By  on January 10, 2012

PARIS — Shares in Swatch Group closed up 2.9 percent Tuesday as the world’s largest watchmaker said it had a “positive start” in January in all regions and price segments.

The parent of brands including Omega, Breguet, Blancpain and Swatch reported that gross sales last year jumped 21.7 percent at constant exchange to a record 7.14 billion Swiss francs, or $8.08 billion.

And despite what the Swiss watch giant characterized as a “difficult economic environment” and a “catastrophic currency situation” last year, it said it expects “good results” for operating profit and net income when it reports full 2011 results on Feb. 23.

The strong Swiss currency wiped 696 million francs, or $787.4 million, off full-year revenue tallies, the Biel-based company noted.

It also acknowledged that the year ahead “will be a major challenge. However, the Swatch Group is confident of again generating qualitative growth in 2012, despite the ever-more challenging economic comparison.”

The 2011 numbers beat expectations, while reflecting a modest deceleration in the second half that Citi analyst Thomas Chauvet attributed to a slowdown in Europe and Asia — the former region due to economic concerns; the latter to the impact of property prices on consumer sentiment.

“Management highlighted that December 2011 was the strongest month in the history of Swatch,” Chauvet said in a research note.

Swatch said 2011 revenues in the watches and jewelry segment climbed 26.1 percent at constant exchange to 6.31 billion Swiss francs, or $7.14 billion. Dollar rates are calculated at average exchange.

The company noted that growth came “not only in Greater China but also in all other regions and all price segments.”

Swatch noted that revenues in its production segment swelled 32.6 percent to 2.02 billion francs, or $2.28 billion, despite “major production bottlenecks” for components. The firm recently fended off a legal challenge in Switzerland as it aims to reduce its deliveries of mechanical movements and their components to rival watchmakers, as reported.

Swatch blamed the “overvalued” Swiss franc for a 16.3 percent drop in sales in its electronics segment, “along with the down trend in certain markets.”

To access this article, click here to subscribe or to log in.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus