TIDMWOSG
RNS Number : 7722H
Watches of Switzerland Group PLC
31 July 2023
31 July 2023
Watches of Switzerland Group PLC (the "Company")
Annual Report and Accounts 2023
In compliance with Listing Rule 9.6.1, the Company announces
that the following documents have today been submitted to the UK
Financial Conduct Authority, and will shortly be available for
inspection via the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
1. Annual Report and Accounts 2023; and
2. Notice of Annual General Meeting of the Company, to be held
at 36 North Row, London W1K 6DH at 3.30pm on 31 August 2023
In accordance with DTR 6.3.5(3) the Annual Report and Accounts
2023 and the Notice of Annual General Meeting are accessible on the
Group's website: thewosgroupplc.com
A condensed set of Watches of Switzerland Group PLC financial
statements and information on important events that have occurred
during the year and their impact on the financial statements were
included in the Company's FY23 results announcement on 13 July
2023. That information together with the information set out below
which is extracted from the Annual Report and Accounts 2023
constitute the requirements of DTR 6.3.5 which is to be
communicated via an RNS in unedited full text. This announcement is
not a substitute for reading the full Annual Report and Accounts
2023. Page and note references in the text below refer to page
numbers in the Annual Report and Accounts 2023. To view the FY23
results announcement visit the Company website:
thewosgroupplc.com/investors
For further information, please contact:
Laura Battley
Company Secretary and General Counsel
+44 (0)20 7317 4604
companysecretariat@thewosgroup.com
Additional Information
Principal risks and uncertainties
Below are descriptions of our principal risks and uncertainties
and explanations of how we manage or mitigate the risk. It is
recognised that the Group is exposed to risks wider than those
listed. However, we have disclosed those we believe are likely to
have the greatest impact on our business at this moment in
time.
Principal risk description How we manage or mitigate the
risk
Business Strategy Execution and
Development
If the Board adopts the wrong strategy The Board reviews its business
or does not implement its strategy strategy on a regular basis to
effectively, the business may suffer. determine how sales and profit
The Group's growth strategy exposes can be maximised, and business
it to risks and the Group may encounter operations can be made more efficient.
setbacks in its ongoing expansion The Board has significant relevant
in the UK, US, and Europe. experience, including in the retail
The Group's significant investments and luxury markets.
in its showroom portfolio, IT systems, The CEO provides updates to the
colleagues and marketing may be Board on key development opportunities
unsuccessful in growing the Group's and initiatives.
business as planned. Expansion of the property portfolio
The Group may make acquisitions or potential acquisitions must
or other investments that prove meet strict payback criteria. Return
unsuccessful or divert its resources. on investment of marketing and
Successful growth through future other investment activity is monitored
acquisitions is dependent upon closely.
the Group's ability to identify Key management information is provided
suitable acquisition targets, conduct to the Board on a regular basis
appropriate due diligence, negotiate to help inform strategic decision-making.
transactions on favourable terms, The Group has adapted its strategy
complete such transactions and to take advantage of online trading,
successfully integrate the acquired client appointments and introduced
businesses. the Luxury Watch and Jewellery
The Group may fail to respond to Virtual Boutique to maximise sales.
the pressures of an increasingly The Group has diversified its operations
changing retail environment effectively through the expansion of mono-brand
and rapidly. The re-evaluation boutiques and ecommerce platforms.
of priorities and their delivery, The Group operates in the UK and
including the consideration of US, and recently entered into the
initiatives to respond to permanent European market. There is international
changes in client behaviours or market diversification reducing
to change working practices, is reliance on one territory.
paramount in the current environment.
