Good news from the Swatch Group: These are the Swatch Group Key Figures 2014

Some financial analysts already started to mope and to predict only a mediocre year 2015. I have different information to offer you: On the one hand side – as always my insider information – and today the official Swatch Group Key Figures 2014

 

Have a look at the official Swatch Group statement:

 

  • Gross sales for the Group exceed CHF 9 billion for the first time, a plus of 4.6% over the previous year, despite negative exchange rate impact.
  • Growth of 3.0% to CHF 8 709 million in net sales.
  • In the Watch & Jewelry segment, without Production, gross sales increase by 5.6%, and net sales by 3.9%.
  • Creation of over 2100 new jobs, of which 770 in Switzerland.
  • Operating profit of CHF 1 752 million and operating margin of 20.1% (previous year 27.4% including the one-time special effect of the compensation of over CHF 400 million related to the Tiffany case).
  • In the second half of 2014, deliberate increase in marketing investments in growth markets USA, Japan and Mainland China, with an impact of over 3 percentage points on the operating margin.
  • Net income of CHF 1 416 million, with a return on net sales of 16.3% (previous year 22.8% also including the special effect of Tiffany).
  • Equity increases to CHF 10.7 billion, equivalent to an increase in the previous year’s equity ratio of 82.3% to 83.7% in 2014.
  • Despite the currency turbulence, an unchanged dividend of CHF 7.50 per bearer share and CHF 1.50 per registered share will be proposed.
  • After a strong December 2014 in CHF, 2015 has started very auspiciously with a strong January, of course computed in local currency.
  • The strategically unique positioning of the Swatch Group, with its brands in all segments and a worldwide branch network with its own chains of stores, will allow the Group to generate high single-digit growth in local currency despite the highly overvalued Swiss franc, and at the same time earn continued healthy profits. The Swatch Group will continue to maintain its long-term strategy of investments in innovation, machinery, distribution, as well as in employees, and will also further expand its manufacturing base Switzerland.

 

Outlook for 2015

After a strong December 2014 in Swiss francs, 2015 started very auspiciously with a strong January, of course computed in local currency. With the decision of the Swiss National Bank on 15 January 2015 to abandon the Euro minimum exchange rate after three years and to introduce higher negative interest on current accounts, the negative exchange rate impact for 2015 was already anticipated; within a day the Swiss franc rose to parity with or even slightly higher than the Euro.

With its 20 brands, its own production and its worldwide distribution network, the Group is in a very strong position. Marketing investments and selling expenses in foreign currencies, or companies such as Harry Winston in the USA or Rivoli in the Middle East, whose costs are also recorded in local currency, absorb part of the negative effect of the overvalued Swiss franc. In addition, several Group brands are reacting with price adjustments of between 5% and 7% in select markets, which will also compensate for the very unfavorable currency situation.

The number of Swatch Group patent applications reached a new record again in 2014; this will be reflected in the numerous innovative product launches in all segments in 2015.

 

Now, what do you think? Does this look like as if someone should start to mope? In my opinion: NO! The Swatch Group is well prepared for a difficult year 2015. With the products in the pipeline I have seen so far, I am sure we will see something comparable being officially released next year at the same time…

 

And guys, here is my personal favorite statement taken from above:

  • Creation of over 2100 new jobs, of which 770 in Switzerland.

 

While others in the Swiss Watch Industry have again started to dismiss employees and started to introduce short-time-work, the Swatch Group again successfully swims against the current.

 

Dear Nick Hayek!

Dear management of Swatch Group!

BRAVO! Well done!

 

 

 

 

 

 

 

 

 

 

More from Alexander Linz

Baselworld 2014: The Alpina Alpiner 4 novelties

Alpina what?!?! You don´t know Alpina yet? So let me introduce you...
Read More

3 Comments

Comments are closed.