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Nov 2012: Swatch Group – Like Father, Like Son?

November 21, 2012

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Swatch Group – Like Father, Like Son?

Nov 2012 (CHF423)

 

Whilst we endeavour to make as much of our research actionable on the date of publication as possible, occasionally we may publish research on a company where the conclusion is still open, as we’d rather the valuation were lower or that we knew a little more.

Swiss watch industry bellwether, Swatch Group, ­­has many of the attributes that we seek-out in franchises and we think the business is worthy of your attention. The group’s highly unusual combination of scale, engineering excellence and high-end brands was what initially piqued our interest. However, the business does not get our full seal of approval just yet as we wait for further convincing on some areas such as management succession (perhaps our biggest concern), potential downside risk from peak margins and – despite its strong historical returns performance – a possible low emphasis by current management on return on capital.

On close inspection, Swatch looks a very attractive business as it combines a vertically-integrated business model with high barriers to entry, innovation, and boasts a diverse portfolio of high-value global luxury brands. Above all, it has shown in its almost 30 year history that it is a resilient growth business, built largely organically. Such compounding characteristics are always attractive and currently on offer at an EV/EBIT of 11.6x. A reasonable, but not give away price.

Swatch’s compelling investment attributes
  • Long history of decent (and largely organic) sales growth (+6% compounded since 1990) and returns (15% average ROE since 2002)
  • Book value has compounded 11% since 2002
  • Has a prudent capital structure with a net cash position of CHF2bn (10% of MCap)
  • Thirty-year history of growth, technological and industrial innovation and increasingly, high-end retailing prowess
  • In particular, the revitalisation of the Omega brand in the late 1990s – detailed later – epitomises Swatch’s culture of innovation leadership
  • An “ok” starting-valuation: 15.2x trailing P/E

Fig.1: Swatch Group – a resilient business in the luxury sector

  Source: Capital IQ, Holland Advisors

Group background
  • Swatch Group is the dominant Swiss watch manufacturer
  • The group today is a result of a concerted attempt to revive the Swiss watch industry back in 1983 and was created via the merger of two longstanding (but at the time, declining) Swiss watch businesses (ASUAG and SSIH) brought together by visionary manager Nicolas Hayek. His son Nick now runs the business, post his father’s death in 2010
  • The group successfully overcame the threat posed by Japanese quartz watches through low-cost manufacturing and a revival of high-end mechanical brands (esp. Omega)
  • The group today remains closely-held (41%) by the original ‘Hayek pool’ of investors
  • The business has been largely organically developed with an emphasis on brand redevelopment (Omega is the flagship brand accounting for over 40% of sales) and innovation
  • Notably, and somewhat unusually, Swatch group also supplies the broader global watch industry (i.e. its competitors) with parts and fully-assembled watch modules (‘movements’) and has a quasi-monopoly in this area. However, in a bid to force competitors to share more of the industry’s R&D costs, the company is seeking to restructure this arrangement (to allow more discretion in who it supplies) subject to imminent rulings from the Swiss competition authorities
Company financial targets
  • Sales: Targeting CHF10bn in gross sales within 3-4 years (implying 10% compounded growth)
  • Investment: Increase own-store sales from 18% currently to 30% in the medium term
Strengths/Operational Excellence
  • Internal Culture: Swatch enjoys something of a unique business model and company culture, both of which were instilled by founder Nicolas G. Hayek.
    • While the business is typically viewed externally as a luxury-goods business, more notably, it sees itself first-and-foremost as an industrial company
    • Unusually, the business is vertically integrated. For example, the company sources from its in-house electronic production facilities, is a leading innovator in the industry (as shown by its near monopoly in so-called ‘balance springs’), owns an array of high-profile brands and has an extensive network of retail outlets
    • It realises the importance (and synergies) of volume and scale to technological innovation and that barriers to entry are (perhaps counter-intuitively) just as high in high-volume engineering as they are in high-end brands. It remains one of the only luxury goods brands to combine both a high and low-end product range (Omega and ‘Flik Flak’)
  • Brands: The group has a very strong brand portfolio (Omega, Breguet, Tissot, Longines, Swatch etc.) – a broad mixture of luxury and high-volume brands. These brands represent over 75 % of sales and profits
  • Scale: The breadth of Swatch Group’s intellectual capital is perhaps represented by its 28,000 workforce which is in stark contrast to LVMH’s Watch & Jewellery division which is 1/10th the size at 2,800 (including approx. 500 from the Bulgari watch division recently acquired). This is not to imply that Swatch Group is inefficient – rather that its key competitors are much more asset-light, and in effect more like marketing and design businesses than true watch manufacturers
    • The group understands the benefits of scale – It is suggested that some of Swatch’s mid-range brands such as Tissot make as much profit as LVMH’s entire Watch and Jewellery division
So, it sounds like a ‘no-brainer’ Franchise. What’s holding us back?

