PARIS — Swatch Group said net profit rose 18.1 percent in 2011 as the world’s largest watchmaker posted record results, and the trend continued in January with double-digit growth in the watches and jewelry segment.
This story first appeared in the February 8, 2012 issue of WWD. Subscribe Today.
The parent of brands including Omega, Breguet, Blancpain and Swatch said net profit last year rose to 1.2 billion Swiss francs, or $1.4 billion, despite a strong Swiss franc and a sharp rise in the price of gold and diamonds.
“The strength of the group’s brands was noticeable not only in Greater China but in all other regions as well, and in the very strong growth rates across all price segments, which have been leading to major capacity bottlenecks at times,” Swatch stated.
Shares in Swatch Group closed down 4 percent amid disappointment that it planned a dividend increase of just 15 percent, coupled with concerns over a 78.7 percent drop in operating profit at the group’s electronic systems division, which was particularly penalized by the strong franc.
By contrast, the production division — which manufacturers components — posted a 64.3 percent rise in operating profit and expects growth to continue in 2012.
As previously reported, Swatch Group’s gross sales jumped 21.7 percent at constant exchange to 7.14 billion Swiss francs, or $8.08 billion, in 2011. All dollar rates are calculated at average exchange rates for the period to which they refer.
The company created more than 2,800 jobs in 2011, raising the number of employees worldwide to more than 28,000.