News Like the Swiss watchmaking industry as a whole, the leading group achieved record sales last year, passing the 4 billion francs mark for the first time in its history. The operating result and net profit are not lagging behind either and forecasts for 2001 are optimistic.
Worth 4,263 million francs last year, sales by the Swatch Group made a veritable leap forward (+ 17.6% on 1999) with 112.3 million watches, movements and stepping motors produced (+ 8.5%). This new record is explained by a number of factors: improved consumer sentiment in Europe, the strong comeback of the Far Eastern markets, growth of the US economy and, last but not least, the stronger positions acquired by the Bienne-based watchmaking group in every sector of the market.
Sales of complete watches reached 3,120 million, equivalent to a 14.3% rise or over 30% for the prestige watchmaking segment alone! That is a niche market on which all the brands – especially Breguet and Blancpain – have experienced “impressive development” with a special mention for Omega whose success continues unabated.
For their part, Rado and Longines confirmed their growth, while the middle of the range segment reported progress running well into two figures, one contributory factor being the strong advance of Tissot.
In the basic range, sales through the Swatch Stores rose substantially. The other distribution channels also saw their business prosper, except for those in Western Europe. Production of Lanco low cost watches and that of the private label sector were reviewed downwards to release capacities for the benefit of Swatch and products for upmarket timepieces.
Sales of watch movements and components reached 1,412 million francs (+ 18.7%), thanks in no small measure to highly priced mechanical and quartz watches. The lower market segment remained stable in the year 2000. Today, the order books of ETA, Nouvelle Lémania and Frédéric Piguet are overflowing. For some products, orders are well in excess of production capacity for the whole year.
With EM Microelectronic Marin, Lasag, Oscilloquartz, Micro Crystal and Renata, the electronic system sector was the one, which recorded the strongest growth in 2000 (+ 24.1% to 468 million), even if the battery maker in Itingen experienced flat sales following changes in the mobile telephony sector. These changes resulted in the postponement of a planned new battery.
Profit figures will be favourably influenced by the higher sales. The operating profit and consolidated net profit for the financial year 2000 will not be disclosed until 16 March, but the Swatch Group has already announced that both will be well up on 1999, while their respective growth rates will be substantially higher than that of sales.
The Group is equally optimistic for the present year. Despite the strong increase reported in 2000, it still forecasts further growth of 10 to 15% in 2001. There are many reasons for this optimistic forecast: demand for watches and movements remains very strong, especially in the higher price categories; production capacities, especially for the electronic systems, will be increased; a new wholesale and retail distribution structure is currently being set up; the jewellery sector (Breguet, Swatch, Leon Hatot and Omega) will gradually be developed; Glashuette Original, a prestigious German brand acquired a few months ago, will gradually be integrated in to the group etc.
February 15, 2001
