Earnings Call: H2 2021

Jul 8, 2021

So good morning, everyone. Thank you for joining us, and welcome to the presentation of the Watchtower Switzerland Group Financial Results for the year ended April 2021. My name is Brian Duffy. I'm the CEO of the group, and I will be presenting an update for the year. And then our CFO, Anders Romberg, will present the financials and our outlook for fiscal year 'twenty two. We will then have some time for your questions. Fiscal year 'twenty one was one of strong growth for our group at +13.3 percent in constant currency, despite the COVID restrictions that disrupted retail in almost every aspect of daily life. Our U. S. Division delivered outstanding growth of 38 0.5% in U. S. Dollars despite significant reductions in traffic. Our U. K. Division delivered an equally outstanding growth of 3.6% despite the closure of our store for 26 weeks of the year and very little tourist or airport business. Adjusted EBIT came in at plus 38.9%, which Anders will comment more on. I'm very proud of our amazing team and the spirit shown during this year. We have carried strong momentum into fiscal year 'twenty 2, and we are well positioned for growth. As this chart shows, we are delivering on our goals of revenue and profitability growth. The mix of our business changed significantly in the year, firstly, geographically, with the U. S. Increasing from 27.8 percent to 33% of group sales. Luxury Watches increased by 16%, and therefore, the share of luxury watches moved from 83.9 percent to 87.1%. Our domestic client mix moved from 72 point 5% to 94.7% of group sales, clear proof of the supply driven characteristics of our business model. We committed to all of our planned capital investment projects. In the U. K, we expanded our network with a new Watch Dogs Switzerland store in Broadgate, London. We opened a new mono brand boutique for Rolex in my hometown of Glasgow, and we opened 8 other mono brand stores for Tag Heuer, Omega, Breitling and Tudor. We expanded our Knightsbridge flagship with the opening of a Rolex room, and we rebranded the 4 acquired Fraser Hart stores, and we have now completed the refurbishment of both Stratford and Kingston, both ex Fraser Hart stores. Business was strong throughout our U. S. Network with 3 Furby stores in Meyer's and Wynn and new stores in New York performing particularly well. 8 new mono brands were opened in the U. S. And are performing very well. We relaunched our e commerce platform in September 2020, and results today are encouraging. We completed the acquisition of AnalogShift as we look to expand in the pre owned and vintage markets. The COVID related disruption of store closures, home working and reduced travel created circumstances in which all things digital became very important, and our advanced technology and expertise were very advantageous. We more than doubled our online business. We opened a virtual luxury boutique manned by fully trained and experienced sales teams. Our CRM system supported really effective clienteling. Our new bi personal appointment system optimized client experience and conversion. We conducted remote new product presentations to clients, often with the collaboration of our brand partners. We increased our marketing activity and budget during the year and in the U. K. Achieved fantastic impact, recording 46,000,000 monthly reach on social media and a staggering 3,200,000,000 of digital impressions and click through from our digital campaigns of €37,000,000 In the U. S, where the focus for Watchlist Switzerland is brand awareness. Through many impactful collaborations, we achieved an amazing €5,100,000,000 of PR impressions. Our fantastic team have again delivered showing creativity, adaptability, enthusiasm and a love for what they do. They deserve the credit for our success. In fiscal year 'twenty one, we initiated the Watchedhurst Switzerland Group Foundation with a contribution of £1,500,000 and a further £1,500,000 planned for fiscal year 'twenty 2. With this £3,000,000 we will work on projects in our local communities in both the U. K. And U. S, and I will personally chair this foundation. Thank you all, and I will now pass over to Anders Vonberg. Good morning. This presentation is based on a pre IFRS 16 and a 53 week basis. We're very pleased with our performance in the fiscal 'twenty one. In spite of significant headwinds, we report record sales and profits. Net sales was up 13.3% in constant currency or 11.7 presented reported. We estimate that we lost around GBP 100,000,000 in the year due to disruptions, primarily in the UK. The 53rd week accounted for £17,600,000 Luxury Watches continued to outperform with net sales being up 16%. Luxury Jewelry, more dependent on footfall, was down by 12%. Others, mainly services, was also impacted by the lack of footfall, trading down 9 Our U. S. Business in constant currency was up by 38.5% on last year and versus FY 'nineteen, up by 64.8%, with less traffic during the year offset by higher conversion. In the UK, sales were up by 3 point 6% on FY 2020 and 3.1% on FY 2019 despite lack of tourism and heavily subdued airport traffic. The pivot to the domestic market during the year was an outstanding achievement, with domestic sales trading up by 54%. Mix towards Luxury Watches and mix within this segment had an adverse impact on our margin. U. K. Sales growth was