------------------------------------------------
Key Suppliers and Supply chain
The manufacture of key luxury watch The Group fosters strong relationships
brands is highly concentrated among with suppliers, many of which have
a limited number of brand partners been held for a significant length
and the production of luxury watches of time.
is limited by the small number Supplier distribution contracts
of master watchmakers and the availability are monitored to ensure ongoing
of artisanal skills. Owners of compliance with contractual obligations.
luxury watch brands control distribution The Group works collaboratively
through strict, Selective Distribution with partner brands to identify
Agreements. Consequently, the relationship product trends and forward demand.
with owners of luxury watch brands Continued focus on providing exceptional
is crucial to the Group's success. client experience, representing
Some of the Group's distribution the brands in the best possible
agreements with luxury watch brands way.
provide owners of such brands with In-depth training for showroom
a right to terminate the agreement colleagues is provided, including
in the event of a change of control specific training provided by the
and/or management of the Group. brand partners.
The Group is subject to the risk The Group's sales mix is becoming
that owners of luxury watch brands more broad-based, with less reliance
may decide to terminate these contracts on individual brands to drive success.
or otherwise not to renew them
upon expiry, or to reduce the number
of agencies they grant to the Group.
The Group's distribution agreements
with suppliers do not guarantee
a steady supply of merchandise.
The Group's business model may
also come under significant pressure
should the owners of luxury watch
brands choose to distribute their
own watches, increasingly or entirely
by-passing third party retailers
such as the Group.
As a result of COVID-19 or other
pandemics, supplier manufacturing
operations could be forced to close,
impacting operational activities,
client experience and business
strategy.
Client Experience and Market Risk
An inability to maintain a consistent The Group provides the ultimate
high-quality experience for the luxury environment for its clients
Group's clients across the sales to feel welcome, appreciated and
channels, particularly within the supported
showroom network, could adversely Our Xenia Client Experience Programme
affect business. further elevates our client experience
The increased number of registration proposition.
of interest (RoI) watches could Exceptional training is provided
adversely impact the perceived for our showroom colleagues, and
client experience. other client facing colleagues,
The Group faces competition and to allow them to provide the best
any failure by the Group to compete client service, along with in-depth
effectively could result in a loss product knowledge.
of market share or the ability The CRM database allows the Group
to retain supplier agencies. Long-term to engage with the client on their
consumer attitudes to diamonds, journey from a potential to a loyal
gold and other precious metals client.
and gemstones could be affected The Group continues to invest in
by a variety of issues, including and develop its product offering
concern over the source of raw to improve the value offered to
materials, the impact of mining consumers, retailers, and manufacturers.
and refining of minerals on the Competitor activity is monitored
environment, labour conditions in detail, enabling strategic decision-making
in the supply chain, and the availability on key market positions.
and perception of substitute products, The diversification of the Group
such as cubic zirconia and laboratory-created through mono-brand boutiques and
diamonds. Equally, longer term significant online presence together
consumer attitudes to more technologically with the Group's scale and technological
advanced watches, such as 'smart capabilities are competitive advantages
watches' could reduce consumer for the Group.
demand for luxury watches.
Colleague Talent and Capability
The Group depends on the services The Trading Board considers the
of key talent to manage its business, development of Senior Management
and the departure of such colleagues to ensure there are opportunities
or the failure to recruit and retain for career development, promotion,
suitable personnel could adversely and appropriate succession.
affect the Group's business. The Nomination Committee considers
Client experience is an essential the succession planning for the
element in the success of the Group's Board, and Senior Management.
business, where many clients prefer The Company's recognition programmes
a more personal face- to-face experience are in place to incentivise and
and have established personal relationships motivate colleagues.
with the Group's retail colleagues. The Group operates a share save
An inability to recruit and retain scheme for all colleagues to participate
suitably qualified colleagues, in the growth of the Group.
especially with specialised knowledge A wide range of training and development
of luxury watches and jewellery, programmes are available to colleagues.
would have a material impact on The Colleague Engagement Survey
the Group. provides an insight into what colleagues
feel would make the Group an even
better place to work.
The Group continually reviews the
remuneration and benefits packages
for all colleagues.
A focused project group has been
established, with an objective
to monitor and reduce retail labour
turnover, particularly in the first
year of employment.
We utilise a two-way engaging communications
platform, Workplace, globally.
This social channel underpins Group
communications to colleagues.
