A.S. Watson FY18 results: sales up 10%

Date : 21 March 2019

The world's largest international health & beauty retailer has posted a strong set of annual results.

Results summary - growth across all H&B divisions

At the end of 2018, A.S. Watson’s retail division had 14,796 stores across 24 markets, a 6% increase compared to the previous year. Total sales for the Health and Beauty segment increased 10% to HKD138.9bn, with comparable stores growing 2.1%. Total revenue, EBITDA and EBIT of HKD168.9bn, HKD16.1bn and HKD13bn increased by 8%, 9% and 8% respectively.

H&B Asia: comparable store sales up 7.1%

  • Health and Beauty Asia results were particularly strong, with an 20% increase in EBITDA driven by a 10% increase in store numbers, but also a comparable store sales uplift of 7.1%
  • The Philippines was a key market for new store openings for the Watsons banner. Together with its joint venture partner SM Retail, they opened more than a 100 new stores

H&B China: sales up 4%

  • Health and Beauty China trading under the Watsons banner continued to perform strongly, reporting a 7% growth in EBITDA and a healthy EBITDA margin of 19%
  • Store network expansion continued at double-digits, but comparable stores sales growth fell 1.6%

H&B Europe: EBITDA growth of 6%

  • Health and Beauty operations in Europe delivered another solid performance with EBITDA growth of 6%
  • H&B Western Europe accounted for 50% of total H&B sales for the retailer, but growth remains subdued
  • H&B Eastern Europe is A.S. Watson’s smallest H&B division. However, it continued to show strong growth potential, reporting an 8% increase in sales growth in local currency
  • Click here to see Rossmann’s FY18 results
  • Kruidvat, Trekpleister, Prijsmepper, Ici Paris XL and Pour Vous have posted a 3.6% increase in turnover to €2.9bn. Turnover in the Netherlands increased 3.5% to €2.2bn. In Belgium, sales amounted to €687.2m, €9.1m from Luxembourg, €2m from Germany and €3.5m from France. The number of stores increased from 1,633 to 1,675

Loyalty and exclusive sales important

A.S. Watson continued to expand its online and offline customer base. It has 132m loyalty members from around the world. The retailer continues to develop and add to its range of exclusive products - sales accounted for 34% of total H&B sales (HKD138.9bn) last year.

Areas of focus

A.S. Watson has cited several macroeconomic uncertainties, including trade disputes, Brexit outcome, fluctuations in commodity and currency prices that could impact the business. In retail, it has outlined several key areas of focus:

  • Adding digital and delivery capabilities to drive offline and online integration
  • Introduce initiatives to help personalise customer experiences
  • Enhancing store formats

Want to know more?

Subscribers can read more on A.S. Watson's Strategic Outlook here.