• Switzerland's news in English

Swatch 2012 profits tick ahead of forecasts

AFP · 4 Feb 2013, 09:11

Published: 04 Feb 2013 09:11 GMT+01:00

Facebook Twitter Google+ reddit

Swatch, popularly known for its brightly coloured plastic-cased watches saw its net profit balloon to 1.6 billion francs ($1.76 billion).

Hailing "a high level of capacity utilisation, innovative production methods and traditionally strong cost controls," the group also said its operating profit swelled nearly 23 percent year-on-year to 1.98 billion francs.

Analysts surveyed by Swiss financial news agency AWP had expected a more modest increase in the watchmaker's net profit to 1.4 billion francs on an operating profit of 1.8 billion francs.

Following the news, the price of shares in the watchmaker surged 2.5 percent to 530.50 francs in late morning trading on a Swiss stock exchange up 0.25 percent.

Earlier, Swatch, which often publishes parts of its results in advance, had reported that its 2012 sales rose by 14 percent to 8.1 billion francs.

"Swatch Group convinced with a strong performance," Bank Sarasin analyst Patrick Hasenboehler said in a research note.

The Swiss company said its all-important watches and jewellery division had seen its operating profit leap 20.8 percent to 1.6 billion francs, despite large-scale investments in marketing to promote its luxury Omega brand during the London Olympics.

The group said it had especially seen strong growth in sales of its mid-range and high-priced products.

While Swatch's low-end plastic watches are perhaps its most recognizable, the Swiss company operates in every price range, from the Flik Flak kid's watches to prestigious timepieces under, for instance, the Breguet brand which can cost more than one million francs apiece.

Story continues below…

The Biel-based group is also Switzerland's leading provider of watchmaking components, and in 2012, its production unit saw its operating profit swell 37.3 percent to 442 million francs.

This, it said, was largely due to its "high level of capacity utilization and new revolutionary production methods."

Swatch said its board would propose raising the dividend by 17.4 percent to 6.75 francs for each bearer share and to 1.35 francs for each registered share.

For 2013, the watchmaker said "the signals from the markets around the world clearly indicate continued healthy growth potential for the Swiss watch industry and the Swatch Group."

It estimated the country's watch industry had realistic long-term growth prospects of five to ten percent per year.

Swatch also said it expected its recent purchase of US jeweller and watchmaker Harry Winston showed great growth potential.

The Swiss company announced the acquisition last month, aimed at allowing it to expand its luxury offerings and compete with the likes of Bulgari, owned by LVMH, Richemont's Cartier and British diamond merchant Graff.

Vontobel analyst Rene Weber, meanwhile ,said he did not expect the Harry Winston purchase to improve on the Swiss group's record 25.4-percent operating margin going forward, since the US jeweller traditionally enjoyed far narrower margins than Swatch.

Facebook Twitter Google+ reddit

Your comments about this article

2013-02-04 15:53:16 by bellsucks
I got an old swatch kickin around in a box some where.
Today's headlines
Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Inside Switzerland’s largest nuclear bunker – 40 years on
Designed to house 20,000 people, the bunker was built in and over two motorway tunnels. Photo: Unterirdisch Ueberleben

The Local takes a tour of the Sonnenberg bunker in Lucerne, opened 40 years ago at the height of the Cold War.

Ten Swiss ski resorts named most expensive in Europe
File photo: Renato Bagattini/Swiss Tourism

Skiers in Switzerland pay the highest prices for their ski passes of anywhere in Europe, according to research.

Eco group fights Bern over wind farm plans
There are currently more than 30 wind farms in Switzerland. Photo: Alpiq

Wind turbines are “gigantic and destructive” machines, says Paysage Libre Suisse.

Vegan wins battle to be accepted by Swiss army
Antoni Da Campo will now carry out his military service. Photo: Antoni Da Campo

A Swiss man who was told he would not be accepted for military service because of his strict veganism has finally succeeded in making the army change its mind.

Geneva terror suspects to receive compensation
File photo: Emran Kassim

The Swiss public prosecutor has dropped the case against them.

Sponsored Article
How to vote absentee from abroad in the US elections
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Sponsored Article
How to vote absentee from abroad in the US elections
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Photo: File
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Muslim pupils must shake hands – ‘no ifs and buts’
jobs available