Watches of Switzerland Group PLC (LON:WOSG)

Investor Update

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Jul 8, 2021

Hello. Welcome to our presentation. Thank you for joining us. My name is Brian Duffy. I'm the CEO of the Wachita Switzerland Group. We've been a public company on the London Stock Exchange now for over 2 years, and I've had the pleasure of meeting many of our investors and potential investors and presenting our story. We're very pleased with the progress of our business and the engagement of our investors. Our investor community I've become more and more interested in our growth story beyond the current year guidance. Our presentation is to address this investor interest and talk to our expectation of market developments and the Watcherdorf Switzerland Group goals and ambitions through to fiscal year 'twenty six. Of course, the further out the time frame, the less precise and reliable are the projections. Additionally, whereas we would not Includes speculative or uncommitted projects in our market guidance, the goals that we present here will include speculative incremental investments of both new projects and acquisitions. This is our first in-depth look at a 5 year period, and our team have done a Fantastic job in pulling all of this together. I hope you enjoy the presentation and look forward to your questions. Looking at the agenda, I will present the development of our model, market information and the overall strategy and plans for future growth. We will then present key areas of expertise and group resource. Rhys Benford, Group Marketing Director and Katie Reeds, Vice President, Marketing U. S, will present our marketing plans and strategies Mark Isott, Group IT Director, will present our systems technology Ian Warwick, Group E Commerce Director, will present U. K. And U. S. Online Strategies. And then Craig Bolton, Executive Director, U. K. And David Hurley, Executive Vice President, U. S, will each present their divisions in more detail. Craig will also present our plans for the EU market. And finally, Anders Romberg, our CFO, will present our market projections and goals. I will then return for a summary and conclusion and Q and A session. The summary of our growth story is that our business is in strong growing markets. The luxury watch market is significantly supply driven with demand overall continuing to exceed supply. We have a fantastic portfolio of brand partners. Our business has great heritage and great expertise through the wonderful team of colleagues. Over the past 7 years, we've elevated and modernized our business through investment in contemporary welcoming stores, multichannel retail in response to changing consumer preferences, best in class systems technology, best in class marketing and through investing in our people. Our strategy is a proven success driving both market growth and market share gain for our group. We've enjoyed multifaceted growth through organic growth, new projects, international and acquisitions. Acquisitions, in fact, are the core of our U. S. Success. Our multifaceted growth model works, and today, we plan growth and expanded geographical markets. We see further growth in the U. K, accelerated growth in the U. S. And incremental growth from entering the EU market. The opportunities are there, however, the constraint on the pace of our growth will be product supply as it has been in the past. Taking all factors into account, we feel that today is an important point in our group's history, an inflection point, and more than ever, we think it's time to grow. The Wachitoff Switzerland Group comprises of 4 major retail fascia of Wachitoff Switzerland, U. K. And U. S, Goldsmith and Marpin and Webb in the U. K. And Meyers in Florida and Georgia, U. S. 4 great retail brands with high consumer awareness and loyalty and tremendous heritage. These retail brands have been around for many years. And then following the acquisition of the group by Apollo in 20 14. A new management approach led by myself as CEO and Anders as CFO set off on a transformation of our group. Our transformation with our management focus on strategic planning, analytics and results accountability, investing and upgrading and expanding the use of our SAP IT systems, investing in and elevating our U. K. Under invested stores network, beginning with our London flagships, working progressively more in partnership with our key branded suppliers, developing new modern multichannel formats of multi brand, online travel and monobrand stores increasing our impactful marketing activity, especially digital, particularly in recent years successfully entering the U. S. Market in 2018. And the result is a unique platform in the world of luxury watch retail. As I've said to many of you before I know, to understand our business, firstly understand what we sell, these world leading of our sales in fiscal year 'twenty one and then understand the uniqueness of how we sell and our competitive advantages of scale, technology, marketing and the excellent customer service provided by our great teams. And our results show the success of our strategy. 16.2% sales growth CAGR over 7 years, including our fiscal year 'twenty two guidance. Adjusted EBIT CAGR of 40.2% over the same period as we leverage the sales growth on our cost base. Our cash generation has been very good, reducing Our debt to $43,900,000 at end April this year with further reduction guided. And consequently, our return on capital employed has significantly improved to 19.7% in fiscal year 'twenty one. I have a great team, and a big part of our success has been the integration of talent with long service in our group and expertise in the specialist category with new talent as our group has expanded in size and profile. On this chart, those shown with green frames have been with the group for an average of 17 years, whereas those with brown frames joined our group at some time during our transformation period. Similarly, Craig's team in the U. K. Is a mixture of experienced and New Talent. In addition to direct reports, group functions of marketing, finance, merchandising, IT and HR are all part of Craig's team supporting the U. K. Business. Whereas David's team in the U. S, based in Florida, New York and Nevada, At all new to the group, those in green frames came from the Mayors of Wynne Acquisitions and have long industry experience. We have grown our people resource in anticipation of business growth. We have bench strength and succession plans in place. Looking at the global market for luxury watches, we estimate the global market size in 2019 at retail value of $47,000,000,000 Over many years, market growth has been through predominantly average selling price increases from both pricing and mix. The Watcher of Switzerland Group strategies and plans that you'll hear about today are for the Western markets of U. K, U. S. And EU, which is an addressable total market in 2019 of USD 21,000,000,000 We view the U. S. And EU markets as underinvested and underdeveloped. On a per capita basis, the U. K. Domestic market is the number 1 in the world. The luxury jewelry market is strong and well developed in both the U. S. And U. K. Markets. Turning back now to the global luxury watch market. We know that it is firstly 94 percent Swiss and very concentrated with the major independent brands of Rolex, Tudor, Patek Philippe, Audemars Piguet, Richard Mille and Breitling and then 3 major luxury groups of the Swatch Group with the leading brand of Omega Richemont Group with the leading brand of Cartier and the LVMH Group with the leading watch brand of Tag Heuer. Here, we show the top brands by ranking of global sales with Rolex as the very clear market leader, followed by Omega and Cartier. We celebrated our 100 year anniversary with Rolex in the U. K. In 2019, and we have represented Omega, Cartier and most of the brands listed for many, many decades. Luxury watches just keep getting better and the core functionalities of time accuracy, durability and Power Reserve and the use of new materials, both internally in the watch and externally and in response to consumer taste on bracelets, straps and Diodes. At the Watches of Switzerland Group, we have tracked product attributes on all Luxury watches for the past 7 years, which shows, for example, a concentration of men's case sizes in the 40 to 43 millimeter range with a clear men's preference for dark dials, shades of black, gray, blue and now green. Whereas for women's watches cases, size preference is 20 31 millimeter and our preference for light dials, white, silver and mother of pearl, particularly with gold. We track a total of 35 attributes. New products represent around 20% of brand sales annually and are a constant stimulant of consumer interest. How the watch brands responded to the challenges of the pandemic with exciting new programs presented remotely was very impressive. Our strategy for growth through fiscal year 'twenty six is focused on Western markets, U. K, U. S. And EU shown in the pie chart. For the luxury watch market as shown, this represents an addressable market of $21,000,000,000 with the EU being the largest, representing $14,000,000,000 In this slide, we look at the development of global luxury watch market by major countries and show that whereas the fastest growing markets in 2000 to 2010 decade were Hong Kong and France, both resulting from high Chinese tourist spend. But if we now look at the period 2010 to 2019, We can see the fastest growing market has been the U. K. At a CAGR of 8.9%. Indeed, if we look at the total 19 year period, The U. K. Market showed a CAGR of 5.6%, clearly the number one. We believe that a significant contribution to this market growth has been the level of investment in retail from the Wachitoff Switzerland Group and others in the U. K. Market. In this chart, we compare the U. K. To other Western markets on a per capita basis, looking at 2018, 'nineteen and 'twenty, clearly showing the U. K. Is the number one in all years. If we focus on 2019 and compare other markets to the U. K, We see Italy indexing at 78 France 69 Germany 59 Benelux 57 Spain 39 Nordics combined