Swatch Group 2023 Results Show Solid Growth of Sales, Positive Outlook for 2024

Following the announcement in July 2023 of its half-year results showing an impressive growth of 18% in sales, Swatch Group has just issued its key figures for the entire year 2023. The Biel-based conglomerate, owner of brands such as Omega, Longines, Tissot or Breguet, reports sales up by 12.6% at constant exchange rates, or 5.2% at current rates to CHF 7,888 million. Despite a slightly slower pace during the fourth quarter of the year, which might indicate a switch in the overall state of the business and industry, the Group remains positive in its 2024 outlook and expects “excellent growth prospects” for the year to come. 

While not reaching the pre-pandemic sales levels – the Group reported sales of CHF 8,475 million in 2018 – Swatch Group can report strong sales in 2023 with close to CHF 8 billion turnover. That being said, the group also indicated a huge exchange rate impact and a challenging currency environment, with a hugely negative currency impact that accounted for CHF 554 million or 7.4% and thus weighed on profitability accordingly. As Swatch Group indicated: “The rapid erosion of major currencies against the Swiss franc could not be offset by continuous price adjustments.”

Sales for the entire year of 2023 have been up by 12.6% at constant exchange rates, and the segment’s export figures were up by 11.9% at the end of November 2023, above those published by the Federation of the Swiss Watch Industry, at +7.9%. This confirms the market share gains of the Group’s brands, specifically helped in the lower price segment thanks to Swatch. Yet, the second half of 2023 showed slightly less intense growth than the first six months of the year, as sales grew about 8% in the fourth quarter in local currencies. Profitability follows approximately the same evolution, with a net result reported at CHF 890 million, up 11.3% compared to 2022.

As for the local markets in Asia, the group reports double-digit growth in Hong Kong, Macao, Thailand, India, Japan, and China. Europe posted single-digit sales growth, though sales skyrocketed in Switzerland with a rise of over 30%. In North America, the strong growth trend continued, with Omega, Tissot and Swatch brands breaking records. The Group reports continuous demand for the Moonswatch and the positive impact of the Blancpain x Swatch collaboration, with Blancpain stores unable to meet the demand for original Fifty Fathoms models and a strong increase in traffic.

The previous year, Swatch Group also reinforced its investments, which have doubled to CHF 803 million – mostly in production equipment and retail properties. It also reports the creation of 1,541 additional jobs, of which 802 are in Switzerland. An important figure for the group has long been its inventories, which continue to remain extremely high at CHF 7,309 million (about 92% of the 2023 sales) and up by CHF 436 million in the categories of raw materials, work in progress, and semi-finished goods. The group explains this to be a conservative position as “safe-guarding production with sufficient raw materials and components is a top priority for the Group (…) to meet demand for the brands at times when there are bottlenecks in the delivery of individual materials“.

Despite a challenging environment expected in 2024, Swatch Group “anticipates excellent opportunities for further growth in local currencies in 2024“, with the lower and medium price segments (Swatch, Tissot, Longines, etc.) expected to account for most of the growth. Omega is also expected to have strong visibility as the official timekeeper of the 2024 Olympics. Yet, like in 2023, the Group expects exchange rate movements to continue to impact its results due to its strong industrial base in Switzerland.

For more details and to access the full report, please visit www.swatchgroup.com.