driven by high and Luxury Watches with higher average selling price, but with reduced volume overall, while our growth in the U. S. Was more broad based with flat average selling price and volume being the main driver. Our adjusted EBITDA was 100 being the main driver. Our adjusted EBITDA was GBP 105,400,000 or plus 34.9% on last year. And our adjusted EBITDA margin expanded by 200 basis points versus FY 'twenty to 11.6%. We decided to repay all furlough support received during the fiscal year, and we paid all of our employees in full throughout the year. We also established the Watchlist Switzerland Group Foundation during the year to support needs in the communities where we operate. As part of our Goldsmiths Luxury program, we have accelerated depreciation for this segment of our portfolio. Adjusted EBIT came in at £77,600,000 or plus 38.9 percent on prior year. And adjusted earnings per share grew by 43.4%. Our balance sheet is in very good shape. During the year, we continued with our capital program, investing NOK 23,100,000 of expansion on our capital. This is below what we had originally planned. Some projects have been slightly delayed due to the pandemic and will be completed in fiscal 'twenty 2. Inventories were down by 7% on last year due to the timing of lockdowns of last year. Both trade and other receivables as well as payables increased impacted by the timing of lockdown again. Finally, we did, as a precaution, take out a seabill facility at the end of the first quarter of this year of £45,000,000 which we now fully repaid and canceled since we traded strong after the first lockdown. We closed the year with a net debt of £43,900,000 versus last year's £129,700,000 so quite pleased. Free cash flow improved by €58,900,000 or 115.9 percent, closing out at €109,700,000 Free cash flow conversion at 104% versus 65% last year. Working capital improved due to payables being normal this year end, while last year lower due to timing of lockdowns. We continued our investment program and spent 23 point SEK1 1,000,000 of expansion on our capital. At year end, our leverage was 0.4x versus last year's 1.7x. We're comfortable to operate at a leverage of about 1.5 to 2x. With net debt of €43,900,000 and current facilities of 190 SEK 7,500,000, we're well poised for further investment and or acquisitions for further growth. Our priority for capital allocation remains to invest for growth. All of our KPIs improved during the year. Our ROCE improved to 19.7%, up from 15.8 percent due to adjusted EBIT being up 38.9%, while average capital employed increased by 11%. Free cash flow at €109,700,000 or plus 115.9 percent on prior year and our 4 wall EBITDA at 18.3% versus last year's 15.6%. This is the result of improved leverage in the U. S. As well as channel mix in the UK, less airside traffic with variable rents and strong performance in e commerce. Adjusted EBITDA of NOK 105,400,000 or up 34.9% on last year. And now to our guidance for fiscal 2022. Our guidance assumes no national lockdowns in our markets or for that matter in Switzerland. We also base our guidance on our best view of supply. We do expect a gradual improvement in footfall, both in the U. K. As well as in the U. S. Customer demand is expected to remain buoyant throughout the year. We have not planned for any shift in consumer profile, And our tourism and airport sales will remain well below pre pandemic levels. We're also pleased to include a further contribution to our foundation. Net sales is planned to grow between 16% 21%, excluding any impact of potential acquisition. Sales is expected to come in between GBP 1,050,000,000 GBP 1,100,000,000 GBP 1,100,000,000 GBP Adjusted EBITDA and EBITDA margin expected to be flat to plus 0.5 percent on fiscal 2021, and our depreciation is expected to come in between £30,000,000 32,000,000 Our underlying tax rate is projected at between 21% 22.5%, as we assume U. S. Federal tax rates will increase from January 'twenty 2. CapEx is projected to be between NOK 40,000,000 and NOK 45,000,000 with some projects originally planned in FY 'twenty one, now being executed in FY 'twenty two. Our net debt pre any acquisitions is expected to come in at between £20,000,000 to £30,000,000 Thank you. We will now take your questions. And we'll now take our first question. It comes from Erwin Ramburg of HSBC. Please go ahead. Yes. Hi. Good morning, gentlemen. Thank you. Just maybe three follow ups on the guidance for the current year, high teensalesgrowth, If I take the midpoint. Can you help us understand how you see differently between the UK and the U. S, Given what you know now and if I look at high teens growth, what would be roughly the split in terms of volume versus price versus mix? Secondly, I'm wondering if you could talk about the contribution of e commerce to total sales. I think you mentioned that there was growth of 120%, but What does that mean in terms of the actual contribution? And where do you see this going as the stores reopen? And then thirdly, Looking at Monobrand Boutique potential, I think you went from 22% to 39%. I'm just wondering what's next in terms of run rate of opening of Mona Brands. Thank you. Thanks, Erwin. We haven't given a split U. K, U. S. I I mean, clearly in our guidance, clearly last year, the U. S. Performed super strong at 38.5% and the U. K. Lower because of the circumstances