at 37 and the U. S. At 27. Our conviction is that the differential is down to retail investment, not consumer behavior, taste or affluence. This analysis underpins our Western markets' international growth plans. We must never overlook or forget our jewelry business. In fiscal year 'twenty one, luxury jewelry represented 7% of our sales. Jewellery is sold in our stores at Mapping and Webb, Goldsmiths and Mears. The above chart shows that both the U. K. And U. S. Markets on a per capita basis our leading global markets in precious jewelry significantly greater than the EU, with particular strong growth notable in the U. S. In 2020. Jewelry is a perfect complement to luxury watches, and our plan assumes continuing investment and growth for the jewelry category. Acquisitions are part of our growth plans. We have opportunities to grow our group through acquisition in both U. S. And EU. This chart is to describe our approach. Firstly, we would point out the success of acquiring and integrating Mayer's and Wynn in the U. S. And the 4 Fraser Hart stores last year in the U. K. Through these acquisitions, we gained great businesses and great people. To determine an offer price, we assess the existing business based on watch agencies, store awareness and reputation, client database and business assets of stores and stocks. We will then determine our EBITDA multiple and propose ideally asset acquisition free of financing. The financial justification of the deal to the Wachitel Switzerland Group will be based on the acquired business plus the added Wachitel Switzerland Group benefits of Scale, Brand Relations and Investment in Store Design and Development, Marketing and Systems Technology. We then look at project payback, return on capital employed. We look to maintain management and teams and integrate within our structures. Our priorities post acquisition are communicating with and getting to know our new colleagues and implementing our systems. We have a very important new program across our group of a major step up in customer experience. We've named this program GZENIA, which is an ancient Greek concept of hospitality. Our Exenia program will include the latest and best learnings from luxury retail, But importantly, we'll also include and take learnings from the world of luxury hospitality. We are using external consultants for Exenia and kick off the implementation in September of this year. As I have said, we will focus our growth plans in the U. K, U. S. And EU markets. In the U. K. And U. S, we see continued growth from store investment, marketing and Exenia program. And in the U. K, further gains from ecom travel and incremental business for monobrand expansion, some market opportunities and new developments. In the U. S, we see significant incremental growth potential from market opportunities, acquisitions, e comm, new developments and monobrands. In the EU, we will target growth through acquisitions, monobrands, new developments, market opportunities, travel and e com. Anders will put some numbers behind our growth ambitions in these geographies. We believe that we've come to an important point in the pathway of our group, an inflection point. Our model is refined and supported by all stakeholders, holders, and our ability to execute internationally is proven. It's time to grow. With confidence in an investment led advantage model, We will continue to grow in the U. K. We will enjoy accelerated growth in the U. S. And we will add incremental markets from entering the EU. Financially, we'll continue with strong cash conversion, positive investment returns. We have the support of our brand partners. We have the resources and the ambition to deliver on our plans. It's time to grow. I look forward to your questions and comments. And in the meantime, I'll hand over to Ruth Benford Executive Director of Marketing. Okay. So thank you, Brian. Over the next few minutes, I'm going to be taking you through the marketing strategy And plans for the U. K. And Katie will do the same for the U. S. Strong marketing is a real Key differentiator in this category. And our goal is to drive awareness of our brands and to ultimately Drive sales. However, across our group, we do have different priorities. Our U. K. Brands and Meyers have been around for many years and are well established. The priority is ensuring we keep the brands visible, vibrant and relevant for today's consumer. However, Watches of Switzerland only arrived in the U. S. Less than 3 years ago. And being the new kids on the block, It's about generating new brand awareness, more of which Katie will come on to later. Within the luxury watch category, consumers are influenced by several different factors: By the brands themselves, by the products, by the co op activity they see aligning the brand And the retail partner. And then also influenced by our own marketing activity. And to engage with the consumer and deliver our goal of brand awareness, we have several tools we apply, Whether that's digital, content, traditional media, client experiences or in store. Our marketing mix has changed significantly over the years of transformation. Overall, we have doubled our marketing spend as a percentage of sales from FY 'fifteen To FY 'twenty one. In FY 'fifteen, digital marketing represented 32% of our overall investment. Now in FY 2021, our investment in digital has grown to 78% of our overall spend. It is still important to invest in traditional co op marketing with our key brand partners alongside client events. However, with performance marketing being our key focus, we can dynamically measure a large proportion of our marketing spend More effectively. So let's take a look at performance marketing. Our performance marketing Paints are executed across a combination of digital channels, including search and shopping, YouTube, display And paid social media. With our strategy focused on reaching high intent luxury consumers, Underpinned with bold, impactful creative. Our approach to performance Marketing allows us to target relevant customers using our own online and store data Combined with Google AI driven machine learning technology, this gives us highly accurate data driven metrics And a true understanding of our multichannel return on investment. We analyze this information each week To make insightful decisions around additional investment to drive sales, both online and in stores. Based on the success of the performance marketing campaigns to date, we plan this to continue in the future. We will continue to invest in AI driven marketing across all digital channels To maintain and grow our market share, we will continue to test and evaluate new and emerging digital channels. What's the next YouTube? We will ensure we remain leading edge as new digital marketing strategies emerge. And we will continue to optimize our multichannel return on investment strategy to maximize our return. Ian will present the technology behind performance marketing in his e Commerce section. To complement our performance marketing campaigns, we also focus on social media to drive brand awareness And maximize reach among key target audiences. We currently have a U. K. Community Of 625,000 and a monthly reach of 46,000,000. Our key social media channels are Facebook and Instagram, which resonate well in the luxury Watch Market. We continually measure our social media performance underpinned by consistent AB testing, So we are able to learn, adapt and refine our approach. We are also mindful that we benefit from the brand's Own social media followers. Our top 8 watch brands alone having over 50,000,000 followers Globally across Facebook and Instagram. Over the next few years, We will also continue to increase our content output. Our editorial caliber Has grown from a single magazine into a multimedia platform. Due to the great relationships we have with our luxury brand partners, We can share exclusive watch news, product launches, interviews with leading figures in the industry And in-depth articles through a printed and digital annual magazine, caliber content on our websites, monthly newsletters And regular podcasts. The content creation also extends to clienteling guides, Which provide our retail colleagues with information on brand launches, curated collections and exclusives To enable for them to reach out 1 to 1 to their clients and make appointments. We will also continue to collaborate with our brand partners with Co op Marketing on a fifty-fifty investment basis. This activity generates a strong awareness and positive image association for the Watches of Switzerland Group With the world's leading luxury watch brands. It also has the tactical benefit of telling the audience Where to shop? Let's take a quick look at what we do with Rolex. For any partnership that last 100 years is incredible. Throughout the pandemic, we have had to be nimble and adaptable. We successfully launched by personal appointment, virtual client events and the virtual luxury boutique. Given the success to date of these programs, we will continue them into the future. I am now going to hand you over to Katie to take you through the marketing focus for the U. S. As Ruth mentioned, our U. S. Marketing strategy takes on a unique 2 pronged approach. Mayors based in Florida and Georgia has a long established history, Reinvigorating the mayor's core and introducing the brand to a wider contemporary audience through digital, social and experiential activations is pivotal for development. Brand awareness for the relatively new to market Watches of Switzerland includes emphasized PR and cultural collaborations to maximize marketing reach. Watches of Switzerland has invested in building a New York based marketing team with extensive luxury, hospitality and tech experience. We have leveraged brand co op partnerships and launched initiatives to co promote with brands like Luxury Sneaker Purveyor, Stadium Goods And media outlet, Hypebeast. The sneaker time exhibition drew crowds across industries and interests. Watches of Switzerland SoHo hosted rapper performer Nas for a private clientele in evening garnering over 30,000,000 media impressions. The