Swatch’s founder Nicolas G. Hayek personified the Swatch Group and was instrumental to its strategy, culture and success. Hayek died in his office (aged 82) in 2010 after almost 30 years at the helm of the business. The man truly epitomised his own management ethos:

“The rarest resources are entrepreneurial types in top management.”

A point we agree with as we search for the highest quality business franchises across the globe. Whilst we are quoting luminaries we will let Charlie Munger chip in:

“it is better (within organisations) to concentrate decisions and process in one person”.

Management succession

Sam Walton, Sol Price, Warren Buffett, Bill Gates, Jack Welch, Tim Martin, Michael O Leary et al[1] show that the impact single-minded, contrarian and some might say ‘dictatorial’ leaders can be extraordinary. The unfortunate problem that often arises however is the vacuum left when these visionaries are succeeded by the next generation of management. In the case of Swatch Group, Hayek’s offspring are now in charge: son (Nick, CEO since 2003), daughter (Nayla, Chair since 2010) and grandson (Marc, who took over as head of flagship prestige brand Bregeut from his grandfather also in 2010). All have been involved in Swatch Group to varying degrees over the last 15 years or so. To our mind, it remains to be seen whether they also possess the nose for innovation and brand development.

The problem that we investors face in evaluating this dilemma is that the Swatch Group’s transparency to investors is currently poor, not allowing us to determine the new management’s true attitude to say, organic brand building (vs. acquiring brands), innovation or indeed whether the new management can ever really hope to command the immense employee respect afforded to the founder.

We will not labour this point other than to say that transition processes after a forceful, dominant leader leaves are potentially disruptive and uncertain times for companies. It is also unclear at this stage whether the next generation of Hayeks see the group and its culture in the same way as the founder or whether they have conviction about a different way to evolve the group. To be clear: in our mind, different is this context is most likely to mean ‘wrong’.

Capital Allocation (and margin development)

From what we can gather (bearing in mind that the company does not meet with shareholders, nor publish presentations, nor call transcripts!), capital allocation seems to get little external mention. Any of the few historical conference call discussions that we have managed to get our hands on (three since 2009!) have centred on the unarguably impressive margin progression made by the group in recent years. The greatest insight on capital allocation in a 2008 conference call does not inspire confidence as it was at best ambiguous and at worst a contradiction of the previous year’s intention of no new acquisitions.

“…and if I look at our portfolio, I think we have no need to invest the money in buying another brand. But what we are doing is pushing Tiffany forward, pushing the other brands, pushing the industrial base…” – Nick Hayek, CEO Q208 conference call[2]

And then just over a year later:

“….and you never know, if there is an opportunity coming up to make an acquisition, we will have the cash to act without asking a bank somewhere and this gives us an advantage. It has nothing that we have now identified that we would buy, but you never can exclude anything. So, that’s why, for the moment, we think keeping that cash in hand is better than to do a share buyback program.” – Nick Hayek, CEO Q409 conference call

When analysing the return on capital, what is particularly obvious to us is that the asset-turns of the business have noticeably declined in recent years largely due to the heavy stock investment associated with the own-store expansion. For now, Mr. Market is understandably more impressed by the excellent operating margin performance (23.9% in 2011 – an all-time high).

We find it hard to ascertain whether the current higher margin levels, up from a 10 year average level of 19%, is due to a changed revenue mix or whether it shows a slightly greater desire to maximise profitability under the second generation of Hayek managers. This second scenario causes us a little concern in our minds in the absence of clarity from the company on this issue.

