Swatch Group H1 net sales up 8.5 percent

REPORT_ Swatch Group generated gross sales of 4, 535 million Swiss Franc (5,046.4 million dollars) at constant exchange rates

in the first half year of 2014 and thereby grew by a further 8.5 percent. The already overvalued Swiss franc strengthened further against currencies in all of the Group’s important sales regions compared to the first half of the previous year. The extremely adverse exchange rate situation negatively impacted Group sales by 4.5 percentage points.

In the watches & jewelry segment (including production), Swatch Group recorded gross sales growth of 8.8 percent at constant rates and 4.3 percent at current rates compared to the previous year. This growth was generated by the Group’s strong brands and broad distribution network. In local currency, all markets except for a small number of European countries remain on a growth course compared to the prior-year figures.

The electronic systems segment continued to remain exposed to the overvalued Swiss franc, particularly against the USD and JPY, which eroded further compared to the first half 2013 by below 5 percent and below 11 percent, respectively. This segment generated gross sales decline of 2 percent at current exchange rates, although a return to very positive sales development was reported in the months of May and June.

800 jobs were also created worldwide since the end of 2013, of which 460 in Switzerland. In total, Swatch Group employed over 34 000 at the end of June 2014. The opening of new retail stores, the upcoming launch of the new Omega Master Co-Axial with antimagnetic movement and the worldwide launch of the Swatch Sistem51 in the second half of the year are additional elements contributing to the positive increase in inventory.

The outlook for the Group in all regions and segments remains very good and a promising second half of 2014 is expected. Particularly in the USA and Japan, sales continue their very positive development and the stronger sales trend noticed on the Chinese mainland continues. In contrast, the situation in Hong Kong is affected by a number of uncertainties. In the second half of 2014, due to the anticipated lower comparison basis of exchange rates to the Swiss franc, negative currency impact should be less dramatic than in the first half of 2014.

The Group will strengthen its worldwide market presence through investment in marketing, retail and customer service. In addition, ongoing investment will be made in the continuing training of personnel and the professional education. In the second half of 2014, the brands will broaden the product line with the launch of new lines.