SoHo location again served as host for a private event with rapper performer Curtis 50 Cent Jackson. Press and media From the evening delivered 108,000,000 impressions. Our team has aligned with key cultural events to maximize brand exposure across industries, Including dressing, Oscar winners, Trevon Free and Martin Desmond Rowe, as their appearance reached a broadcast audience of 5,100,000 viewers And the following press coverage reached over 1,000,000,000 media impressions for Watches of Switzerland. Introducing Mayors to Contemporary new audience by dressing Taraji Henson, host of the American Music Awards in MARE's exclusive jewelry collections and reaching an audience of over 6 700,000 viewers. MERS launched the first of its kind multi branded jewelry campaign designed to reflect the modern consumer And styled in a way reflective of the contemporary purchaser. The campaign was featured across the media landscape. The mayor's jewelry campaign came to life through Outdoor advertising, visual merchandising and in store across social media channels. Private client events for brands Rolex and Patek Philippe remain hallmarks of the Watches of Switzerland marketing strategy. This year, we hosted a series of client appointments at a private residence in Miami. This was the first for Rolex and the mayor's team in conducting events outside of the boutique. The Grand Seiko brand success Story continues from a pop up location in SoHo to a now permanent monobrand space in the neighborhood. We are launching our second timepiece with Grand Seiko through the Anytime, Anywhere campaign. We are the benefactors of the key learnings and the digital intelligence coming from the U. K. Group campaign Our team is now reverse engineering content to reflect the highest performing units and maximizing analytics on the audience engagement across search, Social, Display and YouTube. This summer, we will launch the Anytime, Anywhere multi branded timepiece campaign. The campaign is designed to create brand awareness and the watches featured will be underpinned by a sales conversion campaign run simultaneously. Anytime, Anywhere by Watches of Switzerland is a cinematic love letter to the modern collector. The first of its kind lifestyle and brand awareness campaign for the U. S. Market. 8 luxury timepiece brands, 8 changemakers At the pinnacle of their craft, captured in 8 different locations across the great American landscape to form the most extensive, multi branded timepiece campaign The industry has ever seen. The production was partly financed by our brand partners, and we believe that this is the 1st multi brand co op campaign in our industry. I'm now going to hand you back to Ruth to summarize. Thanks, Katie. So to summarize the key takeaways for marketing. We will continue with data driven performance marketing in the U. K. And U. S. To drive sales both online and in store. There will be continued focus on PR collaboration and high profile activity in the U. S. Increased co op activity with Rolex, Patek Philippe and other luxury watch brand partners. And we will execute the EU strategy with full marketing support, more of which you will hear from Craig Later. So thank you very much. I will now pass you over to Mark, our IT Director. Thanks, Ruth. Hello, everyone. Today, I will present A short overview of our systems technology. So here we see an outline of the principal IT systems helping run our business. We have been using SAP for over 20 years and as such have both the stable and experienced internal support team And proven support from an external SAP Platinum partner. All our core business solutions are built around a single SAP instance. And as you can see, our use of data spans master data management through e com, retail, analytics, finance and management reporting. Where appropriate, we also use Microsoft Development Tools, providing us great agility in areas like CRM and our own specialist point of sale system. Regarding omnichannel, with both stores and e com underpinned by our SAP technology stack, We have the ideal platform to deliver a progressive and stable omnichannel retail model. Many of you will recognize some of our omnichannel capabilities. These include in store endless aisle with web enabled and shared store and e commerce inventory. Our store sales team has access to digital content and copy from our websites within their CRM system, alongside the tailored guides Ruth outlined earlier, Giving that team fantastic clienteling autonomy. Further, we believe our client visit by appointment solution Together with customer to store video conferencing will be beneficial far into the future. So a quick summary of our international capabilities. Our strategy is to have a single global template supporting group wide IT requirements, something we have achieved consistently. This approach certainly helped us migrate all Mayers locations across to our systems in just 24 hours. Our POS, ecom and SAP is running on a single code base across the group with our e commerce stack robustly hosted on Google Cloud. Supporting our U. S. Acquisitions, we significantly enhanced our U. K. Systems template to support Multiple currency, tax, time zone and distribution centers and many other features besides. We have built a very scalable international platform that can easily support significant growth, and we have made great progress We're delivering multilingual system support in preparation for our European expansion. Supporting client experience, A few years ago, we started the transition away from fixed tilt points in retail. This whole initiative has been tremendously successful, providing quick and efficient transaction processing. Visit the store during a quiet time and you will see our sales colleagues With our project Xenia, extending the rollout of this very successful retail transformation. Regarding past investments and next steps, the pandemic restrictions have made some really good use of some of our great IT investments over the last years. We have upgraded cybersecurity and CRM, both critical to home working and our extended use of cloud based telephony keeps our contact centers Speaking to shoppers. We have also considerably grown our broadband speeds both across stores and offices, Something that has been transformative in terms of distance selling and video communications. Looking forward, Aside from the continual development of our e commerce and store systems, we will be reviewing the refactoring of key operational processes Within the group, to tune efficiencies and lay groundwork for the future upgrade to SAP S4HANA and Sales Cloud. The S4HANA project costs are included within our 5 year plans. So again, to summarize, We're an SAP shop with tailored state of the art technologies across both stores and offices. We met the challenges presented by the pandemic with mature CRM tools, Distance selling payment by link, web bookable store appointments, a luxury concierge team And secure and established work from home technologies. We have had tremendous success of quickly integrating our U. S. Acquisitions And our IT systems are being fully prepared for further U. S. Acquisitions and European expansion. Thank you for your interest. I will now pass you to Iain, our E Commerce Director. Thanks, Mark. I'm now going to take you through the focus for e commerce. E commerce sales grew 115% in FY 'twenty one With a 6 year CAGR of 33.6 percent, driven by an increase in digital marketing investment, Improved on-site user and customer experience, new luxury brand introductions and the transfer of sales online Due to COVID store closure period. Prior to FY 'twenty one, sales were increasing at a CAGR of 21.5%. During this period, we have transformed the online business from a greater mix of fashion, watches and jewelry in FY 'fifteen Through to a market leading mix, a relatively small percentage of the overall luxury watch market. In FY 'twenty one, We implemented our 1st large scale investment into multichannel digital marketing. And despite the differences in the U. K. And U. S. Market, We take the same multichannel marketing approach in both regions to leverage our digital presence, optimizing for both online and store sales. This ensures we capture people in market at the right time whilst reducing our digital rate waste. We do this by measuring MROAS or multichannel return on advertising spend. To understand how we measure MROAS, we need to understand the technologies we use. There have been 2 advancement in Google's technology, Which is shaping up the industry, and we have been part of this journey from the very start. The first being smart Bidding, which uses Google's machine learning technology to automate search bidding. The second being store sales direct or SSD for short, Which is a solution that links actual store sales data to online campaign activity. So let's look at how these two technologies work. The first advancement in Google's technology is called Smart Bidding. A while ago, bidding was simple, pick up keywords in Google search and specify a bid On the likelihood for that keyword to convert into a sale. Since that time, more signals have been added so marketers Could account for things like device type, time, weekday or location. Today's growing breadth of data creates even more So we use automated bidding, which is the best solution to efficiently account for all available signals And improved performance, allowing us to adjust our bidding strategy in real time based on the consumers' contextual relevance for every unique search. The second advancement in Google's technology is called Store Sales Direct, which allows us to directly track in store purchases Made as a result of our online marketing activity. When a logged in, Google user clicks on a search ad and visits a store Through geolocation services and other sources, we can track that customer's visit. Then once the customer has provided their details Following a purchase, we are able to upload this encrypted data into Google Ads to match their purchase data Back to our online marketing campaigns. This allows us to accurately measure the effectiveness of our online