.9 | 125.2 |
The following table reflects the share data used in the basic and diluted EPS calculations:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
| WEIGHTED AVERAGE NUMBER OF SHARES: | ‘000 | ‘000 |
Weighted average number of ordinary shares in issue | 236,753 | 237,641 |
Weighted average shares for basic EPS | 236,753 | 237,641 |
Weighted average dilutive potential shares | 1,446 | 1,713 |
Weighted average shares for diluted EPS | 238,199 | 239,354 |
The weighted average number of shares takes into account the weighted average effect of changes in own shares during the period. There have been no transactions
involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these Consolidated Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 2 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 28 April 2024 | |||||
Goodwill | Brands | Agency agreement | Computer software | Tot al | |
£m | £m | £m | £m | £m | |
| COST | |||||
At 1 May 2023 | 182.8 | 14.0 | 2.8 | 13.2 | 212.8 |
Acquired on business acquisition (note 24) | 16.0 | – | – | – | 16.0 |
Additions | – | – | – | 2.4 | 2.4 |
Foreign exchange differences | 0.5 | 0.1 | – | – | 0.6 |
At 28 April 2024 | 199.3 | 14.1 | 2.8 | 15.6 | 231.8 |
| ACCUMULATED AMORTISATION AND IMPAIRMENT | |||||
At 1 May 2023 | – | 3.5 | 1.6 | 7.3 | 12.4 |
Charge for the period | – | 0.6 | 0.2 | 2.8 | 3.6 |
Foreign exchange differences | – | – | – | 0.1 | 0.1 |
At 28 April 2024 | – | 4.1 | 1.8 | 10.2 | 16.1 |
| NET BOOK VALUE | |||||
At 28 April 2024 | 199.3 | 10.0 | 1.0 | 5.4 | 215.7 |
At 30 April 2023 | 182.8 | 10.5 | 1.2 | 5.9 | 200.4 |
| 30 April 2023 | |||||
Goodwill | Brands | Agency agreement | Computer software | Tot al | |
£m | £m | £m | £m | £m | |
| COST | |||||
At 2 May 2022 | 165.1 | 14.0 | 2.8 | 10.5 | 192.4 |
Acquired on business acquisition (note 24) | 18.2 | – | – | – | 18.2 |
Additions | – | – | – | 2.7 | 2.7 |
Foreign exchange differences | (0.5) | – | – | – | (0.5) |
At 30 April 2023 | 182.8 | 14.0 | 2.8 | 13.2 | 212.8 |
| ACCUMULATED AMORTISATION AND IMPAIRMENT | |||||
At 2 May 2022 | – | 2.9 | 1.3 | 5.0 | 9.2 |
Charge for the period | – | 0.6 | 0.3 | 2.3 | 3.2 |
At 30 April 2023 | – | 3.5 | 1.6 | 7.3 | 12.4 |
| NET BOOK VALUE | |||||
At 30 April 2023 | 182.8 | 10.5 | 1.2 | 5.9 | 200.4 |
At 1 May 2022 | 165.1 | 11.1 | 1.5 | 5.5 | 183.2 |
2 2 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
10. INTANGIBLE ASSETS (CONTINUED)
28 April 2024 | 30 April 2023 | |
£m | £m | |
Heritage (UK) | 137.6 | 121.6 |
Watches of Switzerland (US) | 24.2 | 24.0 |
Betteridge (US) | 22.1 | 21.9 |
Mayors Jewelers (US) | 12.2 | 12.1 |
The Wynn Resorts (US) | 3.0 | 3.0 |
Analog:Shift (US) | 0.2 | 0.2 |
Total | 199.3 | 182.8 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
23 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
11. PROPERTY, PLANT AND EQUIPMENT
| 28 April 2024 | |||
| Fittings and | |||
| Land and buildings | equipment | Tot al | |
£m | £m | £m | |
| COST | |||
At 1 May 2023 | 2.5 | 264.4 | 266.9 |
Additions | 0.1 | 81.5 | 81.6 |
Acquired on business acquisition (note 24) | – | 5.8 | 5.8 |
Disposals | (0.4) | (9.7) | (10.1) |
Foreign exchange differences | – | 0.4 | 0.4 |
At 28 April 2024 | 2.2 | 342.4 | 344.6 |
| ACCUMULATED DEPRECIATION | |||
At 1 May 2023 | 1.7 | 110.8 | 112.5 |
Charge for the period | 0.2 | 39.5 | 39.7 |
Impairment – exceptional items (note 4) | – | 9.8 | 9.8 |
Disposals | (0.3) | (8.7) | (9.0) |
Foreign exchange differences | – | 0.2 | 0.2 |
At 28 April 2024 | 1.6 | 151.6 | 153.2 |
| NET BOOK VALUE | |||
At 28 April 2024 | 0.6 | 190.8 | 191.4 |
At 30 April 2023 | 0.8 | 153.6 | 154.4 |
| 30 April 2023 | |||
| Fittings and | |||
| Land and buildings | equipment | Tot al | |
£m | £m | £m | |
| COST | |||
At 2 May 2022 | 2.7 | 202.4 | 205.1 |
Additions | – | 75.0 | 75.0 |
Disposals | (0.2) | (12.4) | (12.6) |
Foreign exchange differences | – | (0.6) | (0.6) |
At 30 April 2023 | 2.5 | 264.4 | 266.9 |
| ACCUMULATED DEPRECIATION | |||
At 2 May 2022 | 1.8 | 90.8 | 92.6 |
Charge for the period | 0.1 | 32.2 | 32.3 |
Impairment | – | 0.4 | 0.4 |
Reversal of impairment – exceptional items (note 4) | – | (0.5) | (0.5) |
Disposals | (0.2) | (11.6) | (11.8) |
Foreign exchange differences | – | (0.5) | (0.5) |
At 30 April 2023 | 1.7 | 110.8 | 112.5 |
| NET BOOK VALUE | |||
At 30 April 2023 | 0.8 | 153.6 | 154.4 |
At 1 May 2022 | 0.9 | 111.6 | 112.5 |
Expenditure on assets in the course of construction at 28 April 2024 was £26.0 million (2023: £39.0 million). The cost of assets which continue to be used that have
a £nil net book value (excluding impaired assets) total £41.2 million (2023: £23.7 million).
231
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
11. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes, a CGU is defined as the smallest identifiable group of assets that generate independent cash flows which are monitored by
management and the Chief Operating Decision Makers (CODMs). The Group considers this to be showroom locations or offices. Each CGU is tested for
impairment at the balance sheet date if any indicators of impairment have been identified.
The value-in-use of each CGU is calculated based on the Group’s latest budget and forecast cash flows, covering a three-year period, which have regard to historic
performance and knowledge of the current market, together with the Group’s views on the future achievable growth. Cash flows beyond this three-year period
are extrapolated using a long-term growth rate based on management’s future expectations, with reference to forecast GDP growth. These growth rates do not
exceed the long-term growth rate for the Group’s operations in the relevant territory. The recoverable amount of certain European mono-brand boutiques is based
on fair value less costs to sell.
The key assumptions in the value-in-use calculations are the growth rates of sales and gross profit margins, long-term growth rates and the risk-adjusted pre-tax
discount rates. Pre-tax discount rates are derived from the Group’s weighted average cost of capital, which has been calculated using the capital asset pricing model,
the inputs of which include a country risk-free rate, equity risk premium and a risk adjustment (beta). The pre-tax discount rates are 13.0% in the UK and 13.3% in
the US. Pre-tax discount rates are used to discount pre-tax cash flows. The post-tax discount rates, calculated in the same manner as the pre-tax discount rates,
are 9.9% in the UK and 10.5% in the US.
During the period, the Group recognised an exceptional impairment charge of £9.8m relating to property, plant and equipment. The Group reviewed the
profitability of its showroom network, taking into account the potential future impact on customer demand and increased costs. At 28 April 2024, following the
impairment having been booked, all showroom asset values are supported by their value-in-use recoverable amount.
As disclosed in the accounting policies (note 1), the cash flows used within the impairment model are based on assumptions which are sources of estimation
uncertainty and movements in these assumptions could lead to further impairments. Management has performed sensitivity analysis on the key assumptions in the
impairment model using reasonably possible changes in these key assumptions across the showroom portfolio.
Sales growth rates are in line with the growth rate in the Guidance issued (given on page 13). Reducing the FY25 sales guidance by 10.0% and modelling this lower
performance through the outer periods, would result in an increased impairment charge of £6.3 million. A 2.0% increase in the discount rate would increase the
impairment charge by £2.0 million. In combination, a 10.0% sales reduction and a 2.0% increase in discount rate would increase the impairment charge by £8.1 million.
This analysis does not assume any improvement in macroeconomic conditions or interest rates. Reasonably possible changes of the other assumptions would have
no further significant impact on the impairment charge.
