With the further worsening of the exchange rate situation against the massively overvalued Swiss franc, Group sales were reduced by an additional CHF 56 million or 1.4 percentage points. The financial and currency shock of 15 January 2015 caused by the Swiss National Bank (SNB) created an imbalance in sales prices compared to Switzerland, particularly in euro countries. Calculated in euros, Group net sales grew by 18.7%. Despite this extraordinary situation, the Group will maintain its long-term strategy of defensive price adjustment policy over short-term profit.
- The Group’s net sales were up 3.6% to CHF 4 248 million at constant exchange rates or 2.2% to CHF 4 192 million at current rates. Calculated in euros, the Group grew by 18.7%.
- In the Watches & Jewelry segment, including Production, the Swatch Group grew by 3.4% at constant exchange rates in comparison with the declining export of wrist watches of the Swiss Watch Industry of –1.1% at the end of May.
- Accelerated growth in May and June 2015.
- Operating profit of CHF 761 million, 8.3% under the first half of the previous year, due to significant currency shifts in the recent past. Nevertheless, operating margin reached 18.2% for the Group.
- In the Watches & Jewelry segment, including Production, the operating margin reached 20.0%.
- Swiss franc shock and negative interest rates result in a lower net income of CHF 548 million, 19.4% below the first half of 2014.
- Positive outlook for the second half of the year, with the launch of new products such as Omega’s new James Bond Edition, the introduction of the Omega Master Co-Axial with METAS certification, the Swatch Touch Zero One and the Swatch NFC (Near Field Communication) as a contact-free means of payment; as well as with the additional increase in capacity at Tissot for its very successful T-Touch Expert Solar.
The outlook for the Group in all regions and segments remains very good. Despite the Swiss franc dilemma, Group Management expects a strong second half 2015.
Tourism in South Korea will stabilize again after MERS and sales in Greater China and other regions will further increase in local currency. For all brands, this growth will be supported by a high level of marketing investment, an expanded retail network and also by the many new product launches in all segments.
The high consumer demand worldwide for Swiss watches continues very dynamically across all segments, particularly also in the area of mechanical watches.
Under these circumstances, and also remaining focussed on the successful long-term strategy to increase market share, further very positive growth in local currency is expected.