Swatch Group’s share price has been on a tear since slumping at the beginning of the pandemic in March last year and is now trading slightly above its average level in the pre-covid days of 2019.
That bounce back in investor confidence will be bolstered by recovering revenues and profits in the first half of 2021, although they remain well below the equivalent period in 2019.
Sales for the six months to the end of June were CHF 3.4 billion, up from CHF 2.2 billion last year, but below the CHF 4.1 billion in the equivalent period for 2019.
A net loss of CHF 308 million for H1 2020 has been overturned into a profit of CHF 270 million this year.
Again, there is some way to go to get back to the profitability of 2019 when Swatch Group netted CHF 415 million in the first half of the year.
Commentary accompanying the H1 financial results struck an optimistic tone, pointing to month on month growth throughout the period providing momentum into the second half of the year.
“Based on the significantly accelerated increase in sales in the second quarter, particularly in the month of June, the Swatch Group anticipates further strong growth in local currencies in the second half of the year, with sales above 2019 levels,” the company forecasts.
Forward guidance highlights operational landmarks from the first half of the year that will be built on in the second half along with major promotional opportunities, particularly for Swatch Group’s largest brand, Omega, in the coming months. These include:
- Very strong demand for Harry Winston jewellery. Opening of three new flagship stores in Beijing, Shenzhen and Milan.
- Continuing strong performance by Blancpain leads to major order backlogs and the challenge to quickly increase production capacity.
- The Olympic Summer Games in Tokyo will open on 23 July. Once again, Omega, as official timekeeper, will be visible worldwide in all the media. In September, with the global release of the new James Bond film No Time To Die, Omega will also show a very strong presence with the James Bond Seamaster Co-Axial Master Chronometer.
- After successful launch in China and the USA, the Tissot T-Touch Connect Solar will be introduced in additional markets such as Japan. Furthermore, it will also be equipped with additional new functions such as the option to receive live results of NBA games or bicycle races of which Tissot is a partner.
- Swatch very successfully launched the new bioplastic and bioceramic models to the market, and will continuously increase production capacity in the next months.
