Swatch Group: positive half-year report 2017

Swatch Group: positive half-year report 2017. The Swatch Group announced positive results for the first half of financial year 2017 with group net sales of CHF 3,759 million (+1.2%) at constant exchange rates or CHF 3,705 million (-0.3%) at current exchange rates. The outlook for the second half-year of 2017 is positive with many new product launches and growth of the own brands, not only in value but also in volumes.

The Swatch Group announced positive results for the first half of financial year 2017 with group net sales of CHF 3,759 million (+1.2%) at constant exchange rates or CHF 3,705 million (-0.3%) at current exchange rates.

Performance in Watches & Jewelry, especially in the upper segment, was very positive with sales growth of +2.9% at constant rates in the Watches & Jewelry segment (excluding Production).

Sales performance in local currency varied, depending on the region. Mainland China recorded significant growth. Sales in Hong Kong stabilized. Japan showed a mixed picture. Sales to local consumers were very positive, while sales to Chinese tourists decreased due to the negative currency situation. Positive sales also in the Middle East. In Europe, sales of the brands increased compared to the first half of the previous year, especially in Great Britain, Spain, Italy, and Switzerland. The North American markets showed growth in local currencies, especially in the Group’s own retail although with conversion of sales at the weak USD rate, no growth remains in CHF.

Wholesale has started to regain trust in many regions, thanks to the good consumer mood and the positive results achieved in the Group’s retail business.

Production, which is integrated into the Watches & Jewelry segment, recorded lower capacity utilization than in the prior-year comparative period. Particularly third-party brands are still insecure and delay orders. Conversely, Group brands increased orders compared to the previous year.

Operating margin in the Watches & Jewelry segment (excluding Production) increases by almost 25%, from 10.7% to 13.2%, despite negative currency impact. If you include Production, the segment achieves an operating margin of 11.8% (previous year: 11.2%).

Operating result increases by 5.1% to CHF 371 million, despite retention of production capacities for third parties and workforce. Operating margin grows from 9.5% in the previous year to 10.0%. Net income increases by 6.8% to CHF 281 million with a net margin of 7.6% (previous year: 7.1%).

The outlook for the second half-year of 2017 is positive with many new product launches and growth of the own brands, not only in value but also in volumes. swatchgroup.com