SINGAPORE (July 27): Swatch Group, the Swiss watch and jewellery manufacturer, has announced earnings of CHF 281 million ($400 million) for 1H17 ended June, 6.8% higher compared to CHF 263 million in the same period last year.
Group net sales rose 1.2%, at constant exchange rates, to CHF 3.76 billion, compared to CHF 3.71 billion in 1H16. However, considering current exchange rates, group net sales saw a 0.3% decline to CHF 3.71 million.
Swatch attributed the growth to the strength of its 20 brands as well as its “well represented” retail global network. Mainland China recorded significant growth while Middle East recorded positive sales. In Europe, sales of the brands increased compared to the first half of the previous year, in Great Britain, Spain, Italy, and also Switzerland.
The Watches & Jewellery segment saw sales growth of 2.9% at constant rates. But sales for the whole segment, which includes Production, grew just 1.2%, adversely affected by low production sales to third parties.
Operating margin in the Watches & Jewellery segment (excluding Production) increased by almost 25%, from 10.7% to 13.2%, despite negative currency impact. The Watches & Jewellery segment, including Production, achieved an operating margin of 11.8% from 11.2% a year ago.
Looking ahead, Swatch expects “very positive” growth in local currency in 2H17. In addition to its strong retail business, wholesale should also develop positively, due to the gradual dissolution of uncertainty among individual distributors. In addition, further growth will generate improved capacity utilisation in all production areas.
Shares in Swatch closed at CHF 369 on Wednesday.