Data Protection and Cyber Security
The increasing sophistication and Dedicated Group Data Protection
frequency of cyber-attacks, coupled Officer in place.
with data protection laws, highlight Significant investment in systems
the escalating information security development and security programmes.
risk facing all businesses. Systems vulnerability and penetration
As the Group operates in the UK, testing is carried out regularly.
US, and European markets, the regulatory The Group Data Protection Committee
environment surrounding these areas meets regularly to review related
is considered more complex. processes and emerging risks.
Security breaches and failures Information security and data protection
in the Group's IT infrastructure policies, procedures, and training
and networks, or those of third in place.
parties, could compromise sensitive Strict access rights are in place
and confidential information and to limit access to data and reports
affect the Group's reputation. to limited people.
Theft or loss of Company or client Regular communication with all
data or potential damage to any colleagues on the risk of 'phishing'
systems from viruses, ransomware emails and alerts of identified
or other malware could result in examples.
fines and reputational damage to Security Information and Event
the business that could negatively Management tools have been introduced
impact on our sales. across the Group's technology estate.
Our Virtual Private Network security
controls have been enhanced considering
the increased requirement for use
through working from home arrangements.
Enhanced password security measures
have been introduced globally to
decrease the likelihood of a breach.
Business Interruption
Adverse weather conditions, pandemics, The Group has a framework of operational
travel disruption, natural disasters, procedures and business continuity
terrorism, acts of war or other plans that are regularly reviewed,
external events could adversely updated, and tested.
affect consumer discretionary spending The multi-channel model allows
or cause a disruption to the Group's clients to purchase online from
operations. the safety and comfort of their
The inability of the Group to be homes.
able to operate showrooms or a Robust security arrangements are
significant reduction in available in place across our showroom network
colleagues to operate the business, to protect people and products
such as during a material pandemic, in the case of security incidents.
would significantly impact the A comprehensive insurance programme
operations of the business. is in place to offset the financial
The Group offers flexible delivery consequences of insured events.
options (home delivery or click Business critical systems are based
and collect in showroom) and its on established, industry- leading
online operations rely on third package solutions
party carriers and transportation A detailed IT development and security
providers. The Group's shipments roadmap is in place aligned to
are subject to various risks, including our strategy.
labour strikes and adverse weather. Reliable and reputable third party
The Group may experience significant logistic partners have been engaged
theft of products from its showrooms, to ensure the secure transportation
distribution centres or during of goods.
the transportation of goods. If The Group has in place action plans
a hold-up, burglary, or other theft to effectively deal with the impact
incident takes a violent turn, of a pandemic on business operations.
the Group may also suffer reputational
damage and our clients may become
less inclined to visit our showrooms.
Disruptions to, or failures in,
the Group's IT infrastructure and
networks, or those of third parties,
could disrupt the Group's operations,
especially during periods of increased
reliance on these systems such
as those experienced during the
pandemic lockdowns.
The Group relies on IT networks
and systems, some of which are
managed by third parties, to process,
encrypt, transmit and showroom
electronic information, and to
manage or support a variety of
business processes and activities,
including sales, supply chain,
merchandise distribution, client
invoicing and collection of payments.
------------------------------------------------
Regulatory and Compliance
Fines, litigation, and reputational The Group actively monitors both
damage could arise if the Group regulatory developments in the
fails to comply with legislative UK, US and Europe and compliance
or regulatory requirements including, with existing obligations.
but not limited to, consumer law, Clear Group policies and procedures
health and safety, employment law, are in place, including, but not
data protection, anti-bribery and limited to, anti-bribery, corruption
corruption, competition law, anti-money and fraud, whistleblowing, and
laundering and supply chain regulations. data protection.
As the Group continues to expand Mandatory induction briefings and
in the US and Europe, there is training for all colleagues on
a risk the business lacks the detailed regulation and compliance
knowledge of US and European laws Experienced in-house legal team
and regulations resulting in a with external expertise sought
breach, significant fine, and reputational as needed.
impact. The established culture and values
foster open, honest communication.
