The Swatch Group increased sales and profits last year. The Biel-based watch manufacturer wants to continue to grow in the new year and is proposing a higher dividend to be paid out to shareholders.
Overall, sales rose by 5.2 percent to 7.89 billion francs in 2023, as the group announced with brands such as Omega, Longines and Blancpain. Adjusted for currency effects, sales increased by 12.6 percent.
Meanwhile, the strong franc also weighed on profitability: operating profit EBIT rose by just 2.8 percent to 1.19 billion francs. Accordingly, the EBIT margin fell slightly by 0.3 points to 15.1 percent. The group had also invested significantly more, for example in staff and its own shops.
Higher dividend promised
The bottom line is that net profit increased by 8.1 percent to 890 million. The shareholders should also benefit from this: The group wants to pay out a dividend that is 50 cents higher than the previous year to 6.50 francs per bearer share. That would be 1.30 francs (+10 centimes) per registered share.
The focus at Swatch is on the watches and jewelry segment. Sales increased by 5.6 percent to 7.55 billion francs and EBIT increased by 5.3 percent to 1.3 billion. The group was therefore able to defend its margin of 17.2 percent in this business.
Recovery in Asia, boom in Switzerland
The company also announced that it had gained market share with all of its brands in all regions of the world. Proof of this are the segment’s export figures, which last year (as of the end of November) were 12 percent higher than the watch exports reported by the Swiss Watch Association (+7.7 percent).
The group recovered from the aftermath of the corona pandemic and grew in double digits, particularly in Hong Kong, Macao, Thailand, India, Japan and China. In Europe, however, sales only grew in the single digits, with sales in Switzerland booming with an increase of over 30 percent. North America has continued its previously strong growth trend, it goes on to say.
Legend: According to Swatch, the “Moonswatch” continued to enjoy good demand. The watch in the dress of the Omega cult watch “Moonwatch” was sold very well worldwide. Archive/KEYSTONE/Ennio Leanza
The “Electronic Systems” division suffered a margin decline of 5.2 points to 7.5 percent – primarily due to negative currency influences. After all, Micro Crystal, which operates in the automotive and medical sectors, is expected to return to growth and increased profitability in the current year.
Confident for 2024
As is usually the case, Swatch is very confident about the future course of business. The growth opportunities for 2024 are great, especially in the lower and middle price segments with brands such as Swatch and Tissot. The development of the currency situation will continue to influence the group’s results due to its strong industrial base in Switzerland, according to the statement.
For the jewelry brand Harry Winston, the group is aiming for sales of more than one billion francs for the first time in 2024. And with Omega as the official timekeeper at the Olympic Games in Paris, the group hopes that the resulting global media presence will have a positive impact.
According to Swatch, sales are likely to increase clearly in America and Japan. And in China, the brands in the lower and middle price segments will benefit from additional demand, the group is convinced.