advertising Through to in store conversion, giving us a true multichannel return on our advertising spend. So to summarize, we are leveraging the group's online advantages in both the U. K. And U. S. To drive customers both online and into our stores through the use of cutting edge marketing technologies to optimize our return on investment. Our large scale marketing drives significant volume of transactions, which allows us to meet Google thresholds, giving us Access to in-depth analysis and accurate reporting and our accurate measurement of multichannel ROAS Provides us with the information we need to confidently invest more across our group by leveraging machine learning to optimize our sales potential. Thanks very much for your time. I'm now going to hand you over to Craig Bolton. So thank you, Iain, and hello, everyone. My objective in the next few minutes is to update you on the key initiatives we have here in the U. K. To deliver our 5 year plan. We have transformed our business in the U. K. In the past 7 years and now have a very strong market position in which to leverage our future growth. Our model is built on investment and is working, giving us a leading position in the U. K. We plan to repeat and accelerate our model in the future and are very well positioned for long term growth. The U. K. Luxury watch market is very well invested with consistent High quality luxury environments with balanced complementary distribution. Market share is held largely between the Watches Switzerland Group, independents and the National Groups, with smaller shares held by luxury department stores and brand owned boutiques. We have established a clear market leading position in the U. K. In Luxury Watches. All of our fascia contribute to this success, but it is the strength of the Watcher Switzerland Group working as one that has allowed us to gain and strengthen this position. Whilst much has been achieved, we're now at an inflection point, looking ahead and ready for the next step change in our growth plan. Our plan overall is to continue to leverage areas of the business with proven track record of success, largely based around same store elevation with network expansion mainly through the growth of our monobrand boutique division. E Commerce has seen amazing growth in recent years and will continue. Further development in our omnichannel capabilities will be a priority. Travel Retail, whilst impacted heavily by Brexit And the pandemic in the last 12 months is still a good channel for the future. We also have additional leverage areas such as Luxury Jewelry and after sales and services, which we intend to grow. All of our key drivers will be underpinned by investment in our people, including our key strategic customer experience initiative, Xenia, plus marketing and technology. Investment in our state remains an ongoing priority for us. One of the most exciting projects is the launch and elevation of the Goldsmiths business, and it is time to fully elevate the brand to a leading position in luxury. Focus will be on customer experience, Hospitality, events and after sales servicing, all in a truly luxurious environment. We will continue to grow and elevate our luxury jewelry offering via strong product development, training and enhanced visual merchandising. We have taken the best of what we see in our U. K. Brands in Watchers Switzerland and Mapping and Webb, but also our learnings from the rebranding of our Meyer stores in the U. S. Our first remodel stores will reopen in quarter 2 FY 'twenty two and will continue to roll out over the next 4 years. Whilst we execute on the elevation of Goldsmiths Luxury, we will continue to focus on elevating our estate within Watches Switzerland and Mackinan Webb. We have recently completed the major refurbishments of 2 of the X Fraser Heart stores with the reopening of Mackinaweb Kingston and Watsworth Switzerland Stratford. Wachter Switzerland Brent Cross will complete in quarter 2, and we are currently looking for the relocation and expansion for Mapping and Webb York. Further developments will continue throughout these 2 divisions focusing on brands and designs to enhance our appeal to the domestic client base, Building our business for continued long term stability. MONOBRAN store network expansion remains a key strategic objective. At the end of FY 'twenty one, our store numbers were 26 with a plan to further develop this category during the life of the plan. We will continue to grow market share via boutiques and enhance our partnerships overall with the key brands. The plan for future expansion is shaping up very well with a number of key locations identified and targeted. We do not foresee many new retail developments in the U. K. In the 5 year plan period, but there will be activity, and we will review each one. We have recently opened our flagship Watches Switzerland store in Broadgate and in June 2021 opened in the new development at Edinburgh St. James'. In this location, we positioned with 3 stores at Goldsmiths Luxury, 2 monobrand boutiques, 1 Amiga and 1 Brighton. We are currently working on a further significant new project in the Battersea Power Station development due to open in spring 2022. Here, we will open with a Watches Switzerland store led by Rolex and Cartier and other luxury brands to complement. We're also reviewing opportunities for monobrand boutiques in this location. Our relationships with landlords and status within the market continue to put us at the forefront of all new developments coming to market. Our online sites are our best market asset with over 34,000,000 visitors per year. We've enjoyed significant online success in recent years, not least in the recent COVID year. Whilst the platform is successful as a singular channel, Our focus remains on full omnichannel maturity. We will continue to focus on the key levers that have proven to be more successful, for example, Brand positioning and our bold, impactful multichannel marketing using all the benefits we enjoy from partners such as Google. We will also be focusing on new areas of attention, such as achieving a tone of voice, consistent with our brand culture as well as enhancing the user experience by a 360 CRM visibility resulted in greater conversion to sales. We also believe there's an opportunity to develop and build strong Luxury Jewelry online through the period of the plan. Travel Retail has been impacted significantly by COVID, resulting in a large drop in traffic, which will take time to recover. Added to the removal of duty free following Brexit, making buying at the airport less advantageous than previously, It is our expectation that travel will gradually return to 2019 levels by the end of 2023. And whilst we're not assuming a return to duty free shopping within our plan, the airport remains a strong shopping environment with a good customer demographic with Time to Shop. On this basis, we are confident of a return to reasonable levels of revenue in the medium term. We will continue to achieve growth and market share gains with Luxury Jewelry. Product development within our Goldsmiths Mackin Webb Rangers is a key focus area alongside building even stronger partnerships with the major luxury global brands. It is our intention to build this business in our luxury stores as well as develop an online house of brands where the very best jewelry brands can be represented and retailed. All our developments will be supported by a multichannel marketing program covering both digital and traditional coverage. Alongside our very strong retail credentials, we believe there is an attractive opportunity to grow, enhance and build market share in the aftersales category. There's no question considering the number of watches retailed in the U. K. That the need for better after sales facility in the future exists. It is not only a good retail channel, but adds real credibility to our group. We have already opened our National Watch Centre in Manchester I most recently expanded that space to allow for more capacity. It is our intention in the period of this plan to open further capacity in the south and also review opportunities in the Midlands. In summary, we have a highly motivated, committed and energized team. Our same store sales will continue to grow ahead of the market and as a result of the elevation and brand enhancements planned. Alongside the excellent network opportunities we have with new stores, particularly monobrand boutiques. Our brand partnerships are stronger than ever, and we will continue to nurture these relationships by delivering excellent retail environments, Expert training for our teams and strong multichannel marketing plans. Finally, we will continue to enhance our client relationships, delivering world class customer experience via Xenia, supported by technical advancements and clientele and capabilities. Thank you. I'm now going to hand over to David. Hello, everybody. I'm going to quickly bring you through the makeup of Luxury Watch distribution today in the United States, The initial success we've had, what we've left to do with what we've acquired and some of the opportunities as we see them for the Few years. The U. S. Is a very different market to the U. K. With no clear market leader. Market data is limited, And so we've used a number of Rolex agencies to show the market makeup. It's easy to forget that we've only been operating here for less than 4 years. In October of 2017, we acquired Meyers and followed it up 1 month later, taking over the retail of luxury watches in the Wynn Resort in Las Vegas. We retained all of the management teams and store staff in both Mayers and Wynn And I've expanded acquired facilities in Fort Lauderdale as our U. S. Corporate offices, providing support to all U. S. Operations of finance, IT, HR, L and D, watch services and repairs, marketing and retail operations. We then opened up our first stand alone store in November of 2018 here in Green Street in Soho what is one of the most competitive retail cities in the world for luxury goods, with a stunning store design, tastefully incorporating the industrial heritage of the Soho area. And we followed