Operational activities have been
amended, and continue to be updated,
to comply with guidance provided
by the Government to prioritise
the safety of colleagues and clients.
Regulatory compliance reviews form
part of the rolling Internal Audit
plan.
------------------------------------------------
Economic and Political
The Group's business is geographically Regular monitoring of economic
concentrated in the UK and US, and political events.
with planned further expansion Focus on client service to attract
in Europe. Any sustained stagnation and retain clients.
or deterioration in the luxury Detailed sales data is analysed
watch or jewellery markets or decline to anticipate future trends and
in consumer spending in these territories demand, taking into consideration
could have a material adverse impact the current economic environment.
on the Group's business. Through the expansion into the
The Group or its suppliers may US and Europe, the Group is not
not be able to anticipate, identify wholly dependent on the economic
and respond to changing consumer or political environment in one
preferences in a timely manner, single market.
and the Group may not manage its
inventory in line with client demand.
Ongoing legal, political, and economic
uncertainty in the UK, US, European
and international markets could
give rise to significant currency
fluctuations, interest rate increases,
adverse taxation arrangements or
affect current trading and supply
arrangements.
------------------------------------------------
Brand and Reputational Damage
The Watches of Switzerland Group's The Group has a clear and open
trading brands and its corporate culture with a focus on trust and
brand are an important asset, and transparency.
failure to protect the Group's Training and monitoring of adherence
reputation and brand could lead by colleagues to Group policies
to a loss of trust and confidence. and procedures.
This could result in a decline Excellent client experience is
in the client base, affect the a key priority of the Group.
ability to recruit and retain the The Group undertakes regular client
best people, and damage our reputation engagement to understand and adapt
with our suppliers or investors. the product, offer, and showroom
environment.
The use of impactful, digital-led
marketing, along with an in-depth
knowledge of products, makes the
Group an authority in the markets
it serves.
------------------------------------------------
Financial and Treasury
The Group's ability to meet its In May 2023, the Group successfully
financial obligations and to support refinanced, entering into a new
the operations and expansion of GBP225.0 million multicurrency
the business is dependent on having revolving loan facility with a
sufficient funding over the short, five-year term.
medium and long-term. The Group's net cash position,
The Group is reliant on the availability available funding and cash flow
of adequate financing from banks projections are regularly monitored
and capital markets to meet its by management and the Board.
liquidity needs. Exchange and interest rates are
The Group's level of indebtedness regularly reviewed to determine
could adversely affect its ability if hedging should be put in place.
to react to changes in the business A three-year strategic cash flow
and may limit the commercial and is prepared and stress-tested,
financial flexibility to operate including the impact on covenant
the business. calculations.
The Group is exposed to foreign Quarterly meeting with the lenders'
exchange risk and profits may be agent to update on forecast and
adversely impacted by unforeseen trading.
movements in foreign exchange rates.
Significantly reduced trading over
an extended period, due to a pandemic,
could impact the business's ability
to operate within committed credit
facilities.
------------------------------------------------
Climate Change
The increased frequency of extreme The Board has overall responsibility
weather events may lead to the for managing climate- related risks,
significant disruption of retail as well as ensuring our strategy
showrooms, offices, and distribution creates value and achieves our
centres, through flooding and strong Purpose to WOW clients, while caring
winds. The supply chain may also for colleagues, our communities
be impacted through transporting and our planet.
goods to showrooms. Climate-related issues are addressed
In a changing climate, there is on a regular basis by the ESG Committee,
the potential for higher insurance which is chaired by Independent
premiums for business operations, Non-Executive Director, Rosa Monckton.
especially ones located in specific The ESG Committee challenges our
geographies. ESG Steering Group on progress
The increasing cost of energy and against goals and targets.
potential regulatory mechanisms Key climate-related risks and opportunities
on direct carbon emissions, may are governed via our Audit & Risk
impact business financials and Committee along with the accuracy
profit if the Group cannot transition and compliance with ESG-related
to a more low carbon business model. disclosures, including TCFD.
