S16 E07: Ilaria Resta, CEO of Audemars Piguet

Thank you.

Well, first of all, let me start by telling you that in 2025, we were extremely excited to celebrate the 150 years anniversary of our company, of Audemars Piguet, because it's a moment where we stop and we reflect on what has led us to where we are today, which is a very successful position. In all this context we can really define what are the strategies moving forward, in a way to give justice and honor our past. This anniversary felt in a moment of big disruptions. That in a way also helped us by giving us the opportunity and the means to think thoroughly about our future. That said, I honestly believe that 2025 was a year of disruption and we need to assume that uncertainty and vulnerability will be the new norm moving forward. The way I like to think about how to get ready in this context is, first of all, start by checking whether the strategies, the plans make sense for the long term. It's in a way a stress test, a torture test of the strategies, because normally strategies shouldn't change. We should assume that these are our guardrails and within those we develop our plans. That's the work that I've done with the team to ensure that the choices were the right ones. And honestly they are. We have been proving these strategies over the last two years when the biggest disruptions are happening. Given that, the second step is building a team that has the resilience and the agility to perform in moments of crisis. That's important and I've been working also in creating a new team with my colleagues, a new culture in the company. What came as a key learning and key opportunity in this context is hiring and recruiting and training people to be constantly learning, always mindful of what's happening outside, ears open, and make sure that the external context becomes an inspiration and not a barrier for growth.

Innovation is the soul of AP. Since we started, our founders really put an emphasis on going beyond the accepted norms of horological creations, and definitely the intent was the opposite of chasing trends. If we think about the manufacturing philosophy of our founders, it was all about protecting the ancient sphere of handmade crafts. So actually they went against the opportunity of the industrial revolution, of industrializing the production, and instead they chose hands over machines. But at the same time, despite this being extremely traditional as a way of working, AP at the same time always pushed forward with new ideas, new designs, ideas that were sometimes completely out of the norm of the moment where innovations were launched. So definitely never chasing trends, in a way setting for ourselves our own agenda. That's what we are after. And it's very important to separate and differentiate innovation from novelties and newness. We're not searching novelties as a mean. What we are searching is really an innovation that is meaningful, that makes sense for our clients who wear our watches. It could be an innovation that makes sense and creates an impact functionally, looking at the function of the watch, the mechanical complication, the movements, but also we look at the emotional impact of our innovation. At the end of the day, this is an object our clients wear not necessarily and only to indicate a time measure, but in reality they wear it because it gives them an incredible emotion. The emotion can be transmitted through different dimensions of innovation. There is definitely an aspect of aesthetics. There is an aspect of visibility of the movement. It's incredible how much people love just to see the components of the movement. There are certain parts of certain complications like the tourbillon that is honestly mesmerizing because it moves a bit like a heart of a human being. Then definitely there is a lot which has to do with the story of the movement. People who are passionate, our clients who are really into the mechanics of the watch, they love to understand how the movement was conceived. Especially when you come and visit us in the manufacturing and you will see the hands of the people assembling and developing these components, it's really the moment where you understand why I love mechanical watches.

I think it's the innovation we launched to celebrate the 150 years anniversary. It's a perpetual calendar as a complication. It's basically a calendar that gives you all the indications of the day, the date, for multiple years ahead without the need to adjust. It will recognize also the leap years as a complication. This complication is historical for Audemars Piguet, it's part of our history since the onset we have been doing perpetual calendars. But this year we launched a perpetual calendar that visibly doesn't show any change, but when you look at the function it's a real revolution, it's really breakthrough. Why? Because to set the functions of the perpetual calendar, you don't need to bring the watch to a boutique or you don't need to use very specific setting tools to adjust the functions. In reality, you can do all the adjustment through the crown, the same crown that you use to set the time or rewind the watch. That's a big revolution. Why? Because if you don't wear the watch for more than two or three days, the power reserve is exhausted and as such your watch needs to be rewound and readjusted. The problem is when you have multiple indicators on a perpetual calendar, then the issue is it's difficult to do it because you need to use such tools. Basically, it's a very intuitive and ergonomic innovation that allows every owner of a perpetual calendar to adjust all the functions by himself. I love this innovation because it really helps the living with the watch every day and allows people to wear it whenever they want it.