12. LEASES
Group as a lessee
Right-of-use assets have been grouped into two groups being Properties and Other. Properties are defined as land and buildings leased for our showrooms and offices
which are generally leased for between five and ten years with some office buildings leased for longer. Other leases are mainly motor vehicles which are in general
leased for four years. There are several lease contracts that include extension and termination options and variable lease payments. Management assesses the lease
term at inception based on facts and circumstances applicable to each property including the period over which the investment appraisal was initially considered.
Management reviews the retail lease portfolio on an ongoing basis, taking into account retail performance and future trading expectations. In certain instances,
management may exercise break options, negotiate lease reductions or decide not to negotiate a lease extension at the end of the lease term. The most significant
factor impacting future lease payments is the changes management chooses to make to the showroom portfolio.
A number of the retail property leases incur payments based on a percentage of revenue achieved at the location. Changes in future variable lease payments will
typically reflect changes in the Group’s retail revenues. In line with IFRS 16, variable lease payments which are not linked to an index are not included in the lease liability.
The Group also has certain leases with lease terms of 12 months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’
and ‘lease of low-value assets’ recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Properties | Other | Tot al | |
£m | £m | £m | |
At 1 May 2023 | 358.0 | 1.1 | 359.1 |
Additions | 88.3 | 0.6 | 88.9 |
Acquired on business acquisition (note 24) | 14.5 | – | 14.5 |
Lease surrenders and breaks | (15.4) | – | (15.4) |
Impairment – exceptional items (note 4) | (16.4) | – | (16.4) |
Depreciation | (54.3) | (0.5) | (54.8) |
Depreciation – exceptional items (note 4) | (1.2) | – | (1.2) |
Leases renewed during the period | 6.0 | – | 6.0 |
Lease modifications and expansions | 0.5 | – | 0.5 |
Foreign exchange differences | 0.6 | – | 0.6 |
At 28 April 2024 | 380.6 | 1.2 | 381.8 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
232
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Right-of-use assets (continued)
Properties | Other | Tot al | |
£m | £m | £m | |
At 2 May 2022 | 292.8 | 0.8 | 293.6 |
Additions | 101.0 | 0.7 | 101.7 |
Lease surrenders and breaks | (9.6) | – | (9.6) |
Reversal of impairment – exceptional items (note 4) | 0.2 | – | 0.2 |
Depreciation | (49.9) | (0.4) | (50.3) |
Leases renewed during the period | 14.7 | – | 14.7 |
Lease modifications and expansions | 10.1 | – | 10.1 |
Foreign exchange differences | (1.3) | – | (1.3) |
At 30 April 2023 | 358.0 | 1.1 | 359.1 |
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease liabilities
Properties | Other | Tot al | |
£m | £m | £m | |
At 1 May 2023 | (409.4) | (1.0) | (410.4) |
Additions | (86.4) | (0.6) | (87.0) |
Acquired on business acquisition (note 24) | (18.5) | – | (18.5) |
Lease surrenders and breaks | 16.1 | – | 16.1 |
Interest (note 7) | (20.8) | – | (20.8) |
Interest – exceptional items (note 4) | (1.3) | – | (1.3) |
Leases renewed during the period | (5.7) | – | (5.7) |
Lease modifications and expansions | (0.4) | – | (0.4) |
Payments | 67.6 | 0.5 | 68.1 |
Foreign exchange differences | (0.5) | – | (0.5) |
At 28 April 2024 | (459.3) | (1.1) | (460.4) |
Lease liabilities
Properties | Other | Tot al | |
£m | £m | £m | |
At 2 May 2022 | (339.9) | (0.7) | (340.6) |
Additions | (98.6) | (0.7) | (99.3) |
Lease surrenders and breaks | 10.4 | – | 10.4 |
Interest (note 7) | (17.2) | – | (17.2) |
Leases renewed during the period | (14.3) | – | (14.3) |
Lease modifications and expansions | (9.7) | – | (9.7) |
Payments | 58.8 | 0.4 | 59.2 |
Foreign exchange differences | 1.1 | – | 1.1 |
At 30 April 2023 | (409.4) | (1.0) | (410.4) |
233
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
12. LEASES (CONTINUED)
The following are the amounts recognised in the Consolidated Income Statement:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Depreciation expense of right-of-use assets | (54.8) | (50.3) |
Depreciation expense of right-of-use assets – exceptional items (note 4) | (1.2) | – |
Interest expense on lease liabilities | (20.8) | (17.2) |
Interest expense on lease liabilities – exceptional items (note 4) | (1.3) | – |
Impairment of right-of-use assets – exceptional items (note 4) | (16.4) | – |
Reversal of impairment of right-of-use assets – exceptional items (note 4) | – | 0.2 |
Gain on lease modifications | 0.8 | 1.3 |
Expense relating to short-term leases (included within cost of sales) | (1.4) | (0.7) |
Variable lease payments (included within cost of sales) | (6.8) | (7.0) |
Total amount recognised in the Consolidated Income Statement | (101.9) | (73.7) |
Rental expense for contracts not in the scope of IFRS 16 totalled £3.6 million (2023: £3.5 million). Contracts not in the scope of IFRS 16 are contracts that were
considered to be leases under IAS 17 which do not meet the definition under IFRS 16, principally because the supplier is considered to have substantive substitution
rights over the associated assets.
Total cash flows in relation to leases, as defined in IFRS 16, in the 52-week period ended 28 April 2024 are £75.9m (2023: £67.9 million). This relates to payments
of £46.0 million (2023: £42.0 million) of lease principal, £22.1 million (2023: £17.2 million) of lease interest, £6.4 million (2023: £8.0 million) of variable lease payments
and £1.4 million (2023: £0.7 million) of other lease payments principally relating to short-term leases and leases in which tenancy has continued after the lease term
has ended.
Maturity analysis of lease liabilities
The below table gives the undiscounted cash flows which relate to the leases recognised in line with IFRS 16. For leases which contain a break clause, the full liability
to the end of the lease term is shown, unless highlighted in the narrative below.
28 April 2024 | 30 April 2023 | |
£m | £m | |
Within 1 year | 78.7 | 63.1 |
Between 1 and 2 years | 77.9 | 67.9 |
Between 2 and 3 years | 74.7 | 63.4 |
Between 3 and 4 years | 70.2 | 59.7 |
Between 4 and 5 years | 64.4 | 57.4 |
Total for the periods thereafter | 214.4 | 192.4 |
Total | 580.3 | 503.9 |
As at 28 April 2024, 13 (2023: 11) leases have cash flows that exceed ten years. The value of undiscounted cash flows greater than ten years totals £22.3 million
(2023: £15.7 million).
Future possible cash outflows not included in the lease liability
Some leases contain break clauses to provide operational flexibility. In some instances, the Group has identified certain leases where it is reasonably likely that a
break will be served and as such has reflected this in the term of the lease. Potential future undiscounted lease payments not included in the reasonably certain lease
term and hence not included in lease liabilities total £10.8 million (2023: £7.9 million).
Future increases or decreases in rentals linked to an index or rate, which is applicable to two properties, are not included in the lease liability until the change in cash
flows takes effect. Approximately 50.2% of leases (2023: 53.8%) will be subject to rent reviews in future periods with rental changes linked to rent reviews which
typically occur on a five-yearly basis. The Group is committed to payments totalling £33.1 million (2023: £82.1 million) in relation to leases that have been agreed
but have not yet commenced and as such, do not form part of the lease liability balance and are not included within the maturity analysis above.
Impairment of right-of-use assets
The Group has incurred an exceptional impairment charge of £16.4 million in the year in relation to right-of-use assets. Refer to note 11 for further disclosure relating
to impairment of non-current assets including right-of-use assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
23 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
28 April 2024 | 30 April 2023 | |||
Current | Non-current | Current | Non-current | |
£m | £m | £m | £m | |
Trade receivables | 10.1 | – | 6.6 | – |
Other receivables | 5.7 | 2.1 | 5.5 | 2.1 |
Allowance for expected credit losses | (0.5) | – | (0.3) | – |
15.3 | 2.1 | 11.8 | 2.1 | |
Prepayments | 7.2 | – | 5.9 | – |
Total | 22.5 | 2.1 | 17.7 | 2.1 |
28 April 2024 | 30 April 2023 | |
£m | £m | |
Opening balance | 0.3 | 0.2 |
Increase in allowance – cost of sales | 0.2 | 0.1 |
Balance at period end | 0.5 | 0.3 |
14. INVENTORIES
28 April 2024 | 30 April 2023 | |
£m | £m | |
Finished goods | 389.2 | 352.3 |
Work in progress | 4.1 | 3.7 |
Inventories | 393.3 | 356.0 |
15. CASH AND CASH EQUIVALENTS
28 April 2024 | 30 April 2023 | |
£m | £m | |
Cash at bank and in hand | 93.8 | 120.7 |
Cash in transit | 21.9 | 15.7 |
Cash and cash equivalents | 115.7 | 136.4 |
Included in cash and cash equivalents is restricted cash of £16.4 million (2023: £14.8 million). Restricted cash is defined as cash controlled by the Group but which is
not freely useable by the Group in day-to-day operations. £16.4 million (2023: £14.1 million) relates to amounts which are contractually restricted based on third party
agreements and required liquidity reserves, with regard to the Group’s provision of insurance services. As at 28 April 2024, the Group has £nil (2023: £0.7 million)
held in escrow, whereby the cash is restricted, relating to a business combination.
