Swatch Group: half-year report 2019

With its 18 brands, a workforce of approximately 36,800 persons at the end of June. and close to 150 production facilities in Switzerland, the Swatch Group is the giant of the watchmaking world, a fully verticalized company, from production to distribution, that is present in all market segments. The Group just announced the key figures of the first six months of 2019.

With its 18 brands, a workforce of approximately 36,800 persons at the end of June, and close to 150 production facilities in Switzerland, the Swatch Group is a giant of the watchmaking world, a fully verticalized company, from production to distribution, that is present in all market segments.

The Group just announced the key figures of the first six months of 2019.

Net sales decreased by 3.7% to CHF 4,078 million at current exchange rates (-4.4% at constant rates). The operating result decreased by -13.0% to CHF 547 million compared to the previous year. Operating margin was 13.4% (previous year: 14.7%). Net income totaled CHF 415 million (-11.3% compared to the previous year) or 10.2% of net sales (previous year: 11.0%).

After the slowdown in the fourth quarter of 2018, sales in the first half of 2019 achieved very good levels, despite negative currency effects of CHF 29 million. In Mainland China, Japan and the USA, growth was very positive in all price segments. Sales in Hong Kong, an important sales market with attractive margins, suffered from political turbulence. This resulted in a double-digit decline in sales.

Sales in the Group’s own retail and e-commerce keeps recording positive growth.

In this first half of 2019, actions were taken against grey market dealers, especially in Europe, the Middle East, Eastern Europe and South America, even though this resulted in a short-term negative impact on sales in the triple-digit millions. The Swatch Group believes that, in the long term, this will lead to positive effects in the major markets.

Inventories increased slightly from the beginning of the year by 2.6% to approximately CHF 7.1 billion. The increase occurred in finished products and can be attributed to suspension of deliveries to grey market dealers.

The Swatch Group anticipates strong growth in the second half of 2019 due to continuing solid demand in the most important markets. The Group expects positive sales growth for the entire year in comparison to the previous year. swatchgroup.com