Well, you got it very well. Managing a family company brings in additional success criteria to the traditional ones of shareholder return. Definitely the financial health is a mean to a broader purpose in a company like Audemars Piguet. Of course, we need to be solid on our financials, but the mission is another one. The mission I receive from the board of directors and the shareholders is ensuring the perennity of the company as an independent, family-owned company. The idea is really, we are today actually the biggest family-owned company still in the hands of the founders, the family who founded the company, and that's for us a big pride. We want to keep this governance forever. To do so, we need to make the right choices, make the right investments. The investments we make are a lot related to ensuring the foundations are solid for the future. I give you examples: we invest a lot in training, in hiring watchmakers, in developing the watchmaking skills. We invest also in technical schools because it's important that students can have access one day to watchmaking. These investments are not only for Audemars Piguet, these are investments for the entire community. We invest in innovation labs. We just created what we call the Fab Labs, the fabrication laboratories, which are basically conceptual laboratories to prototype future innovations that might see the light in 10, 15 years or even longer. The horizon is really extremely long-term. But also the breadth of investments goes beyond Audemars Piguet strictly. We invest a lot in the industry to make sure that mechanical watchmaking is a destination for people who want to work in this industry, but also keeps being a desire for people who one day will buy a watch. This year, for the celebration of the anniversary, we created exhibitions in many big cities around the world, and these exhibitions were not to portray only Audemars Piguet. The intention was free access to an exhibition to everybody who is interested in understanding and learning about mechanical watchmaking. For me, we are looking at plans that go beyond the next 15, 20 years. I just worked with my team and colleagues at Audemars Piguet on the plan for 2040, which you think about it, it's really far away, but for us it's kind of midterm and not even long-term.

Well, we were born there 150 years ago. The reason why we were born there is because people fled to France. They fled to find freedom, to find a place where they could express themselves. And Le Brassus at the time, and it is today, is quite far from Geneva. At the time, the distance was even bigger given the lack of means of transportation that were very accessible, in the winter time especially. People who moved to live there focused their winter time, when they were closing their houses, not much more to do outside, to really perfection the fabrication of small components to then assemble watches. This was driven by the constraint of the weather and the difficulty in a land that didn't offer much more than cows, there was not much more in terms of natural resources. That has in a way trained this resilience, the spirit of freedom as well of the people working there, that is so close and so intrinsic to our culture. We want to preserve that, that's why we stay close to our roots. We have a museum there, on the same foundations of the houses of our founders. We basically live and work in the same street where 150 years ago our colleagues were working. For us it's extremely important. I personally go there all the time I'm in Switzerland. For me it's important to work closer to our watchmakers. Indeed we have just inaugurated The Arc, which is the name of our new manufacturing site in Le Brassus. The intent was indeed to bring all the different ateliers around the lake under one roof because our philosophy of production has evolved and we realize how much is important to follow the entire flow of production of our watches throughout the different stages of development, from the initial conception all the way to the assembling and shipping of the watch and quality controls. All this when it happens under the same roof allows people really to collaborate with one another and to spot opportunities and improvements in the production. Honestly it fosters creativity because when we look at the best ideas, the best innovation we launched, they all came from the coffee area, from discussions among our watchmakers, our people who challenge each other. These people have amazing passion, we all have passion for watches. We talk about watches even in free time because that's what nurtures our purpose. That's why we like to have everybody under the same roof at The Arc.

Indeed it is, and we cannot separate the two. We have created a place that blends different types of savoir-faire and expertise in watchmaking, because yes indeed there is the mechanical part, but there is also the decoration part which is critical for us. We have certain expertise that exists mainly thanks to watchmaking, and this expertise requires constant coaching and training. That's why we like the proximity of more senior people, more expert people, with young generations who come in and work for us or come to learn watchmaking.

Well, I can confirm that also in a tough year like 2025, Audemars Piguet managed to continue growing in terms of revenues. But what's more important, we grew in terms of appeal and interest among younger generations, which is a proof of perennity, of the relevance of a brand like Audemars Piguet. Certainly we need to continue earning this relevance at each generational change, but we serve at the same time four different generations of clients, and these four generations are very different from one another. If you look at how much the Gen Zers are interested in understanding the behind-the-scenes, the production of the watch, it's important for us because we know how to serve them. We know how to engage with them, and that's a very different type of engagement that we have with the other generations. So for us to stay relevant and to keep desirability high, it's all about listening, observing, and knowing our clients. It's paramount and we at Audemars Piguet are very strong in that sense because we own our distribution channels. Our boutiques are managed by us. We have direct contact with our clients and we serve every year clients that we know extremely well because we focus much more on the understanding of our clients we serve rather than just the transaction of selling a watch. That's extremely important because when you know your client, when you know the rituals they have, it can help the serving ceremony, the selling ceremony. When we know the reasons why our client wants to buy a watch, either for themselves or as a gift, then we can really better serve them. In terms of innovation, we do complications. For us, spending time with our clients, talking to them, is a precious asset to ensure that the ability stays alive. Then we have platforms like music or art, which are platforms of passion for Audemars Piguet, that is where we meet the passions of our clients. Simply by joining a music event we have a chance to share emotions with our clients. That's extremely important because the moment you have an emotional connection with your clients and you share a passion together, that's the moment where the biggest insights, the biggest ideas are created. In fact, our clients talk about us as the AP Family. It's a very intimate definition of who we are. For them, they feel at home when they come visit us. They feel they are part of the family. That's where the concept of the AP House was born. The AP House was really much more than a retail space. Certainly we have boutiques but then we have a space, the AP House, where we welcome our clients to spend time with us outside of the rigid setting of a boutique. We have in some places a ping pong table, we have a pool, or a music corner. It's truly a space where people come just to have a coffee and talk about anything else but buying a watch. Then certainly watchmaking is a common interest we share with them. So it's impossible not to talk about it. But very often these houses become a place of encounter among our guests. We have an example of a couple who met at an AP House and then ended up getting married.