The Group's reliance on premium The ESG agenda continues to evolve
raw materials, which are a finite rapidly and climate training has
resource, increases its exposure been introduced for Board members
to resource scarcity, and the potential to ensure they have sufficient
increase cost of obtaining these knowledge for effective decision-making.
resources in a challenging supply The CEO has overall operational
chain environment. responsibility for Climate Strategy
The Group may fail to implement and the mitigation of related risks.
its mitigation strategy to reduce The CFO has day-to-day operational
its impact on the climate and manage responsibility for climate-related
the risk appropriately, leading risks and opportunities and chairs
to increased scrutiny from stakeholders a regular ESG Steering Group, which
and investors, resulting in reputational reports into the ESG Committee.
damage. The Group has a dedicated Head
of Sustainability and ESG, who
has significant experience in relation
to climate change.
The ESG Steering Group is responsible
for assessing and managing climate-related
risks and opportunities against
KPIs aligned to our ESG pillars
of 'People, Planet and Product'
and ensuring all operational matters
in respect to our ESG Strategy
are fully embedded into our business
strategy and operation.
Each ESG pillar is supported by
Working Groups, which include senior
operational managers, with input
from external consultants.
------------------------------------------------
Further information on the financial risks we face and how they
are managed is provided on pages 112 to 121 of the Annual Report
and Accounts 2023.
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report
and Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year that give a true and fair view
of the state of affairs of the Group and the Company as at the end
of the financial year, and of the profit or loss of the Group for
the financial year.
Under that law the Directors have elected to prepare the Group
Financial Statements in accordance with UK adopted international
accounting standards and have elected to prepare the Company's
Financial Statements in accordance with United Kingdom Generally
Accepted Accounting Practice, including FRS 102 (The Financial
Reporting Standard applicable in the United Kingdom and the
Republic of Ireland) and the Companies Act 2006.
Under company law, the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the Company and of
the profit or loss of the Group for that period.
In preparing the Annual Report and Accounts, the Directors are
required to:
- Select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors (or
in respect of the parent company Financial Statements, Section 10
of FRS 102) and then apply them consistently;
- Make judgements and accounting estimates that are reasonable
and prudent;
- Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
- Provide additional disclosures when compliance with the
specific requirements in IFRSs (or in respect of the parent company
financial statements, FRS 102) is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the Group's financial position and financial
performance;
- For the Group Financial Statements, state whether
International Financial Reporting Standards in conformity with the
requirements of the Companies Act 2006 and UK adopted international
accounting standards have been followed, subject to any material
departures disclosed and explained in the Financial Statements;
- For the Parent Company Financial Statements, state whether
applicable UK accounting standards, FRS 102, have been followed,
subject to any material departures disclosed and explained in the
Parent Company Financial Statements;
- Prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and the
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Company and the Group and enable
them to ensure that the Financial Statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic report, Directors' report,
Directors' Remuneration Report and Corporate Governance statement
that comply with that law and those regulations. The Directors are
responsible for the maintenance and integrity of the corporate and
financial information included on the Company's website.
Each of the Directors, whose names and functions are listed on
pages 130 and 131 of the Annual Report and Accounts 2023 confirms
that, to the best of their knowledge:
- that the Group Financial Statements, which have been prepared
in accordance with UK adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial
position and profit of the Group;
- that the Annual Report and Accounts 2023, including the
Strategic Report, includes a fair review of the development and
performance of the business and the position of the Company and
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face;
- that they consider the Annual Report and Accounts 2023, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position, performance, business model and strategy.
The Directors of Watches of Switzerland Group PLC are listed in
the Group's Annual Report and Accounts 2023 and on the Group's
website: thewosgroupplc.com
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END
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July 31, 2023 09:23 ET (13:23 GMT)
Watches Of Switzerland (LSE:WOSG)
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De Abr 2024 a May 2024
Watches Of Switzerland (LSE:WOSG)
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De May 2023 a May 2024