of stores closed and no tourism or little tourism in the airport So circumstances are changing. The situation is more favorable in the UK overall. But as the underlying reality is the U. S, we have really strong momentum in the U. S. From all of what we are doing through investing in our stores and the marketing activity and everything that's there. And the market has been very strong in the U. S. We also indicated in our announcement that business is strong here in the U. K. Too and has been since Reopened on April 12. Ecom, so our ecom business prior to The 220% that we did last year was growing at around 20% a year. We do we have Planned and assumed in our guidance that there'd be a correction this year because clearly, we're anticipating the stores are open for the whole year. Actually, e comm is performing Better than that at the moment in the U. K. So it's early days, but we'll see overall. And we continue to invest and growing their ecom in the U. S. From a small base. Mona Brands, we haven't disclosed a number of Mona Brands in the U. K. And U. S, But we do have we opened 8 in the U. S. We have a similar program, I would say, for this year. And in the U. K, we have really strong momentum and monogram development, some of which we'll be announcing as time goes on. So It's a good area of consistent growth that we're looking at and have included and the guidance that we've given. Thank you, Brian. Just maybe a follow-up On the high teen sales growth, is the bulk of it volume driven? Or are you seeing benefits of price increases from last year continuing this year. And is there any element of mix in the sense of, are consumers trading up or is growth similar at The high end as it is that there's a more entry level. Yes. No, sorry, you asked that earlier, and I didn't answer it. I mean, again, looking back at last year, we had Different performances in the two markets. In the U. K, the growth was largely from increase in average selling price, So that was from a mixture of previous price increases carrying through and mix overall. The U. S, So it was volume driven, there wasn't a big change in average selling price. And there was also a very healthy mix of sales growth pretty much across a broad base of business. All of our key brands growing very nicely, jewelry business growing nicely. We haven't, again, given sort of detail how we make up our expectation of growth for this year. But I think the underlying trends will continue to be there. We haven't assumed any pricing, and there's no pricing element carried forward year on year, so specifically on oil price. Mix, we'll see, I mean, there's been a continual improvement from mix overall, but We'll see actually in this year whether or not mix makes a further contribution. Not so clear because we're going to have more broad based business in the U. K. That was the case in fiscal 'twenty one. Our next question comes from Guido Lucarelli of Exane PNP Paribas. Please go ahead. Yes. Good morning. Thanks for taking my questions. The first one on the supply side. I was wondering what is the current level of the waiting list, especially for Rolex? And if you're seeing any similar trends with the waiting list also for other brands. The second one on the timing of the U. S. Store openings for this year. I think you mentioned last time American Dream planned to work the end of the year, end of the Christmas season. I was wondering if also the other stores that you announced today, what is the timing there? And finally, on the U. S. E commerce, you say there are very good growth, but on there is more numbers. So I I don't know if you could help us to understand how much could be the weight and the contribution for this fiscal year. Grito, on the supply side, it's kind of no change. We'd love to have more of the products that we have on waiting list. The dynamics of the waiting lists haven't changed at all. We continue to add more products onto our waiting overall. And our sense is that the supply demand differential is actually growing somewhat with the overall level of demand that's there. We have, obviously, as you know, big waiting lists on Rolex, Patek, all the new products and Patek's immediately all on waiting list along with other ongoing products Same again with Audemars. And again, I think those three brands together, I would say that the level of demand exceeding supply is probably overall increasing. And it's a genuine challenge for us is just managing the customer expectation and disappointment. There's other brands or other categories of products that are on waiting list as well, inevitably new products when they're announced. And we're very effective now in the service products that are announced, getting them communicated digitally. And they're taking what we call expressions of interest, People are saying, I want to buy that product when it arrives. And we have waiting lists, for example, and Omega Snoopy or Romiger, James Bond watches of some of the new Cartier, big interest in the new Cartier must line overall, BrightLink Endurance Pro, TAG connected. So there's overall, those Challenges in the industry and meeting the demand that's there and it's becoming more widespread, I would say, Overall, and obviously, we work with all of our branded suppliers to be as clear as we can on expectations of supply. And whenever we give guidance, it's