We are matchmakers. Absolutely. It's a shame I was not invited to celebrate. Better than myself, I wish! But hey, we can launch a new service here today. Just an idea came by talking about it. No, but jokes aside, it's incredible because you put around the table, around the couch, different people who don't know each other, they just happen to be in the AP House in the same moment, and then a friendship is born. It's magic. These emotions cannot be captured in a transaction. They go well beyond. And that's how we stay relevant, because at the end of the day we serve emotionally each generation that gets in touch with us.

Let me tell you that the tariff was definitely one of the many shocks that we had last year, because on one side indeed the tariff, which represents an additional cost for us, but also don't forget the cost of the price of gold that rose and keeps on rising as we speak. And for us what matters also a lot is the fact that we have a currency, the Swiss franc, which is appreciating considerably towards other currencies. So if you only look at these three, it's a massive, massive impact on our costs. That's what we're going through this year. The lessons were all about how do we adjust towards this unplanned and unpredictable cost, because in all honesty nobody thought that this would have happened. We didn't budget for it. So definitely the first lesson is stay agile. Make sure that you have contingency plans for the worst-case scenario, which we had indeed, on everything, on the tariff, on the gold, on the appreciation of the Swiss franc. At the same time, always find a buffer of growth and ensure that you have a diverse footprint by regions. That helped a lot on the currency devaluation, for example. I must say that we are diverse, but we push diversity even further and we will have in fact new openings in the future to ensure that we are not overly exposed in one region over the other. That's also, by the way, the lesson of China, that has posed an important threat for many companies that were overexposed to China, which was not the case for us. And then the other thing is again innovation. Make sure that even in a tough context like the one of 2025, even despite all the extra cost, keep bringing novelties. Don't cut costs by cutting the experience or the innovation. Rather, cut the additional costs that are invisible to the client. This is a massive work we had to do on back-office efficiencies. But in all honesty, we didn't cut any corner when it comes to offering the best experience to our clients or the best product. Actually the opposite, we went even further. We invested more in exhibitions, in new events, in improved AP Houses. So paradoxically, which is counterintuitive, we invested much more and we did even more in such a tough context.

Well, let me start by saying that the Royal Oak, although indeed was a wonderful watch, did not become an icon because it was designed with that objective in mind. Actually, it was designed in the worst possible moment for the industry. It was back in 1972. At that moment there was the explosion of quartz watches, watches that were extremely reliable in terms of timekeeping, much cheaper, much faster and easier to assemble. It was an earthquake for the industry that led to two-thirds of the companies to disappear. It was really impactful in that context. When Gerald Genta designed the watch, the obvious answer would have been to follow the trend of the market, to make sure to adjust to the new landscape of competitors. In reality, the Royal Oak did exactly the opposite. It was a true disruptor in the industry. It basically broke every single code of watchmaking. If you start from the shape, the octagonal bezel with the visible hexagonal screws which characterize the Royal Oak was quite unique in that context. The material, because Royal Oak was conceived to be produced in steel, in stainless steel, which was outrageous in a context where watches in the luxury segment were mostly in gold. The price, it was at the same level as gold watches. And last but not least, I mentioned because the watch was much bigger than the standard of the time. It was 39 millimeters, so that it was nicknamed 'Jumbo', so big it was compared to the reference in the market. You put all these elements together and you brace for disaster, right? You think this is not going to work. And in reality it shook up the industry. It was a luxurious sport watch with a very unique positioning, with many contrasts. If you ask me what is really the thing that makes the Royal Oak so special, it's the fact that it constantly chases contrast. There is the contrast of light, you have these edges, the contrast of materials, the fact that it looks industrial yet is refined to the minimum level of details, it is sporty and elegant at the same time. It's not obvious to catch with one word. That's in a nutshell what the Royal Oak is for me. After time it was adopted as truly an icon, and now actually it proved to be very flexible in terms of design, because sometimes an icon you cannot touch it, you need to keep it as it was conceived at the beginning, the same color, the same material. In reality, the Royal Oak was extremely versatile as a platform of innovation. We have done Royal Oaks in different materials, with different finishings, different dials, but it remained uniquely a Royal Oak. I think you can spot the difference when somebody is wearing a Royal Oak. The bracelet is very unique. The shape is unique and it has a witty character.

