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Swatch Group announces 8.7% growth in H1

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Swatch Group’s gross sales for the first half of 2013 were CHF4.2 billion (£2.9bn), up 8.7% on the first half of 2012. Watches and jewellery recorded a year-on-year increase of 9.1% in the first half of 2013.

The group’s Half-Year Report 2013, which published today, stated that gross sales for watches and jewellery were CHF4 billion (£2.8bn) and net sales were CHF3.9 billion (£2.7bn). The strong performance from the watch and jewellery segment, which now includes production activities, was said to be driven primarily by the brands. Swatch Group’s watch brand portfolio now comprises 20 brands.

In relation to the watch results, the group has now integrated the production segment into the watches and jewellery segment. This was based on the fact that brands are increasingly working closely with, or are even integrated with, specific manufacturers and production units within Swatch Group so it is becoming increasingly difficult to view production as a separate segment. The report said that this conversion of production processes and systems had caused some strain on production activity for the first half of 2013.

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However, now that the conversions have been completed and operations brought up to speed, the report said the Swatch Group expects to see a stronger second half-year.

The report also said that the integration of Harry Winston will only really become noticeable in the second half of 2013. The statement added: "The Harry Winston brand has an extremely large and almost untapped potential in the watch sector, which the group now aims to expand further using its experience around the world. The necessary funds will also be invested into this activity."

The report also said that a large amount of investment has been ploughed into the marketing activities of all the brands within the Swatch Group and within that, was the redesign of booths for BaselWorld this year, which the Swatch brand attended for the first time.

Swatch Group also reported an operating profit of CHF910 million (£632m), with an operating margin of 22.7%, and a net income of CHF768 million (£533m). The group said this result came despite a high marketing spend, important investments in innovative products and production methods and the integration of Harry Winston.

Highlights for the second half of the year are expected to include the launch of the Omega Seamaster Aqua Terra > 15000 Gauss, an antimagnetic watch, as well as the Swatch Sistem 51, which will be available from November.

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