always based upon A level of communication and understanding overall in supply. The second question? The answer to store openings. Timing of store openings, yes, you asked about American Duomo. One thing is we're Very positive and I've remained so open. If anything, I'm even more positive and optimistic about the American Green Project. Timing, we're working on it. And our friends at American Dream would say we should be opening before Christmas. We are still working on some detail with our brand partners and so on, whether it's before Christmas or just after, we'll see. It's not going to make a huge contribution to this year's numbers overall either way. If I had to bed today, I would probably It's more likely to be after Christmas than before. Ecom was at 2 20% of Prior to the year in the U. K, it was up to over 14% of the U. K. Business. Ecom in the U. S. From a small base, we're investing behind the business in the U. S. We're kind of learning the expectation of the U. S. Consumer overall. We're looking to invest more in stock to support the level of demand that we're seeing. I think it's sort of irresistible to say the potential of e comm in the U. S. Is very significant, but It takes time to build up your awareness, your status and your facilities and capabilities, but we are investing in it. It's growing well. We were ahead of our expectation last year from the re launch that we did in September, and we obviously expect reasonable growth within our numbers this year. But it will take time, it will take years to really Get to the point of a significant contribution from RECOM in the U. S, but the potential is definitely there. Thank you very much. Our next question comes from Corina Schueter of Goldman Sachs. Please go ahead. Hi there. Thank you for taking my question. I have 2, please. So I know you've already talked a little bit about supply on this call, but I just wanted to specifically get your views on the impact of 2 things. So firstly, the increased production this year by the Watch Brands as we lap manufacturing closures due to the pandemic last year. And Shrink closures due to the pandemic last year. And secondly, how the Watch brands are potentially thinking about their regional allocations As travel starts to resume, you've clearly demonstrated over the last year that you have a very strong domestic customer base, which the Watchtower has been very keen To take advantage of, but how will that work when travel resumes? And then the next question is on consumer behavior in the UK post the reopening of the And also it would be interesting to know whether the new initiatives that you introduced as a result of the pandemic like Rolex Click and Collect and Onboarding new brands to e commerce, whether these are permanent features that you that will continue even when we're fully back to normal, whenever that may be? Thank you. Thanks, Karina. What we understand from the brands on production is that they are up to Fuel production levels following the impact of the lockdown last year. So year on year, they're undoubtedly producing more. There was some small impact, we think, of kind of COVID outbreaks and isolation and whatever that affected some production schedules more towards the end of last year. Honestly, haven't heard anything of that in recent months. So production is up, but at the same time, demand is up as well. That's, I'm sure, as you know, geographically, huge increase in demand and Mainland China, but clearly Chinese population not traveling. There's still the opportunity and demand that's there, and that's Now you've moved towards our domestic market overall. Those stores are open throughout Europe, really the best of markets. Demand in the U. S, as we've been experiencing and reporting, has been very strong. So Demand has moved up in line with production, I would estimate on a kind of global basis. We do know that brands are looking more short term in terms of allocations. Traditionally, you would tend to allocate months in advance and change little. But now because of such volatility of countries opening, closing, whatever, And we know the brands are responding to market developments more short term than has traditionally been the case. I would say our regions are never getting enough, and we're always asking for more on On behalf of the region, overall, including behalf of our business. And that's not changed and I don't think will change in my lifetime. We'll always be looking to get more product with demand that's there. Consumer behavior, click and collect, Rolex is We won't be doing any more of that. It was effectively done during that period for waiting list clients when we had the product. But now obviously, our stores are fully open. But there's a lot of other things that happened and that we put in place Because of the lockdown, we'll become permanent parts of what we do. We implemented a luxury concierge here in London of fully trained salespeople giving help and assistance on online shopping or online research, and that's been hugely positive for our clients and our business and that will carry on. We always had an appointments business overall, but it generally was Store managers are calling clients, our clients calling them reasonably informal. But in the circumstances of last year, we implemented a new system. And we're making further developments on that