28 April 2024 | 30 April 2023 | |||
Current | Non-current | Current | Non-current | |
£m | £m | £m | £m | |
Trade payables | (123.7) | – | (128.6) | – |
Other taxation and social security | (16.1) | – | (14.0) | – |
Accruals and deferred income | (75.6) | (1.1) | (76.1) | (0.9) |
Total | (215.4) | (1.1) | (218.7) | (0.9) |
23 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
28 April 2024 | 30 April 2023 | |||
Current | Non-current | Current | Non-current | |
£m | £m | £m | £m | |
Dilapidations | (1.4) | (8.1) | (1.8) | (6.0) |
Onerous | (0.5) | (0.6) | – | – |
Total | (1.9) | (8.7) | (1.8) | (6.0) |
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Opening balance | (7.8) | (5.1) |
Increase in provision | (2.3) | (3.0) |
Utilised | 0.6 | 0.3 |
Balance at period end | (9.5) | (7.8) |
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Opening balance | – | – |
Charged to Income Statement | (1.3) | – |
Utilised | 0.2 | – |
Balance at period end | (1.1) | – |
28 April 2024 | 30 April 2023 | |
£m | £m | |
| NON-CURRENT | ||
Term loan | – | (120.0) |
Multicurrency revolving loan facility | (115.0) | – |
Associated capitalised transaction costs | 1.7 | – |
Total borrowings | (113.3) | (120.0) |
1 May 2023 | Cash flow | Non-cash changes 1 | Foreign exchange | 28 April 2024 | |
£m | £m | £m | £m | £m | |
Cash and cash equivalents | 136.4 | (21.5) | – | 0.8 | 115.7 |
Term loan | (120.0) | 120.0 | – | – | – |
Multicurrency revolving loan facility | – | (115.0) | – | – | (115.0) |
Net cash/(debt) excluding capitalised transaction costs (pre-IFRS 16) | 16.4 | (16.5) | – | 0.8 | 0.7 |
Capitalised transaction costs | – | 2.2 | (0.5) | – | 1.7 |
Net cash/(debt) (pre-IFRS 16) | 16.4 | (14.3) | (0.5) | 0.8 | 2.4 |
Lease liabilities | (410.4) | 68.1 | (117.6) | (0.5) | (460.4) |
Total net debt | (394.0) | 53.8 | (118.1) | 0.3 | (458.0) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
23 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Administrative expenses | (0.1) | (0.2) |
Charge within labour costs and operating profit | (0.1) | (0.2) |
Defined benefit charge to the Consolidated Income Statement | (0.1) | (0.2) |
Defined contribution schemes | (3.6) | (3.1) |
Total charge to the Consolidated Income Statement | (3.7) | (3.3) |
237
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
19. POST-EMPLOYMENT BENEFIT OBLIGATIONS (CONTINUED)
Other comprehensive income
The components of the net defined benefit expense recognised in other comprehensive income are as follows:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Actuarial gains due to liability financial assumption changes | 0.4 | 5.1 |
Experience adjustment | (0.5) | (0.5) |
Loss on scheme assets greater than discount rate | (1.0) | (4.3) |
Actuarial gains due to demographic changes | 0.2 | – |
Actuarial (loss)/gain recognised in other comprehensive income | (0.9) | 0.3 |
Balance Sheet valuation
The net defined benefit pension amount recognised in the Consolidated Balance Sheet is analysed as follows::
28 April 2024 | 30 April 2023 | |
£m | £m | |
Diversified growth funds | 9.6 | 9.6 |
Liability Driven Investment (LDI) | 3.4 | 4.4 |
Cash | 0.2 | (0.2) |
Fair value of scheme assets | 13.2 | 13.8 |
Present value of benefit obligations | (13.4) | (13.7) |
Net pension (liability)/asset | (0.2) | 0.1 |
Scheme obligations
Changes in the present value of defined benefit pension obligations are analysed as follows:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Opening defined benefit obligation | (13.7) | (18.5) |
Interest cost | (0.6) | (0.6) |
Actuarial gains on defined benefit obligation | 0.1 | 4.7 |
Benefits paid | 0.8 | 0.7 |
Closing defined benefit obligation | (13.4) | (13.7) |
Scheme assets
Changes in the fair value of scheme assets were as follows:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Opening scheme assets | 13.8 | 17.9 |
Expected return on scheme assets | 0.6 | 0.5 |
Actuarial losses on pension scheme assets | (1.0) | (4.4) |
Employer contributions | 0.7 | 0.7 |
Benefits paid | (0.8) | (0.7) |
Administrative expenses | (0.1) | (0.2) |
Closing scheme assets | 13.2 | 13.8 |
None of the pension arrangements directly invest in any of the Group’s own financial instruments nor any property occupied by, or other assets used by, the Group.
During the period, Schroders remain appointed as the Scheme investment manager with a mandate to invest 30% of the Scheme’s assets in Liability Driven
Investment (LDI) and 70% invested in a diversified growth fund. The LDI allocation is around three times leveraged and therefore targets around 100% interest rate
and inflation hedging of the Scheme’s liabilities.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
23 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
28 April 2024 | 30 April 2023 | |
Discount rate | 5.10% | 4.75% |
Rate of future inflation – RPI | 3.45% | 3.20% |
Rate of future inflation – CPI | 2.85% | 2.60% |
Rate of increase in pensions in payment | 3.20% | 3.15% |
Proportion of employees opting for a cash commutation | 100.0% | 100.0% |
28 April 2024 | 30 April 2023 | |||
| Pensioner | Non-pensioner | Pensioner | Non-pensioner | |
| aged 65 | aged 45 | aged 65 | aged 45 | |
| Life expectancy at age 65 (years): | ||||
Male | 21 | 22 | 21 | 23 |
Female | 24 | 25 | 23 | 25 |
28 April 2024 | 30 April 2023 | |
£m | £m | |
0.25% increase in discount rate | 0.4 | 0.6 |
0.25% decrease in discount rate | (0.4) | (0.6) |
0.25% increase in pension growth rate | (0.2) | (0.3) |
0.25% decrease in pension growth rate | 0.2 | 0.3 |
1 year increase in life expectancy | (0.4) | (0.4) |
1 year decrease in life expectancy | 0.4 | 0.4 |
23 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
| Foreign exchange | |||||||
Nominal value | Share capital | Share premium | Merger reserve | Other reserves | reserve | ||
£ | Shares | £m | £m | £m | £m | £m | |
As at 1 May 2023 | 0.0125 | 239,570,297 | 3.0 | 147.1 | (2.2) | (18.4) | 2.8 |
Other comprehensive income, net of tax | – | – | – | – | – | – | 1.6 |
Purchase of own shares | – | – | – | – | – | (7.2) | – |
Share-based payments | – | – | – | – | – | 2.2 | – |
As at 28 April 2024 | 0.0125 | 239,570,297 | 3.0 | 147.1 | (2.2) | (23.4) | 4.4 |
21. SHARE-BASED PAYMENTS
During the period to 28 April 2024, the Group operated five (2023: five) separate share-based payment schemes.
The Group has granted a number of different equity-based awards to employees which it has determined to be share-based payments as detailed below.
Long-Term Incentive Plan (LTIP)
The LTIP is a discretionary executive share plan under which the Board may grant options over shares in Watches of Switzerland Group PLC, subject to Adjusted
EPS and Return on Capital Employed (ROCE) performance conditions. The Group issues annual grants of awards with three-year performance periods. Grants
vest and become exercisable after three years and are awarded as nil-cost options. There are no cash settlement alternatives.
