Message of Nayla Hayek, Chair of the Swatch Group Board of Directors, on the occasion of the Annual General Meeting of May 10, 2023, in Biel (BE), Switzerland.
The original spoken text (in German) is valid.
Dear Sir or Madam,
I welcome you today to a virtual General Assembly and not to a live one, like those we had prior to the pandemic, when we were all together in one place. Unfortunately, this year, we were not able to find a suitable location in the area that could offer enough space to meet for this event. Because of the huge increase of over 20% in shareholders over the past two years, the expected number of shareholders attending would have been between 5,000 and 7,000 people. You can believe that we care greatly about our contact with all of you. We have loved – and continue to love – our AGMs with many thousands of shareholders where we can truly feel the atmosphere. However, we truly could not find a suitable venue this year. We will do everything we can to make it happen next year. Maybe it will be a Landsgemeinde, an old Swiss term for a large assembly open to every eligible member of the community: a Swatch Group Landsgemeinde! Who knows? . . . But we all feel the same way most of you do: we want to be together again. In fact, it's actually sad that there are only a few of us here, more or less speaking into a camera and a microphone. Believe us, we will do everything in our power to have another AGM together next year.
The procedure for the General Meeting is the same as always. You all received an invitation with the agenda. All shareholders were able to decide whether they wished to give instructions to the independent proxy in advance, or to grant power of attorney to another shareholder, or to attend the Annual General Meeting virtually. Those who participate virtually today can follow the presentations as usual and request information on the agenda items or submit motions verbally. The only difference is that we will not ask them to come to the speaker's podium, but will call them at the relevant agenda item if they register their wish via the “request to speak” button. All shareholders who have given their vote to the independent proxy or who vote themselves and are residents of Switzerland will receive our special limited AGM Swatch.
The world has changed. After the pandemic, we are all trying to get back to normal. Maybe a new normality. There are always different interpretations, analyses, or impressions regarding the same situation. Some see the glass as half empty, others see it as half full. We at Swatch Group have always been positive, and that is why we see the glass as nearly full again. A big step towards normality has been made almost everywhere. The temporarily dampened enthusiasm for consumption has been fully rekindled. We all long for health, life, happiness and the freedom to move.
Our Swatch Group did very well in 2022 with all its brands. But let me highlight one watch of 2022 in particular: The MoonSwatch with its incredible success. There was that indescribable feeling again - everyone wanted this watch, and the situation was reminiscent of the beginning of Swatch's limited edition crazy watches.
Remember March 26, 2022. The pictures went around the world. Hundreds of thousands stormed the 110 Swatch stores offering the brand new collection of eleven different models inspired by the legendary Speedmaster Moonwatch. We witnessed amazing, unimaginable, even surreal scenes. People were running, jumping, sprinting just to be the first in these stores. Queues formed several days beforehand, in some places several hundred meters long and sometimes even up to a kilometer. Whether in Melbourne, Tokyo, Shanghai, Bangkok, Zurich, Paris, London, New York or Dubai - everywhere people united. There was a veritable frenzy of joy.
Some spoke of a madness, of a MoonSwatch hype around the eleven models - one for each celestial body of our solar system. However, it was much more than that. This economic, social, cultural phenomenon spanned the whole of 2022, and although Swatch increased the number of stores over the months, queues remained a daily occurrence. I do not want to dwell on the MoonSwatch masterpiece at this point. Let me just highlight one key point: This product saw the light of day only thanks to the strength of the Group and its brands. Be aware: ten Group companies were involved in this unique collaboration between a luxury brand and a basic segment brand. And until the launch, very few people had any idea about it. And nothing leaked out. A wonderful story and a terrific success. At one point, a journalist wondered who but Swatch Group would be capable of such an operation. His answer? Nobody. And as you all know the story continues.
Swatch Group achieved very good results in 2022. Sales in Europe, the Americas, most Asian markets and the Middle East saw double-digit increases.
We ultimately achieved sales of CHF 7 499 million. This represents a year-on-year increase of 4.6% at constant exchange rates, or 2.5% at current exchange rates. In our retail activities, we also recorded double-digit growth. This was not only the case for Swatch, but also for the Harry Winston, Breguet and Omega brands in particular. Furthermore, Swatch Group continued to invest very selectively in new retail stores.
Operating profit increased by 13.4% to 1 158 million Swiss francs, corresponding to an operating margin of 15.4% (previous year: 14.0%). Net income also increased, to 823 million Swiss francs compared to 774 million in the previous year. Based on these encouraging figures, the Board of Directors will propose a dividend increase of 9.1% - CHF 6.00 per bearer share and CHF 1.20 per registered share - at the Annual General Meeting on May 10, 2023.
Last year, our 17 watch brands once again demonstrated their incredible creativity and savoir-faire. They offered consumers remarkable Swiss-made watches of the highest quality. Our appeal continued to grow. Our brands resonate with young and old - a broad audience. Our workforce also grew. Compared to the previous year, it increased by 2.0%, reaching more than 32 000 employees including over 540 apprentices.
Thanks to our strategy and the solidity of the Group, our global presence, the innovative strength of our brands and the quality of our production facilities, we are optimistic about 2023. The Swatch Group Executive Board expects strong sales growth in all regions and segments. We have good reason to believe that 2023 could be a record year.
We owe our success in 2022 to all our employees, the members of the Executive Committee and the Board of Directors. And to you, our shareholders, who have always remained loyal to us. I would like to take this opportunity to thank you all most sincerely for your outstanding support and tireless commitment.
Ladies and Gentlemen, dear fellow shareholders, I would like to thank you all for the trust you have placed in our company and wish you all good health.
At the conclusion of this speech, I would like to ask you all for a minute's silence in memory of our mother, grandmother and great-grandmother, Marianne Hayek, who left us in April this year at the ripe old age of 93. She and our father were the beginning of the Swatch Group success story and she will be sorely missed. Thank you.
Chair of the Swatch Group Board of Directors
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