Watches of Switzerland : Annual Report and Accounts 2023

A BUSINESS BUILT ON DELIVERING EXCELLENCE

ANNUAL REPORT AND ACCOUNTS 2023

CO NTE NT S

1 STR ATEGIC REPORT

02 At a Glance

1. Our Investment Case

1. Chair's Statement

1. Chief Executive Officer's Review

1. Market Review

1. Our Business Model

1. Our Brand Partnerships

1. Our Strategy

1. Our Strategy in Action

1. Key Performance Indicators

1. Financial Review

1. Non-financialInformation Statement
2. Section 172 Statement

1. Environmental, Social and Governance

1. Risk Management

1. Principal Risks and Uncertainties

1. Going Concern and Viability Statement

2	CORPOR ATE GOVERNANCE REPORT
126	Corporate Governance At a Glance
	128	Chair's Introduction
	130	Board of Directors
	132	Corporate Governance Statement
	144	Nomination Committee Report
	148	Audit & Risk Committee Report
	154	ESG Committee Report
	156	Remuneration Committee Report
	172	Directors' Report
3
FINANCIAL STATEMENTS
178	Independent Auditor's Report
	184	Consolidated Income Statement
	185	Consolidated Statement of Comprehensive Income
	186	Consolidated Balance Sheet
	187	Consolidated Statement of Changes in Equity
	188	Consolidated Statement of Cash Flows
	189	Notes to the Consolidated Financial Statements
	224	Company Balance Sheet
	225	Company Statement of Changes in Equity
	226	Notes to the Company Financial Statements
	230	Glossary
	233	Shareholder Information

A YEAR OF STRONG

PERFORMANCE AS WE ENTER FY24 SIGNIFICANTLY AHEAD OF THE LONG R ANGE PL AN

FY23 was another record year of revenue and profitability for the Group with luxury watch demand remaining strong and continuing to exceed supply.

We continue to execute on our strategy and Long Range Plan, with ongoing market share gains in both the UK and US. We made significant investment in our showrooms during the year, opening 21 new showrooms including five at Battersea Power Station, and the continued refurbishment of existing sites.

We are delighted to have launched our entry into the European

market with the opening of six mono-brand boutiques.

Our proven business model, international scale, impactful marketing

and dedication to client service underpin our confidence in

continued growth within a large, underdeveloped

and growing market.

OUR PURPOSE

To WOW our clients while caring for our colleagues, our communities and our planet.

OUR VALUES

WE EARN TRUST	WE TREAT EVERYONE	WE DO THE RIGHT
& CONFIDENCE	WITH RESPECT	THING, ALWAYS

WE CARE FOR OUR	WE PROTECT	WE ADVOCATE FOR
COMMUNITIES	OUR PLANET	OUR INDUSTRY

| GOVERNANCE REPORT |STRATEGIC REPORTFINANCIAL STATEMENTS

01 

AT A GL ANCE

ABOUT US

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.

OUR SHOWROOMS

THE WATCHES OF SWITZERLAND GROUP PLC  ANNUAL REPORT AND ACCOUNTS 2023

UK ONLINE	US ONLINE		TRAVEL RETAIL
	WELL-INVESTED SHOWROOM NETWORK
146	47	193	2,800+
SHOWROOMS IN THE UK AND	SHOWROOMS IN THE	TOTAL SHOWROOMS	NUMBER OF COLLEAGUES
EUROPE AT 30 APRIL 2023	US AT 30 APRIL 2023	AT 30 APRIL 2023	AT 30 APRIL 2023

02 

FINANCIAL HIGHLIGHTS

REVENUERETURN ON CAPITAL EMPLOYED1SALES BY CATEGORY

£1,543m	27.9%		FY23
					Other/Services
			7% 6%				Luxury watches2
CHANGE VS LY (AT CONSTANT						Luxury jewellery2
CURRENCY)1:		CHANGE VS LY:
+19%		+50bps			87%
ADJUSTED EBIT1		OPERATING PROFIT			SALES BY REGION
£165m		£179m		FY23				US
CHANGE VS LY:		CHANGE VS LY:			58%			UK and Europe
+27%	+26%	42%

SIGNIFICANT INCREASE IN SALES		INCREASE IN PROFITABILITY AND LEVERAGE

| GOVERNANCE REPORT |STRATEGIC REPORTFINANCIAL STATEMENTS

£m								1,543	£m
1,600	Growth in sales 238%		CAGR 19%		180
1,400							1,238		150
1,200
1,000					811	905			120
			774
800			687				90
	568
600	456							60
400
200									30
0	FY16	FY17	FY18	FY19	FY20	FY21	FY22	FY23	0

							165	12%
			Growth in				11%
		Adjusted EBIT		130		10%
			807%				9%
					78			8%
							7%
			45	56
	34	43				6%
18								5%
FY16	FY17	FY18	FY19	FY20	FY21	FY22	FY23	4%
Adjusted EBIT 1		Adjusted EBIT%

1. This is an Alternative Performance Measure. Refer to the Glossary on pages 230 to 232 for definition and reconciliation to statutory measures where relevant.
2. Please refer to the Glossary on pages 230 to 232 for a definition.

OUR BRAND PARTNERSHIPS

03