it up with a second flagship at Hudson Yards in the west of Manhattan in March of 2019 In a city where we started with 0 presence and customer base, we have the most prominent location in the Hudson Yards development. Both New York flagship stores are anchored by Rolex and Patek Philippe, and we applied everything we did in the U. K. To our U. S. Business, Leveraging our retail expertise and best in class systems, which we quickly integrated into our acquired businesses, Investing in store design and remodels, investing in our people and training, while creating innovative marketing and one of a kind experiences for our customers. Our new design for the MERS stores is luxurious, contemporary, open and inviting, and we changed the store in Merrick Park, Miami From this to this, resulting in a large immediate increase in traffic. In Lennox in Atlanta, we relocated the store within the mall I moved from this to this and in the process opening our first Audemars Piguet Monobrand boutique. In the Wynn Las Vegas, we again relocated the store to this location and again gained a significant increase in traffic. Our Wynn Resort flagship is anchored by Patek Philippe. So our U. S. Business has grown to just under $400,000,000 In FY 'twenty one and in our last reported quarter was up 95% versus FY 'nineteen. So a lot done, but a lot more to do. We've had huge success investing in remodels or relocations of the stores we've acquired, but we still have over 60% of our store network complete over the next few years. All stores are planned to be done by the end of FY 'twenty four. This year, we will open up fully redesigned flagship boutiques in Aventura, Miami. We have taken on an additional 2,000 square feet. I will also include our 1st Bulgari boutique. The complete renovation of our 3,000 square foot Rolex boutique in the Wynn Resort in Las Vegas It's now underway and is scheduled to reopen in October. We will also relocate our Mer store to a new position in Boca Raton, Florida this year. Working with our property consultants, we've reviewed all of the current distribution in the United States as well as working with key developers such as Simon, related and Forbes that we've already built strong relationships with. We're also responding to our brand partners where they communicate gaps and opportunities in their network. We believe there are still many opportunities within the existing market in the U. S. This year, we will be opening up Watches of Switzerland multi brand stores in 2 new markets: The American Dream Project in New Jersey and a new store in Cincinnati in Kenwood Town Center. Our first 8 mono brand stores opened up last year and have performed very well. We're also delighted with our team's ability to execute the design, build out, Recruitment and training in new states in what was a challenging time to expand and travel. We have referred a program of monobrand stores that we will open up this fiscal year. We are pleased with our relaunch of online this September. Our investment in digital marketing is helping to support the growth of our e commerce business, driving brand awareness and driving new guests to our boutiques. We have continued growth planned in the growing U. S. Online market. The U. S. Pre owned market is estimated to be about $2,000,000,000 It is well established and financially attractive. We acquired AnalogueShift in October of 2020. They have a great market reputation. We have almost completed a full rebranding of Analog Shift and a new design for a website will follow. And we will roll out analog shift to selected stores in our network. So in summary, we've had strong success in the U. S. Through acquisitions and new stores. We will continue to invest in the store estate. We have a strong scalable U. S. Team with new developments identified, And we've also identified potential opportunities to acquire. And now I'll pass you back to Craig. So thanks, David, and hello again. Our plans for development in the EU are at an early stage, We believe the opportunity to be very exciting and one way we can take our proven model and apply it to the markets with success. My intention at this point is to simply demonstrate our thinking and potential size of the opportunity. We plan to further update on this initiative in the future. We've completed various studies on the EU looking at comparisons to other markets we know as well as reviewing quality and quantity of retail in the various markets. As you can see in the chart, the EU spend per capita was ahead of the U. K. In the year 2000. And whilst the EU has remained largely stable, the U. K. Has hugely outperformed. The EU has similar characteristics to the U. S. And as we are now starting to prove, we can really impact the market with our model. Alongside the study on spend per capita, we have studied all major countries within the EU, Looking at strength and variety of luxury watch retailers, our find and show good markets, but largely underserved for luxury watches And in many cases, underinvested in by retailers. We believe this presents us with a very exciting opportunity to replicate our U. K. Strategy in these markets. We have laid out a plan for the next 5 years, looking primarily at new opportunities with focus initially on monobrand boutiques. This model of store is very transferable across the markets. Brands would be very supportive, and our skills in areas such as store development, Marketing and merchandising would really excel. Acquisitions will equally be a focus for us. And similar to acquisition of Meyers in the U. S, This would not only give us strong go and concern we can apply our model to, but also give us a base within the EU, allowing for a quicker and more sustainable growth in the markets across other channels. Overall, our plans are to commence our entry into the market in FY 'twenty two with the sales contribution to the group expected from FY 'twenty three. We will run 2 parallel streams, one looking at new project opportunities and the other reviewing acquisition opportunities. In time, we will also look to develop other channels such as e commerce, Travel Retail and New Developments. With the indicative plan we have laid out, we estimate that the AU revenue will represent 5% to 8% of the total group revenue by FY 'twenty six. Having only commenced this exciting project, we will have more detailed plans to update on in future presentations, but feel very optimistic about this opportunity. Thank you. I'm now going to hand over to Anders. Thank you, Craig. As you will have heard from the previous presenters, We are operating in a very strong category in which demand outstrips supply for some parts of our market. Over the past 7 years, we have seen pricing And mix being the main drivers of our growth, not necessarily volume. We have planned no change in our gross margin. The translation rate that we have used for the U. S. Dollar is $1.40 We have a very limited transactional exposure Since most of our purchases are made in local currency within the markets we trade, that is to say we're buying pounds in the U. K. And dollars in the U. S. We have not assumed any change to our borrowing rates in our plan. Our current facilities will expire in 2024 We're comfortable to operate at a leverage of about 1.5 to 2x. U. K. Is a very strong market for Luxury Watches with well invested retail stores. The sales stores. The total market value is approximately GBP 1,300,000,000 Over the past 7 years, the market It has grown by an average of about 10% annually. Most of this growth has come from an increase in average selling price, a combination of price increases And mix within the segment. Our view is that the historical trend of the market will continue. Calendar 2020 was Adversely impacted by the supply disruptions due to the shutdowns in Switzerland as well as the lockdowns here in the U. K. Through the planning period, we have assumed that the market will grow at a CAGR of about 8% to 10%. The reality is that this growth will not be linear, But we'll have some annual variations with the recovery taking place in 2021. We expect to outperform the market by around 2% per year Based on the strategy and plans that we have presented. The total U. S. Market luxury watch market size is around 4,500,000,000 U. S. Dollar with a historical CAGR of about 2% over the period 2012 through 2019. Recent years have seen a significant pickup in growth, and we believe that the U. S. Market will outpace the global luxury watch market through the planned period. We have enjoyed very positive growth in the U. S. And plan for a growth of about 25% to 30% per year throughout the planned period. Our initial refurbishment relocation have performed beyond our expectations. To date, we have refurbished or relocated 4 major stores and multi brand flagship in the Wynn Resort in Las Vegas. Payback on the capital programs have been very good, better than what we had planned. The consumer response has also been very positive. We plan to complete the refurbishment program by end of FY 'twenty four. We have, as you heard from Craig, completed an analysis of the European market, EU market. In some of the markets, have seen similar characteristics as we saw when we first analyzed the U. S. Market, with retail being underinvested and underdeveloped. We have identified a number of cities where we see opportunities. The most likely entry to these markets would be through either monobrands or through acquisitions. We think the EU will contribute between 5% 8% of our sales at the end of the planning period. The luxury jewelry market is larger than the luxury watch market. Both the U. K. And the U. S. Are very strong markets. Today, the category represents around 7% of our sales. We aim to grow our sales by between 3% 5% per annum Over the next 5 years, supported by our investments into our Goldsmiths Luxury concept and continued elevation of our Meyer stores. In addition, we also plan to invest behind mainly digital marketing to support the sales growth in store and online. Our business will be more geographically diversified at the end of the 5 year period. While we expect continued growth