Details of the share options outstanding are as follows:
28 April 2024 | 30 April 2023 | |
Outstanding at 1 May 2023 | 1,866,662 | 1,958,038 |
Granted | 551,319 | 413,589 |
Exercised | (284,703) | (315,041) |
Forfeited | (39,440) | (189,924) |
Outstanding at 28 April 2024 | 2,093,838 | 1,866,662 |
Exercisable price | £nil | £nil |
Exercisable at 28 April 2024 | 988,471 | 606,454 |
Average fair value at grant | £5.08 | £4.37 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 4 0
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Deferred Bonus Plan (DBP)
The DBP is a discretionary bonus plan under which the Board may issue one-third of a bonus in the form of conditional share awards in Watches of Switzerland
Group PLC. The annual bonus is linked to annual earnings targets. Two-thirds of the bonus is settled in cash. The remaining third of the bonus is deferred as share
options and accounted for as an equity-settled share-based payment. These deferred shares are subject to a three-year vesting period with no additional performance
conditions except for continued employment. Deferred shares are awarded as nil-cost options.
Details of the share options outstanding are as follows:
28 April 2024 | 30 April 2023 | |
Outstanding at 1 May 2023 | 378,607 | 247,455 |
Change in FY22 number of shares granted* | – | 53,611 |
Change in FY23 number of shares granted* | 9,440 | – |
Granted | – | 106,056 |
Exercised | (7,552) | (20,872) |
Forfeited | (7,609) | (7,643) |
Outstanding at 28 April 2024 | 372,886 | 378,607 |
Exercisable price | £nil | £nil |
Exercisable at 28 April 2024 | 15,485 | 12,863 |
Average fair value at grant | £8.02 | £8.24 |
* The share price at which the number of shares granted under the DBP scheme is calculated is not confirmed until after the date of the approval of the Annual Report and Accounts. The maximum number of
DBP shares granted during the period is therefore estimated using the year-end closing share price and trued up at the date of grant.
Save As You Earn (SAYE) (UK)/Employee Stock Purchase Plan (ESPP) (US)
The Company operated a SAYE scheme for UK and an ESPP scheme for US employees in the year. Options were granted at the prevailing market rate on 14
February 2022, less a discount of 15%, being exercisable after three years (UK employees) and two years (US employees) from the date of grant. The scheme
permits a maximum saving of £500 (or US equivalent at the time of invitation) per month out of taxed income. SAYE/ESPP options are accounted for as an equity-
settled award under IFRS 2.
The ESPP reached the end of its two year term in the year. Employees chose not to exercise their options as the market share price was below the option price,
and these have been disclosed as expired in the following table.
Details of the share options outstanding are as follows:
28 April 2024 | 30 April 2023 | |
Outstanding at 1 May 2023 | 367,259 | 480,636 |
Forfeited | (133,013) | (113,377) |
Expired (ESPP) | (31,697) | – |
Outstanding at 28 April 2024 | 202,549 | 367,259 |
Exercisable price | £nil | £nil |
Exercisable at 28 April 2024 | nil | nil |
Average fair value at grant | £10.80 | £10.80 |
FY22 Free share issue
During FY22 the Group issued 50 free shares to all colleagues who were employed by the Group on 15 December 2021. Employees must remain employed for a
period of three years to earn the shares. The UK shares are administered through a Share Incentive Plan. The US shares are issued under the LTIP and subject to
the Employee Benefit Trust. The Trust results are consolidated by the Group.
Details of the share options outstanding are as follows:
28 April 2024 | 30 April 2023 | |
Outstanding at 1 May 2023 | 92,700 | 112,050 |
Forfeited | (19,250) | (19,350) |
Outstanding at 28 April 2024 | 73,450 | 92,700 |
Exercisable price | £nil | £nil |
Exercisable at 28 April 2024 | nil | nil |
Average fair value at grant | £12.66 | £12.66 |
2 41
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
21. SHARE-BASED PAYMENTS (CONTINUED)
Former Chief Financial Officer Buy-out award (CFO)
Two buy-out share options were granted to the former CFO when joining the Group to replace those in place at his previous employment. The awards were
translated into Group shares at the share price on the date of joining. Performance conditions for one award were met in the prior year and the final option was
exercised in the period.
Details of the share option movements are as follows:
28 April 2024 | 30 April 2023 | |
Outstanding at 1 May 2023 | 1,722 | 38,835 |
Exercised | (1,722) | (1,721) |
Lapsed | – | (35,392) |
Outstanding at 28 April 2024 | – | 1,722 |
Exercisable price | £nil | £nil |
Exercisable at 28 April 2024 | nil | nil |
Average fair value at grant | £14.20 | £14.20 |
Charged to the Consolidated Income Statement
The amounts recognised in the Consolidated Income Statement within administrative expenses (excluding employer’s national insurance) in relation to these
schemes were as follows:
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
LTIP | 0.5 | 1.9 |
DBP | 0.8 | 0.7 |
Former CFO | – | (0.1) |
SAYE/ESPP | 0.6 | 0.7 |
Free shares | 0.2 | 0.3 |
2.1 | 3.5 |
Fair value of share schemes
The fair value of equity-settled share options and share awards granted is estimated at the date of grant using share option valuation models. The schemes are valued
using the Black-Scholes model. The target for the DBP was not met in the year ended 28 April 2024 and no additional options will be granted under this scheme.
The following tables list the inputs to the models for options and share-based payment costs during the year:
LTIP | DBP | SAYE/ESPP | CFO | ||||||
28 Apr 2024 | 30 Apr 2023 | 1 May 2022 | 2 May 2021 | 30 Apr 2023 | 1 May 2022 | 2 May 2021 | 1 May 2022 | 1 May 2022 | |
Share price (£) | £4.89/£6.70 | £7.51 | £9.42 | £3.20 | £7.56 | £7.51 | £9.42 | £10.80 | £14.20 |
Exercise price (£) | nil | nil | nil | nil | nil | nil | nil | nil | nil |
Dividend yield (%) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (%) | 4.39% | 3.72% | 0.61% | 0.57% | 3.71% | 0.66% | 0.57% | 0.05% | 0.41% |
| Expected life of share | 3 yrs | 3 yrs | 3 yrs | 3 yrs | 4 yrs | 4 yrs | 4 yrs | UK 3 yrs | 2 yrs |
| option | US 2 yrs |
The LTIP awards granted during the financial year ended 28 April 2024 were made with reference to a share price of £4.89, being the closing share price on
20 October 2023. The awards for Brian Duffy and Anders Romberg were made at a later date with reference to a share price of £6.70, being the closing share
price on 8 December 2023.
The Group did not enter into any share-based payment transactions with parties other than employees during the current period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 4 2
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
28 April 2024 | 30 April 2023 | |
£m | £m | |
| FINANCIAL ASSETS – HELD AT AMORTISED COST | ||
Trade and other receivables * | 17.4 | 13.9 |
Cash and cash equivalents | 115.7 | 136.4 |
Total financial assets | 133.1 | 150.3 |
| FINANCIAL LIABILITIES – HELD AT AMORTISED COST | ||
| Interest-bearing loans and borrowings: | ||
Term loan (net of capitalised transaction costs) | – | (120.0) |
Multicurrency revolving loan facility (net of capitalised transaction costs) | (113.3) | – |
Multicurrency revolving loan facility interest payable | (1.4) | – |
Trade and other payables ** | (188.4) | (193.8) |
(303.1) | (313.8) | |
Lease liability (IFRS 16) | (460.4) | (410.4) |
Total financial liabilities | (763.5) | (724.2) |
| 28 April 2024 | ||||
| Between one and | Greater than five | |||
| Less than one year | five years | years | Tot al | |
£m | £m | £m | £m | |
Multicurrency revolving loan facility | (1.4) | (113.3) | – | (114.7) |
Trade and other payables | (188.4) | – | – | (188.4) |
Lease liabilities (IFRS 16) | (78.7) | (287.2) | (214.4) | (580.3) |
Total | (268.5) | (400.5) | (214.4) | (883.4) |
| 30 April 2023 | ||||
| Between one and | Greater than five | |||
| Less than one year | five years | years | Tot al | |
£m | £m | £m | £m | |
Term loan | (2.9) | (120.0) | – | (122.9) |
Trade and other payables | (192.9) | (0.9) | – | (193.8) |
Lease liabilities (IFRS 16) | (63.1) | (248.4) | (192.4) | (503.9) |
Total | (258.9) | (369.3) | (192.4) | (820.6) |
2 4 3
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
22. FINANCIAL INSTRUMENTS (CONTINUED)
| 52 week period | 52 week period | |
| ended | ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Interest rate increase of 0.5% | (0.6) | (0.6) |
Interest rate decrease of 0.5% | 0.6 | 0.6 |
28 April 2024 | 30 April 2023 | |
£m | £m | |
Not past due | 9.3 | 5.7 |
Less than one month past due | 0.2 | 0.5 |
One to two months past due | 0.1 | 0.2 |
More than two months past due | 0.5 | 0.2 |
Total | 10.1 | 6.6 |
| 28 April 2024 | ||||
Sterling | US Dollar | Other | To ta l | |
£m | £m | £m | £m | |
| FINANCIAL ASSETS | ||||
Trade and other receivables | 10.6 | 6.8 | – | 17.4 |
Cash and cash equivalents | 77.3 | 37.4 | 1.0 | 115.7 |
Total financial assets | 87.9 | 44.2 | 1.0 | 133.1 |
| FINANCIAL LIABILITIES | ||||
Multicurrency revolving loan facility | (113.3) | – | – | (113.3) |
Trade and other payables | (113.9) | (72.8) | (3.1) | (189.8) |
Lease liabilities | (299.7) | (152.9) | (7.8) | (460.4) |
Total financial liabilities | (526.9) | (225.7) | (10.9) | (763.5) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 4 4
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
| 30 April 2023 | ||||
Sterling | US Dollar | Other | To ta l | |
£m | £m | £m | £m | |
| FINANCIAL ASSETS | ||||
Trade and other receivables | 7.4 | 6.3 | 0.2 | 13.9 |
Cash and cash equivalents | 91.2 | 44.0 | 1.2 | 136.4 |
Total financial assets | 98.6 | 50.3 | 1.4 | 150.3 |
| FINANCIAL LIABILITIES | ||||
Term loan | (120.0) | – | – | (120.0) |
Trade and other payables | (108.7) | (84.6) | (0.5) | (193.8) |
Lease liabilities | (258.2) | (138.6) | (13.6) | (410.4) |
Total financial liabilities | (486.9) | (223.2) | (14.1) | (724.2) |
| Effect on profit after tax | Effect on profit after tax | ||
| 52 week period ended | 52 week period ended | ||
| (Increase)/decrease | 28 April 2024 | 30 April 2023 | |
| in rate | £m | £m | |
US Dollar | (5%) | (2.3) | (2.3) |
US Dollar | 5% | 2.5 | 2.5 |
| 52 week period ended | 52 week period ended | |
| 28 April 2024 | 30 April 2023 | |
£m | £m | |
Short-term employment benefits | 0.9 | 1.7 |
Share-based payments | 0.6 | 1.1 |
Total | 1.5 | 2.8 |
2 4 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
24. BUSINESS COMBINATIONS
Ernest Jones Limited and Signet Trading Limited
On 17 November 2023, the Group acquired the trade and assets of 15 showrooms from retailers’ Ernest Jones Limited and Signet Trading Limited for a cash
consideration of £44.2 million. The acquisition further advances the Group’s expansion strategy.