system to integrate it with our CRM system, but it's proved very, very Positive and beneficial. We've been doing like 40% of our business in the U. K. During the opening period, including now on appointments. And all around, it's very, very positive. If you're reluctant, as many people are nervous, if you're going to a shopping center to know that you've got an appointment, you're going to a store, there's a desk and a salesperson waiting for you. They're ready there with the product that you're interested in, so you'll spend little time. And our stores, by the way, are Generally safe environments because of big beautiful stores and we don't have crowds of people in the stores. But anyway, the appointment system is Here to stay, I think, is a great way for us to clientele and interact with our clients. And obviously, the conversion on appointments are very, very high. The brands that came online with us just over a year ago for the first time, we are permanent additions to Our portfolio, so Panerai, Chiro, Vacheron Geiger. So we have expanded permanently the proposition online. We'll now take our next question. It comes from Catherine Parker of Jefferies. Please go ahead. Your line is open. Good morning and thank you for taking my questions. So my first question is back on the topic of monogram. And I wondered if you could share the penetration of monobrand sales within your total sales for fiscal year 2021 and if possible, a U. K, U. S. Flip? My second question is On e commerce in the U. S. And how your e com customers differ to your And whether you're managing to branch out to states where you're not already present. And then last question, which I hope doesn't infringe on topics this afternoon. So just on the competitive landscape, Given some recent news stories, so the rebranding of Tournear and then the rollout of the time delay concept from Richemont and whether you think it's an issue in terms of Consumer competition or with respect to Thanks, Catherine. We don't give the share of mono brands or breakdown in any more detail by sort of distribution type Our business, it's a different kind of business. Obviously, the sales per point of differentiation is much less than we do in our Multi brand stores. But anyway, we don't give that share. It's got good momentum. I think the brands that We're doing monobrands with Omega Tag, Breitling and now Tudor and Grand Seiko. Ecom in the U. S, I mean, it's we don't have a reading on sort of consumer behavior there, how different It may be almost certainly will be the same as the U. K. In that online, you have A good business, but you have a bigger proportion of people buying iconic product, product that they know and may well have tried on beforehand. And so it makes obvious sense that they would be happy to buy that online. Slightly lower average Selling price, but more steel, but less gold overall. And I guess that makes sense as well. We are selling in the U. S. To other states. We have concentrated we really believe in multi brand and the concentration of presence like we obviously have here in the U. K. We have a good presence obviously in Florida and Georgia, New York and Vegas, and are concentrating marketing activity on those markets where we have that benefit of presence and awareness and and Store Interaction. But in the meantime, we are getting clients and business from other states, but we'll see how that develops. Competitive activity, we honestly welcome the investments overall that are getting made by others, Particularly the U. S. Market, we think the market has a big scope to be invested in and elevate. And we're very happy not to be doing it alone And obviously, turnover there and making and the Turner brand overall. We believe our big store in New York will open towards the end of this year. But as far as I can say, it's all good. And there's so much to go on in the U. S. And the more that the overall market elevates and communicates, the better for all of us there. Similarly, Tyne Valley, it's a kind of multi brand proposition, obviously, from Richemont with systems and support, store design. We do all of that ourselves already, and I think we do a very good job in it. So it's not something We are likely to participate and understand what they're doing. And again, if it's a source of investment and elevation in the market overall, then bring it on. It's All good stuff. Our next question comes from Kate Candrus of Investec. Please go ahead. Your line is open. Good morning, everyone. Two questions for me. The first one is on Goldsmiths. How many Goldsmiths refurbs are you planning a year? And what sort of sales uplift What are you looking for? And my second question is on the airports. Where are you with the renewal of the airport contracts in the UK? I understand. So the goldsmith, in total, we're talking about 24 locations and is spread pretty evenly over the next 3 years. So that's the Goldsmith refurbishment that we're doing, introducing the Luxury concept. So that's about 8 year. It will be interesting to see, we obviously, our Goldsmith stores have been invested in significantly over the Few years and look great, but we are taking them to a different level again here with this Goldsmith Luxury concept. But we are we'll see whether or not the impact is beneficial as it's been with the reforms that we've done in the past. We're not