In brief: I liked what I saw and what I heard. If you wish to share my thoughts I invite you to read my comment.
The Swatch Group press conference took place in in Grenchen / Switzerland. Meanwhile I am in Paris since today Hermes and Jaeger-LeCoultre will present a novelty here. After a nice dinner and just before going to bed I quickly wanted to finish my work I started in the plane whilst flying to Paris.
During the press conference Nick Hayek, he is the President of the Executive Group Management Board and member of the Board of Directors, outlined once again the real strength of the Swatch Group. And, he did not talk about its immense financial resources and the very good results of 2012, since Dr. Thierry Kenel, responsible for Corporate Finance / Reporting, Investor Relations, did this before. Nick Hayek talked about the real asset of Swatch Group toady, its stunning manufacturing power. No other group has such a perfect industrial set-up. Today Swatch Group acts more or less independently when it comes to the production of quartz and mechanical watches in any price range. Price range is a good point, since Swatch Group is beside a few others the only company to produce affordable watches in huge quantities. Just think of the tremendous success of Certina, Longines, Tissot and Swatch. One could even go so far and formulate: The Swatch Group hast no real competitors in the entry and middle price range.
Nick Hayek never stops to articulate that this is a lucrative and also important segment and that he does not understand why any other big group is doing any afford to be present in that field. Outside of Swatch Group I would spontaneously name Alpina, Frederique Constant (both in private hands, belonging to Aletta and Peter Stas) and Oris (also privately owned by Ulrich Herzog) are the only real Swiss competitors in that field. Nick Hayek pointed out that Swatch Group in 2013 will again invest some 400 to 500 million Swiss francs in the industrial growth of the group. “We are entrepreneurs we try to expand our business year by year, we build new factories, we create as many jobs as we can every year and we educate and train our employees as much as possible and we are not doing what we are doing for the benefit of any share holder value.” Please remember also one thing: During the big crises in 2008/2009 the Swatch Group did not dismiss a single employee, while other big groups and watch producing companies dismissed hundreds of even highly trained personnel as well as real specialists.
ETA and Nivarox, the two companies at Swatch Group mainly responsible for the production of quartz and mechanical movements, today define the industry standards. The new-implemented technologies will help Swatch Group to stay the industry leaders and to be very competitive even when producing in Switzerland where salaries are quite high.
Nick Hayek furthermore pointed out that “Swiss Made” must stay a reliable quality label consumers all over the world can trust. “If I read ‘Swiss Made’ it must be Swiss and not only assembled in Switzerland”, Nick Hayek said. You might know that today when achieving 51 % of added value in Switzerland you can call your product “Swiss Made”. Nick Hayek would like to increase that quota up to 80 % if he could. “Take our Swatch, that watch is 100 % Swiss made”, he said today.
Omega for sure is “Swiss Made” and Omega is the quickest growing brand in that segment. Nick Hayek is happy with the growth and earnings achieved in 2012 and he assumed that Swatch Group will grow some 5 to 10 % also this year, even when the global basis for 2013 are not as optimistic as they could be.
My summary of the presentation of the annual report of the Swatch group today in very view words is the following: The Swatch Group is a very healthy company that reinvests huge sums of its earned money to improve its technology and production capacities. The group management board under the leadership of the family Hayek acts clever and prudential and like a real entrepreneur. It’s the development of the group that counts, it’s the human resources that count and not the shareholder value. The industrial power of Swatch group and its manufacturing capabilities are just stunning. Just one little example: ETA produces 14 million components a day. So you don´t need to wonder if I tell you that Swatch Group meanwhile represents in terms of the quantity of watches exported out of Switzerland 75 % of the exports of the entire Swiss watch industry.
These are photographs I took during the press conference yesterday…
You see a series of pictures showing Nick Hayek (left) and Marc Hayek just before the press conference started… Everyone on the podium had wear the brand new Swatch model that celebrates the first 30 years of Swatch. So Nick Hayek gives one to Marc Hayek and he puts it on only after inspecting it first carefully… 🙂
This pictures shows you Marc Hayek, who is a member of the Executive Group Management Board and responsible for Breguet, Blancpain, Jaquet Droz, François Golay, Simon Et Membrez, Swatch Group Panama, the Carribbean, Central and South America, showing his Blancpain and the new Swatch
Also among many others attending the press conference …
Walter von Känel, CEO Longines
and Matthias Breschan, CEO Rado, Hamilton, Swatch Group Austria, Swatch Group Mexico
Agreed this was interesting especially Mr. Hauek’s comment on moving from 51 to 80%… Only time will tell.
80 % would be great and a real statement… It is to easy to achieve the 51 %. Now the Swiss at least discuss to raise the percentage up to 61%
Good report. Thanks Alex.
Thanks Ariel for your feedback!
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