After two years of consecutive decline and an overall negative mood over the watchmaking industry, it seems that 2017 could be the pivotal year for the watch segment – at least for Swatch Group, as we have seen that Richemont Group 2016-2017 results were showing again a decline. In its Half-Year Report 2017, Swatch Group contains a number positive indicators, including slightly increased sales and mainly, a reinforced profitability, with a strong increase in operating margin and net income. Overview.
While the 2016 Annual Report of Swatch Group was showing signs of decline, with sales dropping by 10.6% and profitability massively decreasing, with 47% less net income than what the group achieved in 2015, the 2017 Half-Year Report unveiled by Swatch Group today is showing signs of recovery. Overall, the Biel-based powerhouse, which includes brand such as Omega, Breguet, Blancpain, Jaquet Droz, Tissot, Longines and many more, has positive results for the first half-year 2017. All indicators are positive, from sales to profitability. Thus, if this trend continues over the year, it could well be that 2017 can be seen as the end of the recession, at least for the Swatch Group.
Here are some of the numbers for Swatch Group Half-Year Report 2017:
- Group net sales: +1.2% at constant exchange rates, of CHF 3 759 million, or CHF 3 705 million, -0.3% at current exchange rates. With the Swiss Franc being rather strong these days, exports are not very favorable, yet the group manages to create growth.
- Sales growth: +2.9% at constant rates in the Watches & Jewelry segment (excluding Production). Sales for the whole segment, including Production +1.2%, adversely affected by low Production sales to third parties. While the Swatch Group sales of own brands are good, the sales of movements and parts to third parties are still rather low, showing that the watchmaking industry has not yet entirely recovered.
- Operating margin: in the Watches & Jewelry segment (excluding Production) increases by almost 25%, from 10.7% to 13.2%, despite negative currency impact.
- Net income: increases by 6.8% to CHF 281 million with a net margin of 7.6%.
Source: Swatch Group. The complete Half Year Report 2017 can be read here.