“we are not trying at all cost to have the highest operating income margin that you can see, because we invest money. We invest money in the brands, in the distribution network, but I bet with you that of course this company – if there is any company out there that’s able to increase the margin, it’s The Swatch Group” – Nick Hayek, CEO Q410 conference call

Corporate Governance:

We have some niggling concerns around corporate governance, management capability and capital allocation at Swatch (although we do concede that some of these could be mistaken for the often-seen disdain from closely-held businesses to the short-term nature of today’s stockmarkets). Often, we actually see this as a ‘good’ sign as it shows that management are not swayed by short-termism rightly focusing on the longer term threats and opportunities. Nevertheless, we do note the following:

  • Swatch is moving from IFRS accounting to Swiss-GAAP with the CEO citing “over-regulation” as a key driver of the move
  • The company loaned the Chairman of a Hong-Kong based associate company (publically-listed Hengdeli) $100m for a personal loan collateralised by Hengdeli stock. Whilst the business is a strategic partner of Swatch’s, this is a small red-flag for us
  • The company sued Bloomberg over publication of investor conference call transcripts. Again, this may not be as big a deal as it seems but it does suggest that the company might not always think in the best interests of public disclosure to the benefit of outside shareholders. We observe that interviews only with the news media is not the best way for a CEO to communicate with shareholders
Lack of transparency in brand contribution:
  • The business is a highly varied mix of vastly different product portfolios (from $40 Swatch to over $1m Bregeuts) with very different profit drivers associated with each. The business discloses neither group gross margins nor profit contribution by brand. Thus, we have yet to determine whether the group’s overall profit is over-reliant on some of the niche, ultra high-margin prestige brands. For example, 10% of demand for the Bregeut brand comes from Russia. This lack of disclosure also makes understanding the recent higher margins we highlighted almost impossible.
  • For example:

Q: “I know, you do not publish the number, but I was just wondering if you – in terms of gross margin for the Group, is it fair to assume that you’re close to or around about the 60% level?”

A: “I have no idea. I have no idea, we are not publicizing these numbers. Because if we do it once, I have to do it all the time. You have to be satisfied with the numbers you see” – Q410 conference call Board Member Dr Thierry Kenel

Primer: A Unique Business Model

Few other luxury brands enjoy the support and synergies of an industrials business and this results in an unparalleled depth of experience and innovation vs. watch industry peers. The business employs centralised production and decentralised brand operating businesses (as shown in the appendix). Nivaros-FAR components are the ‘engine’ of the mechanical watch and a core part of Swatch Group’s unique know-how within the industry.

A proven innovator – Omega’s revival is a great example of this

From its inception, the Swatch group’s success was predicated on innovation: SMH (the name of the original business) was setup in 1983 to “re-establish technical superiority over the Japanese” who in the 1970’s had stolen a march on the Swiss watch industry with quartz-based watches. The original Swatch brand had itself a highly innovative design which reduced the component count from circa 150 components to 50.

A more recent example of innovation is found within the Omega business which in the 1990s acquired the commercialisation rights to the longstanding ‘co-axial’ patent – A revolutionary design replacing the traditional ‘lever encasement’ typically used in mechanical Swiss watches for hundreds of years. Most importantly, Swatch Group did not acquire a commercial-ready technology here, rather it effectively acquired a design and invested heavily (reportedly CHF100m) in order to commercialise the technology which was no mean feat given its complexity. Crucially, it was Swatch’s vision and not least its scale that allowed this to be achieved. This proprietary co-axial technology (which is not sold to third-parties) launched in 1999 and is today the key differentiator of the Omega brand – A brand which is now generating close to CHF3bn in revenues for the group and now a much-revived competitor of Rolex, its longstanding peer in the market. Such a rare commitment to innovation is what has really caught our attention in this group.

It is perhaps too tempting to look for analogies of Swatch in adjacent industries that also have great internal intellectual property and innovation. Apple and Nokia obviously come to mind, with positive and negative connotations in both cases. Another possible example is Synthes, the Swiss specialist medical device maker finally taken over last year by Johnson and Johnson.

The Brands (and is the CHF10bn sales target realistic?)

CEO Nick Hayek has pointed out in the past that if “everything went wrong”, the business could rebuild itself based on four key brands: Swatch, Tissot, Omega and Breguet. Fig.3 below shows our estimates of the contribution from the top-five brands (including Longines) based on comments by the CEO in recent years (rather than hard numbers).