in the U. K, The business is expected to go from 67% in FY 'twenty one to 46% in FY 'twenty six. And our international business will go from 33% to 54%, with the U. S. Penetration increasing from 33% to 47% and the EU representing the balance. In terms of category growth, We plan for luxury watches to play an even bigger role since our organic growth is planned to come from predominantly luxury watch formats. At the end of the planning period, we expect this segment to represent around 90% of our business. We do not anticipate a significant recovery from international tourism spend here in the U. K, and we are focused on the domestic market. At the end of the period, 92% of our sales is expected to come from domestic customers, And this is compared to FY 'nineteen, pre pandemic and tax free tourist shopping in the U. K. When domestic represented around 68% of the group's business. Over the 5 year period, we plan to spend between £300,000,000 £340,000,000 of capital. Our historical return on capital invested has been very good, but we expect this to slow to around 3 years as The U. K. Is more mature, and part of our growth in the U. S. Will come from entering into new locations where we don't have an established customer base and need to establish our brand. In addition to this, we also plan to spend between €150,000,000 €200,000,000 on acquisitions over the period. This could obviously go up if further opportunities were to materialize, but this is what we have used in our plan. We do expect to further improve our operational leverage over the planning period. As we enter new markets and build our presence, we expect the profitability to be slightly below what we've seen in established locations. In the U. S, we see improved leverage as we invest behind our stores and drive productivity. We do expect this to continue. The productivity gains comes from better traffic, improved mix with higher average selling price and higher conversion on traffic. Our U. K. Business will benefit from channel mix with e com after normalization in this fiscal year, outperforming under expansion of our mono brand format. In addition to this, we will continue to refine our store network, closing underperforming stores. The geographical mix is another factor impacting our overall profitability. We do expect that our ROCE will improve over the plan. Expanded EBITDA, coupled with good capital management, is expected to deliver this. In summary, We have a proven model of success, which is clearly scalable. We are the market leader in the U. K, one of the best markets in the world, And we're gaining momentum in the U. S. Our plan is to further diversify by entering the EU, And we do expect complementary growth from jewelry and services. We expect further operational leverage over the plan And improved return on capital employed as we expand EBITDA with good asset management. We have a strong capital program with planned acquisitions that underpins our growth. Thank you. I will now hand off to Brian for some closing remarks. Thank you, Anders. We have an exciting business plan for the future. We also plan to further develop the support of our communities in the U. K. And the U. S. Through the Watches of Switzerland Group Foundation. We've assumed funding of our foundation through the planned period through fiscal year 'twenty six. As our group expands and develops, we're very conscious of our broader responsibilities in the areas of ESG. We've announced the introduction of our permanent Board Committee chaired by Rosa Moncton, MBE, to review and supervise our ESG programs, and we have assigned executive responsibilities. We have details of our ESG programs and targets in the annual report, and we plan to build on our commitments in these areas for the future. We believe in our markets, and we believe we've created a unique business model. We are proud of what we've achieved so far, and we're poised for growth, both in our home market in the U. K. And internationally. Restricted availability of product supply will drive the pace of our growth. We take nothing for granted. We know that execution and hard work from our dedicated teams will be the key to success. But what gets planned gets done, and we find this process stimulating and very helpful in reviewing our priorities and resources. We do have the best teams in the business, and I'd like to thank all involved in the preparation and presentation of this plan. And with that, we'll open to Q and A. Thank We'll take our first question from Carina Schueter with Goldman Sachs. Hi there, and thank you to the whole team for presenting. It's been really interesting. There's 3 questions from me, if you don't mind. So the first one is that you very helpfully provided the breakdown of CapEx and acquisition spend in your guidance. I was just wondering where do you see the biggest opportunity for consolidating Current market players, is that in the EU or the U. S? And following on from that question, When you think about acquisitions in the EU, are you prioritizing the Watches of Switzerland brand? Or do you think there's an Opportunity to acquire a regional payer and keep their branding like you did with Mayers in the U. S? And a final question in terms of geographic exposure in the EU. I know that you said during the presentation that you've done analysis of key markets. Are you really thinking of the opportunity across Europe? Or are there a few key markets that you want to focus on? Thanks, Carina. We're not specifically anticipating market Consolidation, I mean, that's for the brands to do, and it's been an ongoing process as bigger open So what I've opened, which is very much more in our favor than there has been naturally some consolidations Evident in the U. S, so I would see that, that would continue overall, but our CapEx and acquisition is a very adding incremental business to our model overall. Tremendous business to our model overall, and we do actually think that A lot of our investments and plans of how we do things really does add to the market overall. I think it's been an experience in the U. S. Rather than necessarily come at the expense of the Existing distribution? That's a good question. Would we look at branding everything Watches of Switzerland or maybe Some brands that in the same way that we've done with Mayers in Florida. It really would depend again on the circumstances. We're okay Managing kind of multi phase of business, we have it here in the U. K. We call Smith Barber and Web and then Watchlist Switzerland, and we have it in the U. S. We depend on the strategy for the particular acquisition. If we saw the opportunity of just emphasizing watches only, we would look to change to What we think is the best name in the business, Watches of Switzerland. If on the other hand, there was a really strong long term franchise and in particular, An interesting jewelry business that the chances are we would look to maintain the name and, like I said, manage it within our portfolio overall. It really just depends on the opportunity. We've been anticipating people saying to us what's the priority and the focus and all that in Europe. And The answer is that we don't really have a geographic priority. We've kind of laid out how we see the relative underdevelopment of the markets, which We presented, but we really are interested in markets by which we would say major conurbations, cities. One meaningful store can be financially viable to us and with the right kind of opportunity. So it's all a matter of where the opportunities come from, but we honestly see opportunity pretty much Right there, it's like the EU market, and we haven't defined kind of geographic preference or priority. Our next question comes from Guido Lucarelli From Exane BNP Paribas. Yes. Good evening. Thanks for the presentation and for taking my question. I have a couple, please. The first one regarding profitability because you mentioned Operating leverage and a lot of moving parts, also the dilution from When you acquire new stores, so I was wondering if you could help us to model forward The evolution of the adjusted EBITDA margin compared to the positive expansion that you had in the last Yes. I don't know if overall can be realistic to assume an adjusted EBITDA margin of 15% In FY 'twenty six, and yes, any color more on the impact of the acquisition because From one side, I can understand the dilution of entering a new market, but also the model seems quite scalable. So I don't know what is The greater impact there. The second one related to margins as well on the marketing spend. If I'm not wrong, I understood that on marketing, I understood that the percentage on sales They doubled from FY2015. So I was wondering if you could share at which level Are we now? And if there you can expect then some leverage or if we should continue to model these At this level going forward. And the final one on the U. S. Market Compared to the 25%, 30% sales CAGR that you see there, what is your So I'm sure now the underlying market growth and how do you see yourself in terms of market share At the end of the plan of FY 'twenty six, I mean, if it do you expect to get to have Dominant position as in the U. K. Or given that there are other players also evolving there, If it can be a more balanced mix between maybe a few big players going forward. Thank you. So good deal. Thank you for your question. So in terms of we haven't specifically guided on operational leverage. We can point to our history where we obviously gained about a Point per year historically, including this last year, even though we clearly state that we've lost about SEK 100,000,000 of sales, All the we benefited from the 53rd week of about 20, so 80 net. And part of that Operational leverage that we saw come through in the last fiscal year was the benefit of the rates. So when we look at our guidance for this coming year, Obviously, we guided flat to plus 0, 2.5. Essentially, if you take the rates The benefit in 'twenty one out, it's actually a leverage of 1% to 1.5% when you do the math on it. So we do expect this year to be a good year in that sense from a performance point of view. So