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On Thursday 28 January, the Swatch watchmaking group unveiled its 2020 results, recording for the first time since its beginnings almost 40 years ago an annual loss, despite an improvement in the second half of the year.
However, the owner of the Omega brand hopes to achieve revenues close to 2019 in 2021.
“The general management foresees a strong global need to catch up in the consumption of watches and jewelry, similar to what was observed in mainland China after the normalization of the health situation. As soon as travel restrictions are eased or lifted, demand will increase further,” says Swatch.
The results of a sad reality
In its press release, the watch company posted disappointing figures, with sales declining by 32.1% to 5.6 billion Swiss francs, a decline of 28.7% excluding currency effects.
Net loss totaled 53 million Swiss francs (‘49.25 million), compared to a net profit of 748 million a year ago. Operating profit (Ebit) was 52 million compared to 1.02 billion in 2019, with an operating margin of 0.9% compared to 12.4% in 2019.
The decline experienced by Swatch alone is greater than the 22% decline experienced by the entire Swiss watch industry.
The Board of Directors has therefore decided to propose a lower dividend per bearer share of CHF 3.50 compared to CHF 5.50. For registered shares, the dividend was reduced to CHF 0.70 compared to CHF 1.10 in the previous year.
With the exception of the dividend, all reported results were below the AWP (Aberdeen Global Premier Properties) consensus. Analysts forecast a net profit of around 14 million.
Optimism for 2021
These results thus illustrate the group’s weaknesses with regard to the pandemic, which caused the slowdown in tourism in particular. The political tensions in Hong Kong, which have significantly reduced the number of Chinese tourists, are also to blame.
Another weak point: its exclusive activity in watchmaking, which alone could not withstand the economic crisis. Other watchmaking companies such as Richemont, for example, were able to rely on their jewelry division.
It should be noted that the Swiss watch industry relies heavily on exports, only, the pandemic has also generated a phenomenon of protectionism on the part of other countries, a very worrying phenomenon for the sector.
“For 2021, the group anticipates that sales in local currency are likely to be close to those of 2019, with significantly improved margins,” the group said.
The brand is relying in particular on the improvement in its results in the second half of 2020 and sees them as a future hope. During this period, China experienced double-digit growth, and sales in the United States posted pre-pandemic figures in December.
This resulted in a fall in sales of only 14.3% year-on-year after a 43.4% drop in the first half of the year.
“We also expect a turnaround in 2021, but we consider these prospects to be very optimistic,” said René Weber, analyst at Bank Vontobel.
Lire aussi > SWITZERLAND : RICHEMONT AND SWATCH DOWN AFTER WATCH EXPORTS
Photo à la Une : © Omega[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
On Thursday 28 January, the Swatch watchmaking group unveiled its 2020 results, recording for the first time since its beginnings almost 40 years ago an annual loss, despite an improvement in the second half of the year.
However, the owner of the Omega brand hopes to achieve revenues close to 2019 in 2021.
“The general management foresees a strong global need to catch up in the consumption of watches and jewelry, similar to what was observed in mainland China after the normalization of the health situation. As soon as travel restrictions are eased or lifted, demand will increase further,” says Swatch.
The results of a sad reality
In its press release, the watch company posted disappointing figures, with sales declining by 32.1% to 5.6 billion Swiss francs, a decline of 28.7% excluding currency effects.
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On Thursday 28 January, the Swatch watchmaking group unveiled its 2020 results, recording for the first time since its beginnings almost 40 years ago an annual loss, despite an improvement in the second half of the year.
However, the owner of the Omega brand hopes to achieve revenues close to 2019 in 2021.
“The general management foresees a strong global need to catch up in the consumption of watches and jewelry, similar to what was observed in mainland China after the normalization of the health situation. As soon as travel restrictions are eased or lifted, demand will increase further,” says Swatch.
The results of a sad reality
In its press release, the watch company posted disappointing figures, with sales declining by 32.1% to 5.6 billion Swiss francs, a decline of 28.7% excluding currency effects.
[…][/vc_column_text][vc_cta h2=”Cet article est réservé aux abonnés.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Abonnez-vous dès maintenant !” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”JE M’ABONNE !” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true” btn_link=”url:https%3A%2F%2Fluxus-plus.com%2Fen%2Fabonnements-et-newsletter-2-2%2F|||”]Accédez en illimité à tous les articles et vivez une expérience de lecture inédite, contenus en avant première, newsletter exclusives…
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