Well, the Concept, which is a bit younger than Code in terms of year of birth, was really born actually to be a one-off, a watch meant to host the innovation of Audemars Piguet. It was basically a test watch to push the boundaries of a movement or materials to the maximum level. And then it became a huge success because what our clients saw in the Concept was truly the summum maxima of innovation for Audemars Piguet. It was really extremely edgy in what we managed to do in terms of movements and complications, but also materials like recently the forged carbon. It took a very specific space in the portfolio of Audemars Piguet and when we launch something extremely innovative, never done before, normally the house where we do it is the Concept. That's the role in the portfolio for Concept. Code 11.59 was born to serve a specific clientele. It has this timeless elegance. At the same time, it looks simple like a round watch, but in reality it's much more than a round watch. The case is extremely complex, multifaceted. The sapphire that covers the watch is double-edged curved. So it's a very complex watch, elegant at the same time, and is definitely talking to clients that are looking for a more edgy classical but forever relevant watch.

Well, you mentioned women, younger collectors. Indeed, we are seeing a rise in interest among these two client segments, women and young generations, an interest for mechanical watches. And actually it's interesting because the average age of first-time purchase of a mechanical watch is going down, which proves how much the younger generations are understanding and loving the soul of mechanical watches. They understand the complexity and they reward Audemars Piguet in terms of interest, thanks also to our edgy positioning and the desire to keep on being young and innovative. Women is the fastest growing segment for us. And in general, if we look at the macro trends in overall mechanical watchmaking, we expect women to represent 40-45% of the mechanical watch market by 2035. So there is definitely a common interest of watches from men and from women. Our strategy is to ensure that we balance our existing client segment, but at the same time we are opening the door to women and younger generations. There is a misconception that women are interested in certain types of watches, which is by the way a false myth. Women like complications as much as men. The only issue was that complications were not available in smaller dimensions. Hence women couldn't access certain complications. In fact, this year we have launched the perpetual calendar, which is a very important complication, in a smaller diameter, in 38 millimeters, which can fit nicely on a woman's wrist. And by the way, the most important change we are bringing to Audemars Piguet is we are no longer segmenting our products by gender. We do not talk anymore about women watches, men watches. This is a wrong vocabulary that is actually feeding a narrative that doesn't correspond anymore to the way women or even men see themselves portrayed in terms of preference. We used to say watches are the jewels for men. In reality, men buy happily jewelry the same way women buy, and likewise women like to adorn their wrists with a watch. This is a very old, schematic, and superficial segmentation that we no longer use. And thanks to that narrative, actually, this year, women have been representing for us the fastest growing client segment.

That gathering was quite an experiment for us because we wanted to sit together with a group of women with different backgrounds, different nationality, different profession, and also different types of knowledge and interest in watches, just to understand where they are in terms of insights, motivations. We didn't talk only watches. The idea was not to do a brainstorming on watchmaking. Not at all. It's very difficult out of such narrow sessions that you come out with anything interesting and deep. Instead we spent time very informally to share our passions, to discuss around the table. Definitely there was a lot of watchmaking but not with intent to brainstorm on ideas but rather to stimulate a dialogue on why this object is relevant for you. What do you look for? What triggers emotions. The best way to create relevance again is to talk at an emotional level. If you go functional and if you talk features of a watch, you don't get very far. So the intent was really to create a community, which by the way we created, of friends, extremely informal dialogue where critics can be raised, suggestions. It was really a round table of thoughts that inspired us a lot.

