Swatch group headquarters

Swatch Group sales rise 5.7% to CHF 8.5 billion in 2018

Supply chain challenges in the second half of 2018 are easing, with delivery of Omega and Longines watches improving this year, the company says.

Swatch Group sales rose 5.7% at constant exchange rates to CHF 8.5 billion in 2018, while improved margins increased operating profits by 15.2% to CHF 1.15 billion.

Nayla Hayek, chair of the Swatch Group Board of Directors described the financial performance as: “A very solid result that inspires great confidence in the future.”

The strongest sales growth came from the prestige and luxury range, particularly Blancpain, Omega and Longines, despite capacity bottlenecks in the supply chain that resulted in delivery delays for Omega and Longines in the second half of the year.

Asia recorded the fastest growth, both in wholesale and in the Group’s own retail including e-commerce, although a downturn in demand occurred in the last three months of the year, particularly in wholesale, Swatch Group’s annual report states.

Sales in North America developed very positively, including the last three months of the year, Swatch Group says. Europe displayed a mixed picture. Countries such as Great Britain and Switzerland increased their sales, while other countries such as France were very weak, especially at the end of the year, because of street protests in major city centres.

In a forward-looking statement, the annual report says: “The Swatch Group anticipates healthy growth in 2019, despite the strong comparison basis in the first half of 2018. Demand is good and production problems and bottlenecks, particularly in the Habillage sector, will be resolved in the first semester. Further expansion of e-commerce, mainly in the middle and basic range, will open additional possibilities.”

The group’s sales are increasingly dominated by Asia. From 2018 turnover of CHF 8.5 billion in 2018, CHF 5.2 billion was from Asia including CHF 3.1 billion from Greater China (including Hong Kong). Europe totalled CHF 2.4 billion and America sales were CHF 733 million.

The annual report also gave a glimpse into Swatch Group’s new headquarters in Biel/Bienne (pictured above), which is one of the world’s largest wooden structures.

“It opens up unusual perspectives both inside and out, embodying a new way of working, building and thinking,” the company says.

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