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Seal of approval for the Hayek family at Swatch Group...
Economy

Seal of approval for the Hayek family at Swatch Group Ordinary General Meeting

Monday, 19 May 2014
By Thierry Brandt
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Thierry Brandt

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3 min read

Close to 3,000 shareholders attended the Swatch Group Ordinary General Meeting on May 14th, all won over to the multinational’s strategy. And with good reason: it’s all systems go and financially the company is in fine fettle. The formalities of the day’s agenda aside, a number of interesting things were said.

All’s for the best in the best of all horological worlds… a phrase that springs readily to mind when examining Swatch Group’s results. A simplistic conclusion, perhaps, but even the most hair-splitting of shareholders will admit that 2013 figures make for impressive reading. They were presented on May 14th before an enraptured audience. Indeed, the official accounts, certified by PricewaterhouseCoopers, were music to the ears of the 2,977 shareholders taking part in the Group’s Ordinary General Meeting:

• Gross sales: CHF 8 817 million (+8.3%)
• Operating profit: CHF 2 314 million (+17%)
• Operating margin: 27.4%
• Net income: CHF 1 928 million (+20.2%)
• Equity: CHF 9 574 million (+11.7%)

Telephone number figures, to put it bluntly! And for those who enjoy number-crunching, the Group is still very much export-oriented and makes just 12.3% of its sales in Switzerland; the rest is shared between Greater China (38.6%), Europe (21.1%), Asia and the Middle East (18.1%), the Americas (8.2%), Oceania (1%) and Africa (0.7%).

It did this so as to preserve its future and that of its employees.
One disgruntled shareholder

Shareholders in the group were rewarded with a dividend of CHF 1.50 per registered share and CHF 7.50 per bearer share, a resolution approved by all those present… except one! Yes, a single dissatisfied shareholder took the floor to accuse the group of penny-pinching. Chairwoman of the Board of Directors, Nayla Hayek replied that Swatch Group wasn’t like other companies; that rather than aiming for short-term profitability, it focused on developing a long-term industrial strategy; that it reinvested the majority of its profits to consolidate its role as a pioneer in technology, and that it did this so as to preserve its future and that of its employees, particularly in the event of more economically challenging times. This was an interesting exchange of views and a reminder for all that Swatch Group’s string of successes over the past 31 years is precisely thanks to this strategy, and thanks to its founder’s vision.

We're an industry that exports and are therefore heavily dependent on exchange rates and the high Swiss franc.
Nick Hayek
Smart watches in question

Protocol and the formality of the meeting aside, Nick Hayek, CEO of Swatch Group, had strong words for Thomas Jordan, Chairman of the Swiss National Bank: “We’re an industry that exports and are therefore heavily dependent on exchange rates and the high Swiss franc. Mr Jordan, don’t forget to do something for the Swiss franc!”

Nick Hayek also made a lengthy digression on the subject of smart watches, giving an ironic rebuff to those who believe the group is missing this technological boat. He retorted that the company has been a pioneer in connected watches and instruments since 1991, citing the pager, the Swatch Skipass, the Paparazzi watch (with Bill Gates) and of course the Tissot T-Touch: “We have the technology, particularly as regards miniaturising integrated circuits, and we have the experience. For the moment though, we’re waiting to see what happens and if demand really takes hold. We’re ready for … 2014, 2015, and after,” he concluded.

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