SWATCH GROUP: KEY FIGURES 2018

SWATCH GROUP: KEY FIGURES 2018
  • Group net sales increased by 6.1% to CHF 8 475 million at current exchange rates (+5.7% at constant rates). 
  • Operating result increased by 15.2% to CHF 1 154 million. Operating margin increased from 12.5% in the previous year to 13.6%. 
  • Net income increased by 14.8% to CHF 867 million, with a net margin of 10.2% (previous year: 9.5%).
  • Dividend proposal: increase of 6.7% to CHF 8.00 per bearer share and CHF 1.60 per registered share. 
  • Business slowed in the last three months of the year under review. The month of December in particular was slow, due in part to the very high comparison basis. 
  • Production companies in the Habillage sector (cases, dials, watch hands, etc.) worked at or even above capacity limits, which led to significant delivery delays, mainly for products for Omega and Longines. 
  • Record number of 212 new patent applications in 2018. 
  • Creation of over 1 700 new jobs, mainly in Switzerland.
  • January 2019 started with solid growth, even in comparison with the very strong January in the previous year. The Swatch Group expects a positive trend in 2019, both in demand and in elimination of capacity bottlenecks.

Outlook for 2019

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 leadership position of the Swatch Group in China will become a major opportunity for the Group in 2019, even if ongoing market turbulence remains disruptive. Additional gains in market share are expected in Japan and the USA in 2019.

Growth drivers

Harry Winston will continue its dynamic growth trend in 2019, accelerated as well by the confirmation of the top position of the brand by the purchase of the Pink Legacy diamond.

Blancpain ended 2018 with record sales. The product Fifty Fathoms is one of the drivers of this success. The brand appeals ideally to the millennium generation, and strong growth is also expected in 2019.

Omega is celebrating the 50-year anniversary of the moon landing with various additional product launches on this theme. Additionally, in the second half of 2019, the special editions „minus 1“ for the Olympic Games 2020 in Tokyo will be launched in Japan.  

The high demand for the Longines V.H.P. (Very High Precision) collection could not be adequately served in the last quarter of 2018 due to production bottlenecks. Elimination of these bottlenecks will have a very positive impact on the development of the brand in 2019.

Tissot will introduce its smart T-Touch with its own operating system during the course of 2019.

In January 2019, Swatch introduced Swatch Pay in Switzerland with great success, and further countries will follow during the course of the year. In February 2019, Swatch will launch the first Sistem51 products with the patented Nivachron balance spring with antimagnetic properties.

In future, all mechanical watches for Swatch Group brands will feature antimagnetic properties, either with the silicon balance spring or the Nivachron balance spring, both patented inventions. This means a substantial quality improvement in terms of precision and reliability. As a result, Swatch Group brands gain a clear advantage over many well-known brands in the Swiss and international watch industry which do not have similar antimagnetic quality characteristics. This improvement, which will be backed up by a longer guarantee period, will translate into clear market share gains in 2019 and beyond.

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