The business contributed revenue of £8.2 million from the 17 November 2023 acquisition date to 28 April 2024. The profit before tax contribution was not material
to the Group result in this initial start-up period.
The following table summarises the consideration paid for the acquisition, and the provisional fair value of assets acquired at the acquisition date:
| £m | |
Total cash consideration | 44.2 |
| Initial assessment of values on acquisition | |
Inventories | 25.3 |
Fixed assets | 5.8 |
Right-of-use asset | 14.5 |
Lease liabilities | (18.5) |
Deferred tax asset | 1.1 |
Total identifiable net assets | 28.2 |
Goodwill | 16.0 |
Total assets acquired | 44.2 |
An amount of £1.0 million is held with a third party on retention, and is reported within debtors in these accounts. This will be paid by the Group within 12 months
of the acquisition date.
The goodwill recognised is attributable to the profitability of the acquired showrooms and is expected to be deductible for tax purposes.
The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acquisition. The right-of-use assets were
measured at an amount equal to the lease liabilities, with an adjustment required to reflect the terms of the lease relative to market terms.
If the business combination had taken place at the beginning of FY24, the Group’s revenue would have been £1,559.9 million. The contribution to profit before tax
is not material to the results of the Group and therefore has not been disclosed separately.
Acquisition-related costs have been charged to exceptional items in the Consolidated Income Statement for the 52-week period ended 28 April 2024, as disclosed
in note 4 to these Consolidated Financial Statements.
The values stated above are the initial assessment of the fair values of assets and liabilities on acquisition. These will be finalised within 12 months of the
acquisition date.
Acquisitions completed in the 52-week period to 30 April 2023
On 22 June 2022, in the prior financial year, the Group acquired the trade and assets of one showroom in the US from Bernie Robbins Jewelers, Inc. (‘Bernie
Robbins’). The acquisition formed part of the US growth strategy.
| £m | |
Total cash consideration | 21.2 |
| Final assessment of values on acquisition | |
Inventories | 3.1 |
Trade and other payables | (0.1) |
Right-of-use assets | 1.9 |
Lease liabilities | (1.9) |
Total identifiable net assets | 3.0 |
Goodwill | 18.2 |
Total assets acquired | 21.2 |
In the prior 52-week period ended 30 April 2023, the contribution to revenue and profit before tax, if the business combination had occurred on the first day of
that prior period, and since the acquisition date, was not material to the results of the Group and therefore was not disclosed separately.
During the 52-week period to 28 April 2024, the fair value assessment of the above entity was completed, and no adjustments were made to the previously
reported position. Consideration of £0.7 million held on retention at the end of the prior period has been settled in the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 4 6
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
26. POST-BALANCE SHEET EVENTS
Closure of European Division
In line with our disciplined approach to capital allocation and given the pipeline of high returning opportunities in the UK and US, the Group intends to reallocate
investment from the European market into these higher returning regions. We are in negotiations with our brand partners for the transfer of a number of our
existing European mono-brand boutiques. The announcement took place post year-end, and for this reason assets have not been reclassified as held-for-sale as at
28 April 2024.
Acquisition of Roberto Coin Inc.
On 8 May 2024, the Group signed and completed the acquisition of the entire share capital of Roberto Coin Inc., an associate company of Roberto Coin S.p.A. from
Roberto Coin S.p.A., Peter Webster, Co-Founder and President of Roberto Coin Inc., and Pilar Coin. The acquisition completed for a total cash consideration of
$130.0 million (of which $10.0 million is deferred for one year and contingent on the future profitability of the acquired business), subject to working capital adjustments.
The acquisition was financed via a new $115.0 million term loan facility, which expires in February 2026. Covenants are identical to the Group’s existing multicurrency
revolving loan facility.
Luxury branded jewellery is a core pillar of the Group’s growth strategy and the acquisition will significantly enhance our strategic positioning in the luxury branded
jewellery category in the US, the world’s largest luxury jewellery market on a per capita basis.
The assets and liabilities acquired principally comprise working capital balances of inventory, debtors and creditors. Due to the proximity of the acquisition date to
the date of approval of these Consolidated Financial Statements, the initial accounting for the business combination is incomplete and the Group is unable to provide
a quantification of the fair values of the assets and liabilities acquired. The Group will include an acquisition balance sheet within the Group’s Interim Financial
Statements for the 26 weeks to 27 October 2024.
No further post-balance sheet events have been identified.
2 4 7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Note
28 April 2024 30 April 2023
£m £m
FIXED ASSETS
Investments C2 471.9 471.9
CURRENT ASSETS
Debtors: amounts receivable within one year C3 0.3 1.4
Cash at bank and in hand – 0.4
0.3 1.8
CURRENT LIABILITIES
Creditors: amounts falling due within one year C4 – (0.8)
Net current assets 0.3
1.0
Net assets 472.2 472.9
EQUITY
Share capital C6 3.0 3.0
Share premium C6 147.1 147.1
Other reserves C6 (23.4) (18.4)
Retained earnings 345.5 341.2
Total equity 472.2 472.9
The Company’s profit after tax was £4.4 million (2023: £15.7 million). The profit in year is a result of a dividend received which allowed repayment of management
recharges from subsidiary entities, and enabled the purchase of own shares.
The Financial Statements were approved and authorised for issue by the Board and were signed on its behalf by
L A ROMBERG
CHIEF FINANCIAL OFFICER
Date: 26 June 2024
The notes on pages 250 to 253 form part of these Financial Statements.
Company number: 11838443
COMPANY BALANCE SHEET
AS AT 28 APRIL 2024
2 4 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Share capital Share premium Other reserves Retained earnings
Total equity
attributable to
owners
£m £m £m £m £m
Balance at 1 May 2022 3.0 147.1 (6.7) 324.8 468.2
Profit for the financial period – – – 15.7 15.7
Purchase of own shares – – (14.5) – (14.5)
Share-based payments charge – – – 3.5 3.5
Share-based payments – – 2.8 (2.8) –
Balance at 30 April 2023 3.0 147.1 (18.4) 341.2 472.9
Profit for the financial period – – – 4.4 4.4
Purchase of own shares – – (7.2) – (7.2)
Share-based payments charge – – – 2.1 2.1
Share-based payments – – 2.2 (2.2) –
Balance at 28 April 2024 3.0 147.1 (23.4) 345.5 472.2
During the period the Company purchased £7.2 million of own shares to satisfy employee share incentive schemes. The shares were purchased by an Employee
Benefit Trust which has been set up for this purpose. The Company adopts a ‘look-through’ approach which, in substance, accounts for the Trust as an extension
of the Company. Own shares are recorded at cost and are deducted from equity. For further detail refer to note C6.
