Swatch Group results 2015 and outlook for 2016

2015 was a difficult year and 2016 will be a very challenging one. These are the Swatch Group key figures 2015 I received this morning and an outlook for 2016 given by the group´s management …

 

You will find a link to the detailed report 2015 below the summary here. There you will be able to get some more insights and you will be able to read this:

Talking about Personnel …

“Again in 2015, almost 700 new jobs were created, mainly in the retail sector, for new stores. Swatch Group also slightly increased the number of personnel employed domestically, despite the very difficult situation with regard to the production base Switzerland. As a result, the number of employees increased to over 36 000 at the end of 2015.”

Talking about Training …

“The Swatch Group promotes vocational training at all levels and in all sectors, particularly for young people who wish to graduate as professional watchmakers or in related technical professions. In Switzerland, roughly 150 trainees were newly hired in various production and training facilities in the year under review. The number of trainees in Switzerland rose to approximately 470. Abroad, there are currently 160 trainees, of which Glashütte Original in Germany is training 90 apprentices. All 124 trainees who were in their final year in 2015 have successfully completed their training and 87% have started jobs within the Group.”

Talking about Investments …

“Across all segments, the Swatch Group invested a total of CHF 755 million in non-current operating assets in 2015. In addition to further expansion of its retail network, intensive investment was also made in production facilities. As well, significant investment was made in the area of customer service, both in Switzerland and in foreign distribution companies.”

 

Bravo!

Well done Swatch Group!

Well done Swatch Group management!

You create jobs, you invest in the future of watchmaking, you act as real entrepreneurs!

 

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Biel / Bienne (Switzerland), 3 February 2016

  • Net sales of CHF 8 451 million for the Group, 0.9% lower than the previous year at constant exchange rates and 3.0% lower than the previous year at current exchange rates. Calculated in euros, the Group grew 10.3%.
  • The Watches & Jewelry segment, including Production, generated net sales of CHF 8 177 million, -0.8% at constant exchange rates. Swiss watch industry exports of wrist watches declined 3.6% in 2015.
  • Despite the dismal currency situation, Swatch Group continues its successful long-term strategy of increasing prices only very defensively to insure volume growth.
  • Operating profit of CHF 1 451 million, equivalent to an operating margin of 17.2%. Mainly due to additional currency shifts also in the second half of the year, operating margin was about 17% lower in comparison to the previous year.
  • In the Watches & Jewelry segment, including Production, operating margin reached 18.8%.
  • Net income was CHF 1 119 million, 21.0% below the previous year, due to the strong negative impact of foreign exchange losses and the negative development of interest rates.
  • Equity increased to CHF 11.2 billion, equivalent to an equity ratio of 84.7%.
  • Dividend proposal unchanged: CHF 7.50 per bearer share and CHF 1.50 per registered share.
  • New share buyback program from 2016 to 2019 to a maximum of CHF 1 billion.
  • January 2016 shows positive growth compared to the previous year, especially in mainland China. The Swatch Group expects growth well over 5% for the entire year in local currency.

Outlook for 2016

Group Management expects, despite the ongoing challenging environment in various regions, a sustainable development in sales in local currency in 2016, based on worldwide ongoing very good consumption demand for Swiss watches.

With its worldwide distribution network, the Group is in an excellent position to provide its customers with an array of products, even when tourist flows and consequently purchase locations suddenly change, as was often the case in the year under review. The number of patent applications increased again in the year under review, not only in the area of electronic smart and mobile device products, but also primarily for watches and watch movements. Not only new products from the 20 brands, but also all current brand models which benefit from ongoing demand, will contribute to a good year in 2016. Particularly the new METAS certified antimagnetic Omega Co-Axial Globemaster collection, as well as various Swatch watches such as the Swatch Bellamy, launched in China, with its contactless payment function, will generate very positive sales in China and other regions. Also, the Olympic Games in Rio de Janeiro, Brazil, which start in August, will give the Omega brand, the official Games timekeeper, an additional boost. Tissot, through its long-standing partnership with the NBA, the North American professional basketball league, has become the official timekeeper for the NBA, the women’s basketball league WNBA and the NBA Development League, which will generate substantially increased sales for the brand, in both North American and worldwide markets.

Swatch Group, with its strong presence and pioneer role in countries such as China, Russia or India, will continue to generate dynamic growth in local currency in 2016. January 2016 confirms that particularly in mainland China, watch consumption rose strongly compared to the previous year, reason why, the Swatch Group expects growth of well over 5% in 2016 in local currency.

 

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>>> Click on this link to read Swatch Group: Key Figures 2015 – PDF document with more details

 

 

 

 

 

 

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7 Comments

  • Dear Hans, I am not so sure about your comments. If I look at trends in the high end watch industry and their Revenues achieved then your statement is totally wrong. There are still enough people who like a mechanical wrist watch and admire their beauty and craftsmanship.

    • Dear Thomas, young people today don’t use watch anymore, use Mobil phone instead. I work in an office with nearly 2000 people, only a hand full wear a watch and likely two are using an old faction mechanical watch as myself, if you go back 50 years every body were using watches. In the last teen years, I have only met one with a high end old faction watch, looks like watches are now dying breed and watch makers aren’t more needed. I have been in lot of watch shops around the wall,
      they told, people aren’t buying watches anymore and lucky if they sold one watch in a month.

  • It looks like they are playing poker with all their money, hoping for a big win next year thus wrist watches will soon go out of faction as iPhone as become the watch.

  • Papa Heyek taught his children well. Chapeau! Swatch Group is doing well given the economy of the world and the revaluation of CHF.
    Investing in the future is truly noble. Does CH have the equivalent of knighthood?

  • Would be interesting to know what are the revenues for their key brands like; Omega, Tissot, Rado, Longines and how they see the growth for each of their brands. Could imagine that they have more challenges with their high end brands like Breguet, Harry Winston then lets say Rado or Tissot? Or I am wrong?

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