Well, that is something that we feel comfortable commonly on going in the out years. We are entering into more new territories where it takes a bit longer to build up The business, both in the U. S, where we're geographically expanding outside established markets like Florida and now New York In Vegas, so that we do expect to have a little bit longer payback on our capital programs, as we stated. So whether or not we will enjoy 1% going forward, I wouldn't necessarily use that for a modeling purpose, I think, but I obviously would leave that up to you. Acquisitions, as you know, we've specified what we plan to stand on our acquisitions. It's in the public domain. So you all know what We used when we acquired Meyers as a business, and maybe that multiple has gone up somewhat with improved market conditions that are out there. But so if you use 10 as a multiple, then you can derive what that translates to in sales very easily. So if you want to Use the acquisition capital to drive sales, I think, is a good way to do it. And we as I said, we don't specifically want Guide on operational leverage for obvious reasons. So you had a question on product margin as well, right? U. S. Margin, yes. So the U. S. Margin, obviously, if you looked at the details of our disclosure in the R and S, you will see that We had a significant improvement in our U. S. Profitability this year. And obviously, our sales grew by 38.5% local currency, Which demonstrates what we said all along. If we can get the productivity going in the U. S, there should be some operational gearing coming out of that market Because the intake margin is slightly ahead of the U. K. So as long as we can drive that productivity going forward and the mix Within the portfolio goes in the U. S. Direction, then you would expect that to be beneficial. I think your Last question was about our market share. And we've deliberately or specifically not included market share data because It's not reliable, honestly, particularly in the U. S. Our estimate of the market, we included it at the GBP 4,500,000,000 And you know the size of our sales there at the moment, so you can pretty accurately estimate Our market share, at the end, even a lower 25% to 30% will clearly outperform the market quite significantly. It doesn't get us anywhere close to the kind of market share we've got in the U. K. But again, I think we could model that. We do think the U. S. As a market will outperform and doing that currently, and I think there's more of a consensus Our conviction that the market's got real significant growth potential and has been repressed in many ways because of the lack of investment in retail Historically. But all of this is dependent upon getting brand support, brand supply and everything else that has to come. So clearly, we'll gain market share if we achieve the plan that we're looking at here, but still significantly below the sort of share that we have in the UK. And sorry, on the margins, if you could Comment on the marketing spend as well. I don't know if I got it right and it's double as a percentage of sales Compared to FY 'fifteen, I was wondering if you could disclose which level is that And going forward, if it should be stable or increase or if there is some leverage there? I think going forward, it will be stable. We have invested in marketing, and it's given us great returns. And we Can measure clearly our awareness. And in the case of digital marketing, as we presented in the presentation, we can test it And get evidence of the value of our spend all the way through to traffic generation and conversion. So but the level we're at, I would say, is likely to be sort of stable through the plan. We have definitely, as we've said, increased. We haven't disclosed the percentage, But we've doubled the percentage from FY 'fifteen. We are retailers, though. We're not Managing brand awareness and brand and production in a way that supplier brands that we have would be doing. So the percentages are accordingly much If you make that comparison, but we obviously believe in what we're doing in marketing, and we can measure the benefit of it. But where we're at the moment, we've assumed we've pretty much be the level that being maintained through the planned period. Thanks a lot. Sure. Thank you. We'll now take our next question from Erwan Rambourg with HSBC. Yes. Thanks a lot for the great presentation. Two questions. 1, Maybe a bit naive, but I think, Brian and Anders, you've been repeating that your business is essentially driven by supply. What's the visibility On the plan horizon over the next 5 years that you could get supply going a bit higher, Is there any visibility on that? And then secondly, quite pragmatically, secondhand seems to be getting bigger. I've seen a few Studies pointing to secondhand, essentially representing half of the market of new watches being sold. I'm wondering how you could get more skin in that game, how much it can And aside from analog shift, would you be willing to make other investments To increase your presence in that market. On supply, we don't have Visibility, specifically beyond the current year and what we've tried to be clear and pointing out in the RNS and the presentation is that We're using our best judgment. You look at our history, look at the support that we've been given for the investments that we've made and the growth that that's resulted in which, of course, has come from supply. So we have no reason to believe that, that same formula and experience We won't continue through the plan and not effectively to our assumption. You would never get anything in the form of any kind of Commitment or even indication on supply from our major supply partners. So we don't think it will be Necessarily any better. We think the rules and the experience that we've had over the last several years I'm likely to continue through the planned period that we're looking at. On the certified pre owned business, One health warning I would say on it is it tends to be continually overstated in our view because you have the same product Appearing in a variety of different places, but it's all getting added together. Nevertheless, it's definitely a growing market, and the lack of supply Well, in terms of meeting demand on new products, clearly puts another emphasis on the attraction of Of pre owned. So we are interested in the market. And LogShift was a move in that direction. We're also making some Resource investment here in the U. K, but it's historically not been a priority for us at all. It's only around 1% of our business. So anything we do on it is going to be upside, obviously. But we haven't, at this stage, assumed anything Significant in the planned period that we're looking at. So if we get something going, it will be upside. That's good to hear. Thank you. Thank you. Thanks a lot. Thank you. We'll take our next question from Kate Colbert with Investec. Good afternoon, everyone. Three questions from me. The first question is why have you chosen to enter the EU market next Rather than an Asian market. The second question is very much that there's been some chat in the trade press About the fact that the major luxury brands have become too focused on China and Asia pre COVID to the detriment of big markets like the U. S. So do you think the Major brands are changing their view on allocation, and we'll look to diversify away from Asia. And my final question Which market do you think is more underdeveloped, the EU or the U. S? Which what was that last part, Kate? Which market? U. S. Versus EU. Which market is the more underdeveloped, the EU or the U. S? Okay. So we don't have in our plan any intention to get to the Asian market. That's all. We find it it's very volatile. And we honestly, we don't need it. We don't have the experience of the market. We think it's pretty crowded Overall, like I say, all the volatility in luxury watches, if you look over the decades, has tended all to be both kind of busting We've been bust of what's happened in Asia. So it really isn't on our horizon at any point to go to Asia. We saw the opportunity in the U. S, and I think we're very pleased that we've executed and I think demonstrated that our analysis That's correct, and we obviously see significant more opportunity there. We see similar conditions in the EU. We see the market as being fragmented And not being the kind of presence that we have here of beautiful flagship store supported by Really proactive digital marketing and great systems and everything else that we do. So we see a lot of the same Having said that, the EU is somewhere between U. K. And U. S. And your question about what's the most underdeveloped, then We had it in the chart when we look at the per capita sales, the U. S. Is undoubtedly the most underdeveloped With the EU markets being at various points between U. K. And U. S, but still in the absolute underdeveloped. But listen, we think the U. K. Market's underdeveloped. The more that we do and go there and reach out to that potential demand, the more success we have. So Honestly, and I think about your question about brands looking to maybe pull back and put a bigger emphasis on the Europe, I think it's fair to say that luxury brands are more made in Europe than the East for sure. And in the case of luxury watches, I think in this market as we've proven huge interest in the domestic market, And I think that's the case for Luxury Watchettor. There's a lot of potential within the Western markets that we're looking at. Great. Thanks very much. Thank you. We'll take our next question from Richard Taylor with Barclays. Yes, afternoon. Just a question on the CAGRs you've set out, please. They all look very encouraging for the U. K. And the U. S. I appreciate you say that the growth will be based on a continuation of the strategy that you've employed so far. But in the absence of guarantee on supply, What would you say the key upside and downside risks are to the CAGRs that you set out in the plan? And just thinking back to the IPO, I think the targets here are sort of more bullish At the time of the IPO, so if that's the case, what's changed since then to make