Fig.2: Swatch Group – key brands estimated sales and their contribution

  Source: Swatch, Holland Advisors

Balance Sheet/Capital Intensity

From the (admittedly minimal) exposure that we have had to the company management via a few conference call transcripts and media interviews, we have gleaned that most of the ‘return’ discussions centre on profit margin objectives rather than on overall return on capital. The use of the balance sheet gets scant mention. The strength of the Swatch Group balance sheet is undeniable (net cash = 11% of market capitalisation today and averaged 10% in last 10 years). As, to be fair, is the long-term track record of return on equity shown in Fig.1 and in our appendix but it is also very clear that asset turns are deteriorating of late due to increased stocking. Inventory has been growing at twice (10%) the level of sales (5%) over the last decade as the company expands its store network. As we have observed earlier rising margins have thus far compensated. Group Investor relations makes the point that business has excellent balance sheet and is therefore effectively self-funding which – in their mind – means that capital allocation ought to be less of a concern to shareholders. That doesn’t really help us much!

As long as overall returns can be maintained, it is of course perfectly sensible to encourage reinvestment, the particular issues we are questioning are whether:

  1. Future returns might drop with the current rate of increased investment. In the short-term this would centre on a risk of excess inventory (stock) leading to discounting. In the long-run, the issue is whether asset turns decrease permanently, or margins could fade
  2. Will management make decisions cognisant of the impact on overall returns and alternative use of capital (i.e. possible return of capital to shareholders vs. an overpriced acquisition)

For context, the following are the key areas of reinvestment:

  • Internal production expansion

The Swatch group has experienced material constraints throughout its supply-chain in recent years and thus we expect that investment in production capacity will continue to grow.

  • Own-Store/retail distribution investment

Many of the best retailers typically ‘own’ the Point Of Sale and this has been particularly apparent to Swatch Group in the US – probably the group’s weakest region – where they are more dependent on independent retailers such as Tourneau. The consequences of this have been made clear by group management who have been publically scathing of the performance of independent US watch chains and fell out very publicly with Tiffany. Swatch group’s own stores are typically higher margin (though stock levels are much higher).

The company has commented that in the US, Omega’s own-store average selling prices released are twice the independent retailer’s and the margin uplift in recent years has been at least partly attributed to the increased mix of own stores which allows more control over such discounting. One can thus see why they keen to invest in own-store network.

Associate company (and Hong-Kong listed) Hengdeli is an example of the compromise solution for Swatch. Swatch group has an almost 10% equity stake in the Chinese distributor (the stake is worth about CHF1.2bn) which purportedly controls 50% of the Chinese luxury watch market via its chain of stores. This is arguably an efficient way for Swatch and other brands (LVMH is also a shareholder) to gain more control over a market for reduced investment and crucially receive feedback on market demand activity. In 2008, Swatch also acquired a stake in middle-eastern retail chain Rivoli for an undisclosed amount.

  • M&A/Brand investment

A broadening of the portfolio is maybe inevitable at some point for Swatch group. Swatch’s history is one of brand revival (most notably Omega and Tissot) or organic brand creation (Swatch and Flik Flak). Bregeut is arguably also a revival although it was an acquired brand in 1999. It is not clear what appetite Swatch has for further brand acquisitions although outright ownership might be more likely post the acrimonious collapse of the Tiffany joint venture (which is now disbanded and mired in legal suits). LVMH’s acquisition of Bulgari for €3.7bn or 28x EBITDA – not a use of shareholder capital we would be happy seeing Swatch Group replicate.

  • Share buybacks

Swatch bought-back CHF1.5bn in stock (15% of its then market cap) between 2004 and 2008 although such use of capital seems to now have been de-emphasised.

Valuation

Growth investors who feel that Swatch’s future annual growth rates in sales, earnings and book value per share are likely to match the levels realised in the past will likely be more than happy to buy the shares at today’s multiples of 11.6x EV/EBIT and 15.2x P/E. If future growth and careful capital allocation match the past they will be right.

Nevertheless, two issues stop us from also asserting this view.

