Swatch half-year profits tick ahead of forecasts

The world's biggest watchmaking group Swatch reported on Tuesday that net profit growth slowed in the first half of the year, but still beat analysts' expectations.

Swatch half-year profits tick ahead of forecasts
Swatch's new Sistem51 watch. Image: Swatch

The company, most known for its brightly coloured plastic-cased watches and which in recent years has accustomed investors to double-digit growth, reported that net profit rose by 6.1 percent to 768 million francs ($820 million) for the first half of the year, compared to the same period in 2012.
Swatch Group sales, meanwhile, moved 8.7 percent higher at 4.1 billion francs, the company said in its earnings statement.
The watchmaker said that it was the victim of its own success last year, with growth appearing weak compared to "the very strong first half year 2012."

The net profit was slightly higher than the 733 million francs expected by analysts polled by the AWP financial agency, while the sales were in line with expectations.

In recent years, the Biel-based group has seen its business balloon thanks to a seemingly insatiable appetite by Chinese consumers for luxury watches.

But company chief Nick Hayek warned in March that the massive growth could not go on forever.

Over the last six months, Swiss watch exports to China have slowed, in part owing to a recent ban on ads for extravagant gifts in an anti-corruption push.

Earlier this month, the French luxury products group Hermes reported signs of a slowing of demand in China for its watches.

Swatch nonetheless said the outlook for the remainder of the year remained "very promising," saying that "a strong second half-year is expected."

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

The watchmaker said on Tuesday that it aimed to launch a number of new products in coming months and that it would continue to work to integrate recently purchased US jeweller and watchmaker Harry Winston.

Following the announcement, the price of shares in Swatch Group rose by 1.89 percent to 539.50 francs in early trading, well ahead of the Swiss stock exchange's main index, which dipped 0.2 percent.

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Swiss watchmaker Swatch wins latest trademark battle with Apple

A top Swiss court on Thursday handed the watchmaker Swatch victory in a trademark dispute with US technology giant Apple – the latest in a series of legal disputes between the two firms.

Swiss watchmaker Swatch wins latest trademark battle with Apple
Swatch Group CEO Nick Hayek with the Zero One wristwatch in 2014. File photo: AFP

In the current case, Apple had alleged the Swiss company’s ‘Tick different’ slogan was too similar to the US company’s ‘Think different’ slogan of the 1990s.

Apple originally filed an objection with the Swiss Federal Institute of Intellectual Property, but that organisation turned down the complaint.

Read also: How luxury watchmakers are gearing up for Brexit

The US company then took the case to the St-Gallen based Federal Administrative Court.

To have a chance of winning its case against Swatch, Apple had to prove that the famous slogan – the related TV commercial won an Emmy for Outstanding Commercial in 1998 – had more than 50 percent recognition in Switzerland.

However, the Federal Administrative Court ruled Apple had not provided sufficient evidence that this was the case and found in Swatch’s favour.

The evidence for awareness of the slogan in Switzerland consisted of just several articles on Apple in Swiss broadsheet NZZ.

This dispute was just the latest in a series of legal confrontations between the two companies.

In 2007, Swatch, which is headed up by charismatic businessman Nick Hayek, trademarked the term ‘iSwatch’ before Apple was able to register the term ‘iWatch. 

The Swiss watchmaker also trademarked the expression ‘One more thing’, which was made famous by Apple co-founder Steve Jobs.

Apple has had other legal problems in Switzerland. In 2012, it reportedly paid 20 million Swiss francs (€17.8 million) to Swiss Federal Railways to avoid going to court over its use of the design of the Swiss railway clock in its i06 operating system.