you sort of more encouraged in terms of growth versus a few years back when you first came to the market? Thank you. Yes. I mean, when we did the IPO, first of all, we never looked out this far. Secondly, We only included, if you recall, projects that we knew were committed. So what we actually presented in the IPO was a Pretty significantly declining CapEx plan overall because we only put in there the projects that we had Committed. So we've taken a different approach here. We've looked out 5 years and we're speculative About opportunities of adding stores, of acquiring companies. So it's really done on a different basis. To be honest, we always thought the market had much more opportunity than we were calculating because of how we were effectively doing our guidance Overall, in terms of supply, yes, it's as you know, it's the biggest Question around everything that we do, we can't and we don't have commitment effectively, but we have our experience And we have the relationships, and we have reviewed our plans with all of our partners, as you would expect. So that's our best judgment about what we think we can deliver, which obviously includes our perspective on supply. The things that could go wrong, we haven't assumed any kind of cataclysmic economic event of any kind. So a massive meltdown in finances, we haven't planned that at all. We're planning What kind of stable conditions, if you like, overall from an economic standpoint, nor that we assume boom anywhere either. I don't know, Anders, what do you think? No, I think that's fair to say. I mean, obviously, the economy is a factor that Really, we can't do too much about and we're not planning for any material change in existing conditions with a bit of, obviously, cool down after the lockdown. In terms of risks, obviously, if there was another pandemic or anything like that, bets are off, I guess, if we had to go through another one and a half year of lockdowns across the territories, that would definitely throw our projections off, I think. And then obviously, We haven't included in our plan that any of our major suppliers would stop distributing to us as a multi brand distributor So they will continue to operate with sort of third parties of good quality, which we think will fall into that category. So those are obviously the risk. In terms of opportunities, we haven't built in any change in capacity, as Brian pointed out. So if there was an increase in global availability of brands that are hard to get our hands on, obviously, that would put The plan in a different perspective. So obviously, if that were to materialize either way, we'd obviously come back and communicate and update the market as such. Very helpful. Thank you. Thank We'll take our next question from Catherine Parker with Jefferies. Good afternoon, and thank you for taking my questions. So my first question is on the €300,000,000 to €340,000,000 CapEx spend. I wondered if you could give any granularity on the split between New stores versus refurbishments of existing stores within the guidance. And also any thoughts On the timing of the CapEx within the 5 years, like should we assume pretty much equal each year? Then my second question is on the entry into the EU market And the acquisitions you're looking to make, would you say you have any limits on the minimum number of agencies or stores A retailer would have for you to consider it to be meaningful enough to make the acquisition. And then to follow-up on Corina's question. Does this mean that you wouldn't open any Watches of Switzerland branded stores directly? You would only consider rebranding a chain of retailers that you buy. And then my final question is just On your guidance, I don't know if you're able to answer, but If you could give us some thoughts on the number of Mono brand openings that you're assuming When you calculated the sales growth assumptions and what visibility you might have on the monobrand openings? Thank you. Okay. So thank you. So in terms of the capital split, obviously, we geographically indicated what the It's going to be in our presentation. So that's there for you to read. In terms of the split between new and refurbishment, we have a lot of Refurbishment programs in our existing portfolio that we need to address. So we have the Meyers with an additional 10 stores to do in the U. S. Then we have our Wynn store that we're doing this year in Vegas. And then here in the U. K. Over the next 3 years, we're going to touch 24 of our Goldsmith Luxury formats, Where we're putting more emphasis on hospitality and that kind of things. And essentially using the concept that Been very successful for us in the major stores in the U. S. So we haven't really been specific on where we're going to spend this in terms of refurbs versus And if you think about it, the acquisitions that we've made so far has obviously been into franchises that has been under invested and underdeveloped. And they will require capital in terms of fixing the network that you bought as we've done with Meijer's and with the Vegas stores as you've seen. But we've seen really, really good return on that. So it will be a combination of sort of new and refurbishment. I'm not going to be more specific like But what I will say is that we do expect, on average, the payback of our capital to be around 3 years. In terms of timing and phasing of this, Obviously, we have really great visibility into the next sort of 12 to 18 months of projects and so forth. So we know and we've guided between CHF 40,000,000 CHF 45,000,000 for this year, which then obviously is going to need to come with a step up as we go through the plan In order to achieve that investment level, and we think it's going to be new spaces. We have Cincinnati coming online as you see. We have American Dream and so forth. These are big flagship statements that comes with a fair amount of investment, well, obviously, with good returns as well. And then when the pace of acquisitions come, which is harder to predict actually, that will dictate some of that capital increase then that we're going to see On the question about choice of Asia, again, If you look at what we've done in the U. S, so we acquired Meyers, and we've kept it as Meyers. It's got a great name. It's got a great jewelry business. And that seemed very obvious to us then and it still does today. But all of the new activity we did, our 2 stores in New York, The stores we took over in Vegas and stores we've opened in Boston with wind, they are all under the Wachsfield Switzerland. So There's a lot of new developments in the U. S. That we're looking at. And if they are new developments, Cincinnati and American Dream, both of them will be Wachitoff Switzerland, and any other new development we look at will be Wachitoff Switzerland. I think we don't see the same kind of new development opportunity in Europe. We don't think there's going to be that kind of spend in shopping malls in Europe overall. But in the event we're aware and in the event we want to get support from our key brand partners, we do it in Wachitoff Switzerland. But I think the most likely Development of the market there that we are assuming would be through acquisition. And as I answered earlier, we'd look at the nature of What we've acquired, and most likely, we would keep the name, we keep the people, we want to keep the reputation And database and everything else. Our whole approach on acquisitions is to do everything we can to retain the strength of what we're buying and Make sure that what we are doing is additive from systems and technology and marketing and scale. And The logic of that would be that you would most likely keep the name of the franchise. And your last question regarding the number of monobrands, we haven't specifically mentioned that in our plan. And it will be a combination of multibrands And Mono Brands, so we don't want to put a number behind that, if you're okay with that, because we actually haven't disclosed it. And again, it's always going to be subject to discussions with the brand and the pace and so forth. Thank you. We now have questions from the conference So we're going to move to questions from the webcast. We've got a question from Flavio Cereda from Jefferies. Do you think that EU customers are less driven by the investment collection aspect of the purchase versus the U. K? Flavio, we obviously don't know that. We don't have any EU customers yet to try and sort of understand. But I think it's fair to say when we see that our market is underdeveloped, the likelihood is that there is less of an appreciation of all that's wonderful About luxury watches and our heritage and value and that would include an appreciation of luxury watches as an investment class. So think it's a reasonable assumption to say that an underdeveloped market would have that lack of understanding. So I think it's good observation, but we obviously don't have evidence of that yet, but we'd probably agree in the suggestion. So we have no further questions from the webcast at the present time. So I'll pass back to you, Brian, for closing remarks. We are just everybody. Thanks for joining us. We think we've put together we've put a lot of work into this plan. We looked at all of what the potential that we saw out there, and then we Adjusted everything for what we thought was a likelihood of success. As I've said in the final slide, we take nothing for granted. We don't take our Support of our branded partners, for Granite Atoll, we know we've got to go project that we've been doing, but our Plan reflects our best projections of what we will be able to deliver. Our team has done a really great job pulling it all together. We've got a lot out of it in terms of seeing the opportunities and Thinking about the resources and the priorities that we have, and we hope our investment community have a greater understanding of where we're all headed now, which was the whole point of the exercise. So thanks so many of you for joining us and for all your questions, and no doubt look forward to seeing many of you in the days weeks ahead. Thank you.

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