  • Firstly, as readers well know we are self-confessed value-investors who love to own shares that will predictably grow but we are far keener to buy them when this growth is almost offered for free, thereby improving our margin of safety. Recent market re-ratings has meant that many ‘quality’ growth companies are now priced more expensively. A few notable exceptions remain across (American Express or Wells Fargo, whose growth we think is relatively assured, and yet still trade only on 8-10% earnings yields i.e. PEs of 10-12x). In this context, Swatch Group is no bargain, but like our other luxury goods sector pick, Coach, cheaper than many of its peers
  • Secondly, we have raised a few question marks around Swatch’s returns sustainability and capital allocation which suggest more, not less, caution should be applied to the current valuation. Greater transparency from the company (or indeed a ‘wobble’ in the share price) might afford a wider margin of safety and give us increased confidence to encourage investors to buy

Fig.3: De-rating reflects growth concerns while margins have risen

Source: Capital IQ, Holland Advisors

Conclusion

The group’s historic financials discussed in this note and shown in the appendix speak for themselves: they are the result of a resilient, high-return business that has identifiable barriers to entry and great historic record of innovation and investment.

On looking at Swatch more closely, we conclude that the business ought to be able to maintain its dominance within the global watch industry due to innovation, internally developed intellectual property and a resilient business model. Nevertheless, at the current valuation we need to be more certain on a few key points. The first is the sustainability of more recent higher margins as we have discussed. These could now be at a permanently higher level or vulnerable to a coming investment period, but current disclosure sadly does not give us the ability to distinguish between the two.

The closely-held and family controlled nature of such a company is something we often find highly attractive as it ensures a truly long-term focus in the business. But in Swatch’s case this could be a double-edge sword. We are very open-minded that the current generation of Hayeks could be just as adept at running this group as was their father and founder. However we feel that can only be concluded with greater openness about future strategy and attitude towards use of shareholder capital. A very long standing and elderly founder maybe needed not make such communication with his other shareholders’ as the proof of his ability and future intentions was clear to see in the company’s long history. That is not yet the case for next generation. A point we speculate may be missed by them.

In short whether Swatch will be a wonderful investment, merely a good one or even poor depends largely on how those that now control it see its future and are able to execute against that vision. The less they are prepared to share this with outside investors the greater margin of safety in buying the share we need to be given. We conclude Swatch was and likely is a great company, but we do not conclude it as a great investment – yet.

Andrew Hollingworth, Mark Power & Ramsey Craine

Appendices

App.1: The Swatch Group Corporate Structure (note financial disclosure is less granular)