COMPANY STATEMENT OF CHANGES IN EQUITY
AS AT 28 APRIL 2024
2 4 9
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
C1. GENERAL INFORMATION
Watches of Switzerland Group PLC (the ‘Company’) is a public limited company, limited by shares, which is listed on the London Stock Exchange and incorporated and
domiciled in England and Wales. The registered number is 11838443 and the address of the registered office is Aurum House, 2 Elland Road, Braunstone, Leicester, LE3 1TT.
These Financial Statements present information about the Company as an individual undertaking and not about its Group. The Financial Statements of Watches of
Switzerland Group PLC have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, ‘The Financial
Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (FRS 102) and the Companies Act 2006. The Financial Statements are presented
in Pounds Sterling (£), which is the Group’s presentational currency, and are shown in £millions to one decimal place.
Accounting policies
The accounting policies set out in the notes below have been applied in preparing the Financial Statements for the 52-week period ended 28 April 2024 and the
comparative information presented in these Financial Statements for the 52-week period ended 30 April 2023.
The Company is included within the Consolidated Financial Statements of Watches of Switzerland Group PLC. The Consolidated Financial Statements of Watches
of Switzerland Group PLC are prepared in accordance with IFRS and are publicly available. In these Financial Statements, the Company is considered to be a
qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:
– Reconciliation of the number of shares outstanding from the beginning to end of the period
– The requirement to prepare a statement of cash flows
– Certain disclosures in relation to share-based payments
– Key Management Personnel compensation
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the Company is not presented as part of the Financial Statements.
The Company’s accounting policies are the same as those set out in note 1 of the Consolidated Financial Statements, except as noted below.
Investments
Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is applicable, the cost of the investment in a subsidiary
undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid.
Impairment
The carrying values of non-financial assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any impairment
loss arises, the asset is adjusted to its estimated recoverable amount and the difference is recognised in the Income Statement.
Trade and other debtors/creditors
Trade and other debtors are recognised initially at transaction price plus attributable transaction costs. Trade and other creditors are recognised initially at
transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less
any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business
terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.
Share-based payments
Some employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-settled transactions). The fair value of the equity-settled awards is calculated at grant date using a Black-Scholes model.
The resulting cost is charged in the Income Statement over the vesting period of the option or award and is regularly reviewed and adjusted for the expected and
actual number of options or awards vesting. This applies to LTIP Awards, Deferred Share Bonus Schemes, Save as You Earn and Employee Stock Purchase Plan
Awards, and Free Share Awards.
Service and non-service performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions
being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. No expense is recognised for awards that
do not ultimately vest because of non-market performance and/or service conditions that have not been met.
The social security contributions payable in connection with the grant of the share options is determined at each balance sheet date as a liability with the total cost
recognised in the Income Statement over the vesting period.
Own shares held
Own shares represent the shares of Watches of Switzerland Group PLC that are held in an Employee Benefit Trust which has been set up for this purpose. The
Company adopts a ‘look-through’ approach which, in substance, accounts for the Trust as an extension of the Company. Own shares are recorded at cost and are
deducted from equity.
Financial risk management
The Company’s financial risk is managed as part of the Group’s strategy and policies as discussed in note 22 of the Consolidated Financial Statements.
Company result for the period
In accordance with the exemption allowed by Section 408(3) of the Companies Act 2006, the Company has not presented its own Income Statement or Statement
of Comprehensive Income.
Directors’ remuneration and staff numbers
The Company has no employees other than the Directors, who did not receive any remuneration for their services directly from the Company in either the current
or preceding period. Refer to note 23 in the Group Financial Statements for Key Management Personnel compensation.
External Auditor’s remuneration
The remuneration paid to the External Auditor in relation to the audit of the Company is disclosed in note 5 of the Consolidated Financial Statements. The fees for
the audit of the Company’s Financial Statements are borne by a subsidiary of the Company and are not recharged.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
C2. FIXED ASSET INVESTMENTS
The Company had the following subsidiaries as at 28 April 2024:
Entity Principal activity
Country of
incorporation Registered office
Type of share held by
the Group
Proportion of
ordinary shares held
by Group companies
Jewel UK Midco Limited* Intermediate holding company England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Jewel UK Bidco Limited Intermediate holding company England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Watches of Switzerland Operations
Limited
Intermediate holding company England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Aurum Acquisitions Limited Intermediate holding company England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Watches of Switzerland Company
Limited
Retailer England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Mappin & Webb Limited Trading England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Goldsmiths Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
WoS Dormant 1 Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
WoS Dormant 2 Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Aurum Insurance (Guernsey)
Limited**
Captive insurance company Guernsey Heritage Hall, Le Marchant Street,
St Peter Port, Guernsey GY1 4JH
Ordinary 100%
Watches of Switzerland Limited Dormant England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary &
Redeemable preference
100%
Aurum Pension Trustees Limited Pension trustee company England and
Wales
Aurum House, 2 Elland Road, Braunstone,
Leicester LE3 1TT
Ordinary 100%
Watches of Switzerland Group USA
Inc
Holding company USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland (Nevada)
LLC
Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland (A/S) LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches of Switzerland LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Mayors Jewellers LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Mayors Jewellers Florida LLC Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
Watches 60 Greene Inc. Retailer USA 3340 NW 53rd Street, Suite 402,
Fort Lauderdale, Florida 33309
Ordinary 100%
WOSG (Ireland) Limited Retailer Ireland Suite 3, One Earlsfort Centre, Lower
Hatch Street, Dublin 2, D02 X288, Ireland
Ordinary 100%
Watches of Switzerland Group
(Denmark) Aps
Retailer Denmark Store Kongensgade 68, 1264 København
K, Denmark
Ordinary 100%
Watches of Switzerland Group
(Sweden) AB
Retailer Sweden Grey Advokatbyra AB Birger Jarlsgatan 14,
Stockholm, 114 34, Sweden
Ordinary 100%
Watches of Switzerland Group
(Netherlands) BV
Non-trading Netherlands Herikerbergweg 88, 1101CM, Amsterdam,
Netherlands
Ordinary 100%
Watches of Switzerland Group
(Norway) AS
Non-trading Norway Nydalsveien 28 0484, Oslo, Norway Ordinary 100%
WOSG (Germany) GmbH Non-trading Germany Maximiliansplatz 17, 80333, Munchen,
Germany
Ordinary 100%
* Investment in Jewel UK Midco is directly held. All other investments are indirectly held.
** Results of this company are fully taxable in the UK as a controlled foreign company.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
C2. FIXED ASSET INVESTMENTS (CONTINUED)
All subsidiary undertakings are included in the Consolidated Financial Statements. The proportion of the voting rights in the subsidiary undertakings held directly by
the Company do not differ from the proportion of ordinary shares held.
Investment in subsidiaries at the period end was as follows:
28 April 2024 30 April 2023
£m £m
Investment in subsidiaries 471.9 471.9
Investments in Company undertakings are recorded at cost, which is the fair value of the consideration paid.
C3. DEBTORS: AMOUNTS RECEIVABLE WITHIN ONE YEAR
28 April 2024 30 April 2023
£m £m
Amounts owed by Group undertakings 0.3 1.4
Amounts owed by Group undertakings are unsecured and repayable on demand.
C4. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
28 April 2024 30 April 2023
£m £m
Amounts owed to Group undertakings – (0.8)
Amounts owed to Group undertakings are unsecured and repayable on demand.
C5. FINANCIAL INSTRUMENTS
28 April 2024 30 April 2023
£m £m
FINANCIAL ASSETS – HELD AT AMORTISED COST
Amounts owed by Group undertakings 0.3 1.4
Cash at bank and in hand – 0.4
0.3 1.8
FINANCIAL LIABILITIES – HELD AT AMORTISED COST
Amounts owed to Group undertakings – (0.8)
NOTES TO THE COMPANY FINANCIAL STATEMENTS
continued
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
C6. EQUITY
Nominal value Share capital Share premium Other reserves
£ Shares £m £m £m
As at 1 May 2023 0.0125 239,570,297 3.0 147.1 (18.4)
Purchase of own shares – – – – (7.2)
Allocation of own shares – – – – 2.2
As at 28 April 2024 0.0125 239,570,297 3.0 147.1 (23.4)
Share capital
239,570,297 ordinary shares of £0.0125 nominal value.
Share premium account
This reserve represents the amount of proceeds received for shares in excess of their nominal value of £0.0125 per share.