actually assuming that. We're assuming a little less of an uplift and a little longer there for a payback from that CapEx. But we'll see some significant ones happening reasonably soon. Beautiful designs, a change to what we think the consumer Clearly wants more time, more hospitality, more leisure space and physical space all around, a big emphasis on repair and service and sort of help, almost like a kind of genius bar type configuration that we can really provide support and information and education, and that's what it is for clients. So we're excited about it. And A lot of the design that we're using came from the success that we had with Mayers in the U. S. That actually exceeded our expectation overall. So we'll see, and we'll look forward to reporting on it. Airport situation has been under continual negotiation And still is, but hopefully getting to a conclusion reasonably soon. Undoubtedly, the fact that there was Very little activity going on at the airport meant there was a little less pressure, if you like, on concluding in matters. But I think there's going to be a nice step up on traffic through the airports reasonably soon as we're all getting leisure traffic and business traffic. And Terminal 3 has been announced to be open for a Delta and a Virgin flights from the middle of this month. So I think we'll get to a conclusion on the airport business and reasonably soon. Our next question comes from Richard Taylor of Barclays. Please go ahead. Yes, morning. Can I ask two questions, please? First of all, the store you talked about in Cincinnati. Can you just talk a bit about the background to that? How long have you been looking there? And is this a sort of typical mezz size store? Or could this be a bit more bigger flagship sort of place? And then secondly, on the gross margin, it was down quite a bit in the UK and up quite a bit in the U. S. Is that mainly mix? Are you more sort of top end brands being sold in the U. K? And when we think about your guidance for the current financial year of 0% to 0.5% on the EBITDA margin, How does sort of the gross margins feed into that, please? Thank you. So that second question is way too complicated for me. So Anders will answer that first. Yes. So thanks, Richard. So obviously, this year, as we've done a lot of clienteling, which Brian pointed out that our revenue this year It's predominantly average selling price in the U. K. So we sold more of the high end brands in the U. K. And predominantly, therefore, Rolex in that category, Which has a lower margin as we've been clear on the high productivity, the lower margin brand has. So the expectation would be that we will have A different mix going into this year. Clearly, we expect other brands to come back, including jewelry, obviously, Which are more footfall dependent categories. So in terms of gross margin, you're absolutely right. U. K. Was down this year and it was entirely due to mix. But we do expect that to normalize and come back in this fiscal year that we're in. In terms of the guidance that we've given is obviously a combination of gross margin as well as overhead leverage and store cost leverage. Just want to point out that part of this year's profit included the benefit of the rates holiday, which obviously Slightly flattered the gross margin percentage as such. We didn't pay that back this year, as you know, Disclosed. We don't expect that to therefore be able to annualize this year. So if you drift that out, the leverage It's not flat to 0.5. It's actually better leverage because we're making up the $11,000,000 rates all day as well. Makes sense. Thank you. Cincinnati, I personally Haven't even seen the store yet because of the travel restrictions and so on. I've seen many pictures of it. It's one way it's one that came out of our look at the market and where we saw under development and potential for for the entry. It's a good market overall as we analyze it. It's got a wide conurbation, a lot of affluence, a lot of corporate activity that goes on in Cincinnati, Ohio. And there's been a migration towards This mall called the Kenwood Town Center, it's again seen lots of images of it. It's a very nice looking mall, has LV, has Apple, has A lot of development going on there. So we'll be opening a Watchlist Switzerland store there. We'll be anchored by Rolex. I think it could be a They're a nice addition to our portfolio. And we'd love it to be opening sooner, but I think it's probably going to be after Christmas overall. But we're working on it. It's designed and or it's in final stages of design, and it's available. So we'll see, but earnings are really a nice addition. And as we know, our big Multi brand stores are anchored by Rollings can make a meaningful contribution. Very good. Thank you. Our next question comes from Edward Albon of Morgan Stanley. Please go ahead. Yes. Good morning, guys. So two questions for me as well. The first one on Tudor. According to Morgan Stanley estimates, it was basically the fastest growing Swiss watch brand over the past 3 years. So Just wanted to know if you've experienced nice growth with the brand. And more importantly, if you have today the same kind of supply constraint that you're experiencing with Rolex. So that would be number 1. Number 2, on your Geographic footprint. One of your main peers, Boucherie, has been a bit bolder in terms of geographic