Source: Swatch

App.2: Financials

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  1. Munger also uses the example of Lee Kuan Yew, the Singaporean leader as an example of the success of concentrated decision making. ↑
  2. The ‘Tiffany’ joint venture has since been disbanded. ↑
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When you access any other website by means of a link from this Website, you should understand that your access to that other website is independent of Holland Advisors (London) Ltd and Holland Advisors (London) Ltd has no control over the content of the website, nor does Holland Advisors (London) Ltd in any way endorse or approve the content of that website. In no event will Holland Advisors (London) Ltd in any way be liable to you or any other person(s) or organisation(s) for loss or damage (whether direct, indirect, consequential, special or other) for any use of any site linked to it by means of hypertext or otherwise. 9. Indemnity You agree to indemnify Holland Advisors (London) Ltd and its officers from and against any claim brought by third parties against Holland Advisors (London) Ltd and its officers as a consequence of your breach of the Terms of Use. Furthermore, if your use of this Website results in the need for servicing, repair or correction of equipment, software or data, you assume all costs thereof. 10. Intellectual Property Rights and Licence The copyright, trade mark or any other intellectual property rights in the Website and the Information are owned by or licensed to Holland Advisors (London) Ltd. You may download or print out a hard copy of individual pages and/or sections of this Website provided you do not remove any copyright or other proprietary notices. Any downloading or other copying from this Website will not transfer title to any software or material to you. You may not reproduce (in whole or in part), transmit (by electronic means or otherwise), modify, link to or use for any public or commercial purpose this Website without the prior written permission of Holland Advisors (London) Ltd. Any rights not expressly granted in the Terms of Use are reserved. 11. Operation of the Website You should be aware that the internet, being an open network, is not secure. If you choose to send any electronic communications by means of this Website, you do so at your own risk. Holland Advisors (London) Ltd cannot guarantee that such communications will not be intercepted or changed or that they will reach the intended recipient safely. 12. Privacy Any personal data relating to you will be collected, used and recorded by us in accordance with current data protection legislation, the Terms of Use and our Privacy Policy. You must read our Privacy Policy as it forms part of the Terms of Use. 13. Governing law The Terms of Use are governed by the laws of England and Wales and the courts of England and Wales will have exclusive jurisdiction over any disputes arising under them. 14. Waiver If you breach the Terms of Use and we take no action, we will still be entitled to use our rights and remedies in any other situation where you breach the Terms of Use. 15. Our details This website is owned and operated by Holland Advisors London Ltd. You can contact us at: Holland Advisors London Ltd, The Granary, 1 Waverley Lane, Farnham, Surrey, GU9 8BB. Updated and effective as of  31st March 2024
Disclaimer
Please read the following conditions of use of this website. This website is directed at high net worth experienced investors and institutional investors who understand the risks involved with the investments being promoted and it should not be relied upon by retail clients (as defined by Financial Conduct Authority). The information on this website is issued by Holland Advisors (London) Limited (hereafter referred to as “Holland Advisors”), a limited liability company (7431314) incorporated in England and Wales, which is authorised and regulated by the Financial Conduct Authority (FRN: 538932). This website is for information purposes only and does not constitute an offer or solicitation to buy or sell securities, funds or any other financial instrument. The information is directed inside the United Kingdom and is not directed at any persons in jurisdictions where it would be against local law or regulation.  In particular, information on this site is not directed at any person, partnership or corporation being resident in the United States of America. Holland Advisors disclaims all responsibility if you access or download any information in breach of any law or regulation of the country in which you reside. Information on this site The information provided does not constitute advice. Holland Advisors believes that the sources of the information in this website are reliable. However it cannot and does not guarantee, either expressly or implicitly, and accepts no liability for, the accuracy, validity, timeliness or completeness of any information or data (whether prepared by it or by any third party) for any particular purpose or use or that the information or data will be free from error. Holland Advisors does not undertake any responsibility for any reliance which is placed by any person on any statements or opinions which are expressed herein. Neither Holland Advisors nor any of its directors, officers or employees will be liable or have any responsibility of any kind for any loss or damage that any person may incur resulting from the use of this information. This does not exclude or restrict any duty of liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. All Information may be changed or amended without prior notice although Holland Advisors does not undertake to update this site regularly. Marketing Communications Documents on this site do not constitute investment research as they have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy. Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures. Fund Information Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation. Linked Websites This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. Indemnity You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information. Use of Cookies If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings. Copyright, Trademarks and Other Rights Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors. Governing Law You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.
Privacy Notice
This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at The Halt, Smugglers Way, The Sands, Farnham, Surrey, GU10 1NB.
Introduction
This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you. In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’. This notice applies to personal data collected through our website www.hollandadvisors.co.uk. Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.
Data Protection Officer
We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.
Personal data we process
1. How we obtain personal data The information we process about you includes information:
  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services
2. Types of personal data we collect directly When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:
  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive
3. Types of personal data we collect from your use of our services By using our website and our services, we process:
  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.
4. Our use of aggregated information We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity. For example, we may aggregate usage information to assess whether a feature of our website is useful. However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice. 5. The bases on which we process information about you The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category. If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data. If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information. 6. Information we process with your consent Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data. Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website. We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists. You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk. 7. Information we process for the purposes of legitimate interests We may process information on the basis there is a legitimate interest, either to you or to us, of doing so. Where we process your information on this basis, we do after having given careful consideration to:
  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so
For example, we may process your data on this basis for the purposes of:
  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so
How and when we process your personal data
8. Your personal data is not shared We do not share or disclose to a third party, any information collected through our website.
Use of information we collect through automated systems
9. Cookies Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date. They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered. They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors. Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them. Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate. The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website. 10. Personal identifiers from your browsing activity Requests by your web browser to our servers for web pages and other content on our website are recorded. We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution. We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.
Other matters
11. Your rights The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data. We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org 12. Communicating with us When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need. We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service. 13. Complaining If you are not happy with our privacy policy, or if you have any complaint, then you should tell us. When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint. 14. Retention period Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested. 15. Compliance with the law Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’). 16. Review of this privacy policy We shall update this privacy notice from time to time as necessary.

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