Other reserves
During the period the Group purchased £7.2 million of own shares to satisfy employee share incentive schemes. The shares were purchased by an Employee Benefit
Trust which has been set up for this purpose. The Company adopts a ‘look-through’ approach which, in substance, accounts for the Trust as an extension of the
Company. Own shares are recorded at cost and are deducted from equity. At the year-end the Company held 3,119,758 (2023: 2,105,220) own shares.
C7. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemptions under FRS 102.33 ‘Related Party Transactions’ for wholly owned subsidiaries not to disclose intra-group
transactions.
C8. SHARE-BASED PAYMENTS
Details of the Company’s share-based payments are disclosed within note 21 in the Consolidated Financial Statements.
C9. CONTINGENT LIABILITIES
At the date of signing the accounts, the Company has provided cross guarantee arrangements to Barclays Bank PLC, BNP Paribas London Branch, Citibank N.A.
London Branch, Fifth Third Bank National Association, HSBC UK Bank PLC, Lloyds Bank PLC, National Westminster Bank PLC and Northern Bank Limited Trading
as Danske Bank in respect of the obligations of certain fellow subsidiary undertakings in relation to the £225.0 million multicurrency revolving loan facility.
C10. POST-BALANCE SHEET EVENTS
On 8 May 2024, the Group signed and completed the acquisition of the entire share capital of Roberto Coin Inc., an associate company of Roberto Coin S.p.A.
from Roberto Coin S.p.A., Peter Webster, Co-Founder and President of Roberto Coin Inc., and Pilar Coin. The acquisition was financed via a new $115.0m term
loan facility for which the Company has provided cross guarantee arrangements to Barclays Bank PLC and BNP Paribas London Branch in respect of the obligations
of certain fellow undertakings.
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STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
ALTERNATIVE PERFORMANCE MEASURES
The Directors use Alternative Performance Measures (APMs) as they believe
these measures provide additional useful information on the underlying
trends, performance and position of the Group. These measures are used for
performance analysis. The APMs are not defined by IFRS and therefore may not
be directly comparable with other companies’ APMs. These measures are not
intended to be a substitute for, or superior to, IFRS measures.
The majority of the Group’s APMs are on a pre-IFRS 16 basis. This aligns with the
management reporting used to inform business decisions, investment appraisals,
incentive schemes and banking covenants.
4-Wall EBITDA
Net margin less showroom costs.
Why used
4-Wall EBITDA is a direct measure of profitability of the showroom operations.
Reconciliation to IFRS measures
£million FY24 FY23
Revenue 1,537.9 1,542.8
Cost of inventory expensed (981.6) (972.2)
Other inc. supplier incentives 5.9 5.7
Net margin 562.2 576.3
Showroom costs (289.1) (279.2)
4-Wall EBITDA 273.1 297.1
Showroom costs includes rental costs on a pre-IFRS 16 basis (i.e. under IAS 17).
Refer to the IFRS 16 reconciliations below for further details.
4-Wall EBITDA, EBITDA, Adjusted EBITDA and Adjusted EBIT Margin
For each of these areas as defined above, the Group shows the measures as a
percentage of Group revenue.
Why used
Profitability as a percentage of Group revenue is shown to understand how
effectively the Group is managing its cost base.
Reconciliation to IFRS measures
£million FY24 FY23
Revenue 1,537.9 1,542.8
4-Wall EBITDA 273.1 297.1
17.8% 19.3%
EBITDA (Unadjusted) 187.8 213.0
12.2% 13.8%
Adjusted EBITDA 178.9 201.4
11.6% 13.1%
Adjusted EBIT 134.7 165.1
8.8% 10.7%
Adjusted Earnings Before Interest and Tax (Adjusted EBIT)
Operating profit before exceptional items and IFRS 16 impact.
Why used
Measure of profitability that excludes one-off exceptional costs and IFRS 16
adjustments to allow for comparability between years.
This measure was linked to management incentives in the financial year.
Reconciliation to IFRS measures
Reconciled in note 2 to the Consolidated Financial Statements.
Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation
(Adjusted EBITDA)
EBITDA before exceptional items presented in the Group’s Consolidated Income
Statement. Shown on a continuing basis and before the impact of IFRS 16.
Why used
Measure of profitability that excludes one-off exceptional items and IFRS 16
adjustments to provide comparability between years. This measure was linked
to management incentives in the financial year.
Reconciliation to IFRS measures
Reconciled within note 2 of the Consolidated Financial Statements.
Adjusted Earnings Per Share (Adjusted EPS)
Basic Earnings Per Share before exceptional items and IFRS 16 impact.
Why used
Measure of profitability that excludes one-off exceptional items and IFRS 16
adjustments to provide comparability between years. This measure was linked
to management incentives in the financial year.
Reconciliation to IFRS measures
Reconciled within note 9 of the Consolidated Financial Statements.
Adjusted profit before tax (Adjusted PBT)
Profit before tax before exceptional items and IFRS 16 impact.
Why used
Measure of profitability that excludes one-off exceptional items and IFRS 16
adjustments to provide comparability between years.
Reconciliation to IFRS measure
£million FY24 FY23
Segment profit (as reconciled in note 2 of the Financial
Statements)
134.7 165.1
Net finance costs excluding exceptional items (note 7) (26.6) (23.1)
IFRS 16 lease interest 20.8 17.2
Adjusted profit before tax 128.9 159.2
GLOSSARY
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
Average selling price (ASP)
Revenue (including sales related taxes) generated in a period from sales of a
product category divided by the total number of units of such products sold in
such period.
Why used
Measure of sales performance.
Reconciliation to IFRS measures
Not applicable.
Constant currency basis
Results for the period had the exchange rates remained constant from the
comparative period.
Why used
Measure of revenue growth that excludes the impact of foreign exchange.
Reconciliation
(£/US$ million)
FY24 Group revenue (£) 1,537.9
FY24 US revenue ($) 870.3
FY24 US revenue (£) @ FY24 exchange rate 691.8
FY24 US revenue (£) @ FY23 exchange rate 723.4
FY24 Group revenue (£) at constant currency 1,569.5
FY24 exchange rate £1: $1.258
FY23 exchange rate £1: $1.203
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)
EBITDA before exceptional items presented in the Group’s Consolidated
Income Statement. Shown on a continuing basis before the impact of IFRS 16
and showroom opening and closing costs. These costs include rent (pre-IFRS
16), rates, payroll and other costs associated with the opening or closing of
showrooms, or during closures when refurbishments are taking place.
Why used
Measure of profitability that excludes one-off exceptional and non-underlying
items, IFRS 16 adjustments and showroom opening and closing costs to allow
for comparability between years.
Reconciliation to IFRS measures
£million FY24 FY23
Adjusted EBITDA 178.9 201.4
Showroom opening and closing costs 8.9 11.6
EBITDA 187.8 213.0
Exceptional items
Items that in the judgement of the Directors need to be disclosed by virtue of
their size, nature or incidence, in order to draw the attention of the reader and
to show the underlying business performance of the Group.
Why used
Draws the attention of the reader and to show the items that are significant by
virtue of their size, nature or incidence.
Reconciliation to IFRS measures
Disclosed in note 4 of the Group’s Consolidated Financial Statements.
Free cash flow
Cash flow shown on a pre-IFRS 16 basis excluding expansionary capex,
acquisitions of subsidiaries, exceptional items, financing activities and the
purchase of own shares.
Why used
Represents the cash generated from operations including maintenance of
capital assets. Demonstrates the amount of available cash flow for discretionary
activities such as expansionary capex, dividends or acquisitions.
Reconciliation to IFRS measures
£million FY24 FY23
Net (decrease)/increase in cash and cash equivalents (21.5) 31.2
Net financing cash flow 91.7 85.2
Interest paid (9.2) (4.7)
Lease payments (68.1) (59.2)
Acquisitions 44.2 24.9
Exceptional costs – professional and legal expenses on
actual and prospective business acquisitions
2.5 0.9
Expansionary capex 78.0 67.5
Free cash flow 117.6 145.8
Free cash flow conversion
Free cash flow divided by Adjusted EBITDA.
Why used
Measurement of the Group’s ability to convert profit into free cash flow.
Reconciliation to IFRS measures
Free cash flow of £117.6 million divided by Adjusted EBITDA of £178.9 million
shown as a percentage.
2 5 5
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
Liquidity headroom
Liquidity headroom is unrestricted cash plus undrawn available facilities.
Why used
Liquidity headroom shows the amount of unrestricted funds available to the Group.
Reconciliation to IFRS measures
£million FY24 FY23
Total facility (RCF) 225.0 170.0
Facility drawn (115.0) (120.0)
Unrestricted cash (note 15) 99.3 121.6
Total headroom 209.3 171.6
Net cash/(debt)
Total borrowings (excluding capitalised transaction costs) less cash and cash
equivalents and excludes IFRS 16 lease liabilities.