When we choose brand ambassadors, or we call them friends of the brand in most cases because they truly are our friends and they see us truly as their friends and we have this very intimate relationship. First of all, we start by choosing people that align with our values. It's a very difficult choice because we have a complex character. We are not easy in the sense that we are multifaceted. We are witty, we are serious, obsessed about details, innovative. Finding somebody that matches all the Audemars Piguet values and culture is extremely important because we want to be aligned in purpose. That's what we did by choosing the ambassadors. We have like Serena Williams who has been a friend of the brand for many, many years. Once we find the right person, then the relationship normally starts from a common passion, which is the passion for watchmaking. We want our people, our ambassadors, to be close to our interest and desire to push watchmaking quality and innovation further. These dialogues are important for us but they need to be grounded on this common passion. Serena was always passionate and is passionate about watches. We like to hear her stories and desires. We had been accompanying her throughout her career and now as she jumped into a new chapter of her life, we love the idea of continuing doing projects together. But again, the key lesson and the key takeaway is alignment on values and cultural traits.

Yes, everything we do fits with the overall mission of pioneering time and continuing to open the doors of mechanical watchmaking to people and not only to clients. This is the overarching line that we keep preserving and that helps us also choosing what we do, the events that we like to do. The House of Wonders specifically fits very nicely this mission to open the doors of Audemars Piguet to people who are not only our clients. It's extremely important. As I said before, we are here for the next 150 years and to be relevant we need to create interest in watchmaking and to do so you need to explain watchmaking because it's not obvious to buy a mechanical watch when you can see the time on your phone. We need to go beyond the functional need, which by the way theoretically doesn't even exist. We need to talk to a passion that goes into an interchange of culture, art, history. That's what watchmaking is today. And that's what we did with the House of Wonders, which was a massive investment also in terms of time of our people, because we had watchmakers from Switzerland to explain movements around the world. That was an investment needed to create passion and to understand us. On the other side, you mentioned Montreux festival or Art Basel, these are not traditional sponsorship events. These are rather for us gatherings where we like to foster our creativity and are a sort of exchange platform with artists. In both cases, Montreux but also music and art in general are genuine interests of our people. Our colleagues are really interested in these two fields because watchmaking is in a way an art field and we like to cross-fertilize creativity and ideas with artists, being them in music or in art. We often bring those artists we work with to Le Brassus to talk to our watchmakers and together they talk about the creative process, which is indeed leading to different outputs but sometimes is extremely similar in the frustration or in the surprises of creativity. Very often in both cases one of the learnings has been the best ideas sometimes are happy accidents. They just come by mistake maybe or as an unplanned outcome which was not conceived at the beginning of the process. Another learning which I found extremely precious and I keep all the time is never start breakthrough innovation from a brief. You cannot ask people, okay, develop something which is really breakthrough, it's never going to happen. It happens by chance, it happens because all of a sudden somebody has an idea from a conversation, from a frustration for a certain feature. That's extremely important. And for me the last lesson is don't time the innovation. Never put a deadline to the creators to say by this date you need to have a certain thing developed. That's the same for artists that work in the field of art or music. Inspiration is critical. That's what we find extremely interesting when we put together artists from different worlds. That's where we understand how we can really foster the creative process better.

Well, first of all, stay tuned because we will have in the next few weeks some interesting product launches, quite surprising and breakthrough, that will be still inscribed into this story of pioneering time. Then we will continue on the journey of opening the doors of Audemars Piguet to more people. We will participate in April to Watches & Wonders in Geneva. This is the first time we participate to such an important watchmaking event at large. And the way we will participate is with the same philosophy of education, entertainment, and cultural connection with everybody who's interested in learning more about Audemars Piguet and watchmaking. We will actually also open during Watches & Wonders, and then we will stay for three months further, the AP Lab. It's a format quite innovative because it's not a retail space. We do not sell watches there. It is truly a laboratory of learning where people are invited to come and understand the movement, how it works, have a chance maybe to assemble a simple part of the movement, try some watches, and talk to watchmakers. It's a truly elaborative engagement. Typically students, kids, everybody loves it. It's extremely interactive and playful. And we will launch on a broad scale a program of master classes for people who want to really learn the theory or the practice of watchmaking. We will open up lessons with our watchmakers with different levels of expertise depending on the desire of the person. We will open new boutiques. Actually we have launched a new concept for the boutique which is inscribed again to the same philosophy of opening the doors, where people can enter the boutique, see some timepieces, and have an exchange with our people, with our boutique managers, without necessarily sitting at the table and buying any watch at all. It's really a space for exchange.

Ah, that's a tough question. But choosing for a woman, I carry on thousands of luggages. Okay. Well, I have to go for the Audemars Piguet perpetual calendar watch. Why? Because it makes sense if I have no other way to tell what time it is and I cannot adjust it. Actually it's the only tool to be always on time, to know which day it is or which month, which week of the year. So all the information will be there for the next hundreds of years. I think I can survive on the island forever.

Thank you.