With net turnover up 5.2% to 7.89 billion francs and net profit up 8.1% to 890 million francs, the results for the 2023 financial year are rather positive for the Swatch Group . Despite a strong franc, the group’s general management is delighted with a report considered satisfactory, while recalling that last year was quite eventful.
A mixed year 2023
Between a very solid first part of the year and a more complicated second part, particularly in high-end brands, 2023 will not have lacked salt for the Bienne giant. When it comes time to take stock, the Swatch watch group is indeed recording increased results, although these turned out to be lower than expected. “The tragic events that the world experienced in 2023 have also made the situation more complicated for us, to see these tragedies that we almost no longer thought possible in our time, in that, it is a year that we hope will not no more repeating,” Marc Alexander Hayek, member of the group’s general management, told us.
China in decline
The Watch Federation (FH) announced it at the beginning of the week; a -24.5% drop in watch exports to China was noted in February. The phenomenon obviously impacts the Swatch Group, to the extent that China is the multinational’s main market. But to what extent? “For us, fortunately, the month of February was a little better than these figures, not at all a clear decline. But if we compare with the months of January-February of last year, which literally exploded, I think we are going to have a more reluctant first part of the year in China,” underlines the CEO of Blancpain. As for how to explain this phenomenon and whether it is worrying, Marc Alexander Hayek wants to be rather reassuring. “For us, there is no need to panic, it is almost more a mood, a sort of reluctance to know where I put my money and when I spend it, than really a disappearance of purchasing power”, explains Nayla Hayek’s son again.
Good outlook for 2024
“We expect challenges but also opportunities,” declared the group’s CEO, Nick Hayek, at the opening of the review press conference this Thursday in Biel. Certainly the Chinese decline will give the Swatch Group a bit of trouble, especially since the boss of Swatch expects this trend to continue in the coming months. But the group’s strategy is not going to change. “Not allowing ourselves to be influenced in the short term to please the stock market, that’s our culture,” recalls Nick Hayek. And to add, “our center of attention is the product”. The entrepreneur also described Thursday’s decision by the Swiss National Bank to lower key interest rates as a “good surprise”.
“We hope this will lead to a slight decline in the franc,” he added. The strong franc has already led to sales losses of more than 100 million francs in January and February 2024 for the group, according to its general director. Despite the strength of the franc, general management remains optimistic for 2024, and aims to continue its growth, particularly in the entry and mid-range segments. /rm