Why used
Measures the Group’s indebtedness.
Reconciliation to IFRS measures
Reconciled in note 18 of the Consolidated Financial Statements.
Net margin
Revenue less inventory recognised as an expense, commissions paid to the
providers of interest-free credit and inventory provision movements.
Why used
Measures the profit made from the sale of inventory before showroom or
overhead costs.
Reconciliation to IFRS measures
Refer to 4-Wall EBITDA.
Return on Capital Employed (ROCE)
Return on Capital Employed (ROCE) is defined as Adjusted EBIT divided by
average capital employed, calculated on a Last Twelve Months (LTM) basis.
Average capital employed is total assets less current liabilities excluding IFRS 16
lease liabilities.
Why used
ROCE demonstrates the efficiency with which the Group utilises capital. This
measure was linked to management incentives in the financial year.
Reconciliation to IFRS measures
Adjusted EBIT of £134.7 million divided by the average capital employed, which
is calculated as follows:
£million FY24 FY23
Pre-IFRS 16 total assets 958.9 882.6
Pre-IFRS 16 current liabilities (229.7) (231.6)
Capital employed 729.2 651.0
Average capital employed 690.1 591.4
OTHER DEFINITIONS
Expansionary capital expenditure/capex
Expansionary capital expenditure relates to new showrooms, offices, relocations
or refurbishments greater than £250,000.
Luxury watches
Watches that have a Recommended Retail Price greater than £1,000.
Luxury jewellery
Jewellery that has a Recommended Retail Price greater than £500.
Showroom maintenance capital expenditure/capex
Capital expenditure which is not considered expansionary.
GLOSSARY
continued
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THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
IFRS 16 adjustments
The following tables reconcile from pre-IFRS 16 balances to statutory post-
IFRS16 balances.
FY24 Consolidated Income Statement
£million
Pre-IFRS 16
and exceptional
items
IFRS 16
adjustments
Exceptional
items Statutory
Revenue 1,537.9 – – 1,537.9
Net margin 562.2 – 1.7 563.9
Showroom costs (289.1) 64.9 – (224.2)
4-Wall EBITDA 273.1 64.9 1.7 339.7
Overheads (85.3) – (6.2) (91.5)
EBITDA 187.8 64.9 (4.5) 248.2
Showroom opening and
closing costs
(8.9) 5.3 – (3.6)
Adjusted EBITDA 178.9 70.2 (4.5) 244.6
Depreciation, amortisation,
loss on disposal, impairment
of fixed assets and lease
modifications
(44.2) (53.0) (27.4) (124.6)
Adjusted EBIT (Segment
profit)
134.7 17.2 (31.9) 120.0
Net finance costs (5.8) (20.8) (1.3) (27.9)
Adjusted profit before
tax
128.9 (3.6) (33.2) 92.1
Adjusted basic Earnings
Per Share
38.0p (1.2)p (11.8)p 25.0p
FY24 Balance Sheet
£million Pre-IFRS 16
IFRS 16
adjustments Post-IFRS 16
Goodwill and intangibles 215.7 – 215.7
Property, plant and equipment 193.1 (1.7) 191.4
IFRS 16 right-of-use assets – 381.8 381.8
Inventories 393.3 – 393.3
Trade and other receivables 36.2 (11.6) 24.6
Trade and other payables (263.3) 46.8 (216.5)
IFRS 16 lease liabilities – (460.4) (460.4)
Net cash 0.7 – 0.7
Other (29.2) 21.6 (7.6)
Net assets 546.5 (23.5) 523.0
FY23 Consolidated Income Statement
£million
Pre-IFRS 16
and exceptional
items
IFRS 16
adjustments
Exceptional
items Statutory
Revenue 1,542.8 – – 1,542.8
Net margin 576.3 – – 576.3
Showroom costs (279.2) 56.2 – (223.0)
4-Wall EBITDA 297.1 56.2 – 353.3
Overheads (84.1) – (0.9) (85.0)
EBITDA 213.0 56.2 (0.9) 268.3
Showroom opening and
closing costs
(11.6) 7.1 – (4.5)
Adjusted EBITDA 201.4 63.3 (0.9) 263.8
Depreciation, amortisation,
loss on disposal, impairment
of fixed assets and lease
modifications
(36.3) (49.6) 0.7 (85.2)
Adjusted EBIT (Segment
profit)
165.1 13.7 (0.2) 178.6
Net finance costs (5.9) (17.2) (0.7) (23.8)
Adjusted profit before
tax
159.2 (3.5) (0.9) 154.8
Adjusted basic Earnings
Per Share
52.7p (1.2)p (0.3)p 51.2p
FY23 Balance Sheet
£million Pre-IFRS 16
IFRS 16
adjustments Post-IFRS 16
Goodwill and intangibles 200.4 – 200.4
Property, plant and equipment 159.9 (5.5) 154.4
IFRS 16 right-of-use assets – 359.1 359.1
Inventories 356.0 – 356.0
Trade and other receivables 29.4 (9.6) 19.8
Trade and other payables (259.0) 39.4 (219.6)
IFRS 16 lease liabilities – (410.4) (410.4)
Net cash 16.4 – 16.4
Other (15.3) 8.5 (6.8)
Net assets 487.8 (18.5) 469.3
2 5 7
STRATEGIC REPORT | GOVERNANCE REPORT | FINANCIAL STATEMENTS
COMPANY
Watches of Switzerland Group PLC
Registered office address
Aurum House, 2 Elland Road, Braunstone, Leicester LE3 1TT
Registered in England and Wales
Company Number: 11838443
VAT number: 834 8634 04
ADVISERS
Independent Auditor
Ernst & Young LLP, 1 More London Place, London, SE1 2AF
Corporate solicitors
Slaughter and May, One Bunhill Row, London, EC1Y 8YY
Registrars
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
Joint brokers
Barclays Bank plc, 5 The North Colonnade, Canary Wharf, London, E14 4BB
HSBCBank plc, Level 2, 8 Canada Square, London E14 5HQ
Jefferies International Limited, 100 Bishopsgate, London, EC2N 4JL
Financial PR
Headland PR Consultancy LLP, Cannon Green, 27 Bush Lane, London,
EC4R 0AA
FINANCIAL CALENDAR
Trading update: 3 September 2024
AGM: 3 September 2024
H1 FY25 results: December 2024
Holiday trading update: January 2025
Financial year-end: April 2025
ANNUAL GENERAL MEETING
The AGM will be held at 2.30pm on Tuesday 3 September 2024 at our offices
at 36North Row, London, W1K 6DH. The Notice of Meeting which accompanies
this report and accounts sets out the business to be transacted.
SHAREHOLDING INFORMATION
Registrars
Please contact our Registrar Equiniti directly for all enquiries about your
shareholding. Visit their website shareview.co.uk for online information about
your shareholding. You will need your shareholder reference number which can
be found on your share certificate or telephone the Registrar direct on +44
(0)371 384 2577. The overseas shareholder helpline number is +44 (0)371 384
2577. Lines are open 8.30am to 5.30pm Monday to Friday.
For more information see thewosgroupplc.com/investors/shareholder-contacts.
FORWARD LOOKING STATEMENTS
Cautionary statement: The Annual Report and Accounts contains certain
forward looking statements with respect to the operations, performance and
financial conditions of the Group. By their nature, these statements involve
uncertainty since future events and circumstances can cause results and
developments to differ materially from those anticipated. The forward looking
statements reflect knowledge and information available at the date of preparation
of this Annual Report and Accounts and the Company undertakes no obligation
to update these forward looking statements. Nothing in this Annual Report and
Accounts should be construed as a profit forecast. Certain regulatory
performance data contained in this Annual Report and Accounts is subject to
regulatory audit.
TERMS USED IN THIS REPORT
The term ‘Group’ means Watches of Switzerland Group PLC (Company
registration number 11838443) and its subsidiaries.
ONLINE ANNUAL REPORT
Our Annual Report and Accounts is available online. View or download the full
Annual Report and Accounts from: thewosgroupplc.com/investors/results-
centre.
WARNING TO SHAREHOLDERS
Please be very wary of any unsolicited contact about your investments or offers
of free company reports. It may be from an overseas ‘broker’ who could sell you
worthless or high risk shares. If you deal with an unauthorised firm, you will not
be eligible to receive payment under the Financial Services Compensation
Scheme. Further information and a list of unauthorised firms that have targeted
UK investors is available from the Financial Conduct Authority at: fca.org.uk.
SHAREHOLDER INFORMATION FOR WATCHES
OF SWITZERLAND GROUP PLC
2 5 8
THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024THE WATCHES OF SWITZERLAND GROUP PLC ANNUAL REPORT AND ACCOUNTS 2024
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