expansion because as you know, they have a presence across Continental Europe. So for now, are you basically sticking to the U. S. And the U. Okay. And you think there's just enough growth coming your way in the U. S. For you to venture into new geographies? Thank you. Thanks, Edouard. Yes, Tudor is a great brand, has a lot going for it, a lot of tremendous Heritage and credibility and the history and the great quality of product and great marketing support. It's got a great position, great price point. And Obviously, as I think everybody would know, it's part of the Rolex family overall. There are supply constraints, the new product launches. The black bay blue dial, again, was immediately on waiting lists. The black Dial as well has been a problem. We've just introduced, I mean, fortunately, you probably have seen the bronze products that we've introduced So recently, it's mono brand only. We are the only mono brand in the U. K. And again, whatever has been supplied So far, it's gone and we get waiting list again. So it's not quite the same as Rolex. Overall, we're very optimistic about supply improvements overall in Tudor. But so Tudor, we have a group of brands that we're really focused on for a variety of activity, Strategic partner brands that have been Cartier, Omega, Brightwing and Tanker. That now includes Tudor for because we really have momentum and love what they're doing. So very positive about them. And you're right, BUKOR has been more geographically ambitious than we have if you look back over the decades. And we are obviously both now in the U. S. Market. And as you'll hear when we do our presentation this afternoon about a long range plan, We see opportunity in the EU market overall, and we've included some projections of successfully entering The U. S. Market, but we'll the EU market, sorry, and but we'll talk about that this afternoon. Okay, fantastic. Thank you. Thank you. And our next question comes from Louise Singlehurst of Goldman Sachs. Hi, good morning, Anders and Brian. Thank you very much for the information provided so far. Looking forward to this afternoon. I wondered, Brian, a question for you. I suppose a big surprise, if we think about the luxury industry in the last kind of 12, 18 months has been The appetite and the strong rebound and the recovery that we've seen. I wonder specifically if you can tell us about what you've seen across the cohort. Is it New customers coming in, is it a mix of the existing customers buying more, age groups? For a long time and many years, we've talked about the younger consumers Being distracted within the category, probably tempted by the smartwatch category, but there seems to be a real appetite for the traditional watch category and how You've viewed that across your CRM database in the last kind of 12, 18 months. Thank you. Yes. I agree, Louise. It's again, I don't think anybody would have predicted The real positive market trends that have been going on with luxury overall. We particularly see it in the U. S. Actually and see a lot of activity in the U. S. From The luxury sector overall in retail and obviously in the U. S, alongside that, you have a decline of Traditional department store business, so you have more activity going on with the brands directly developing. You have LV. You have clearly the Acquisition of Tiffany and the investment in Drive that's there and Kering Group equally very active in the U. S. So and within all that, then Luxury Watches clearly have been doing very well too. In terms of Changes of more self purchasing going on would be, I believe, which has been an ongoing trend, male and female, even more within the female consumer. We have sold more to existing clients inevitably because we're doing a lot more clienteling with our stores closed, so we're using our database. By definition, we've sold more. Whether or not that is reflective of demand, we don't really know because demand is strong. And data we've reopened our stores. Demand is clearly there and is more broad based across everything that we're doing. But certainly, if you look back over the last year, more online business and particularly more clienteling towards a waiting list, which by definition is more to existing client. Age wise, it's been a big part of our well, first of all, our analysis is that all generation there's been no change overall and the age profile of people are interested and when they start to become interested in luxury watches, somewhere in the mid-20s. The best segment from an age standpoint is 35 to 54, but people developing the situation economically of career, celebrating special occasions and all that. But people start buying into Watches from kind of mid-20s, and we haven't seen that change overall. That concludes today's question and answer session. I'd now like to hand the call back to Brian Duffy, CEO, for any closing remarks or additional comments. Thank you. Thanks, everybody, for joining us and for all of your very good questions. As usual, we're obviously delighted With the year that's behind us, delighted that life is getting back to normal. We're optimistic about Fiscal year 'twenty two has been reflected in our guidance and so far so good. We're going to have a lot more to talk to you about this afternoon. We may, For the first time really ever, look but further forward for our 5 year plan. So we'll