The watchmaking group increased sales by 5.2% in 2023. However, earnings were below expectations, causing Swatch shares to fall in early trading. Despite these challenges, the group remains confident, anticipating growth opportunities in 2024, supported by increased investments.
On Tuesday, January 23, Swatch Group announced its annual results for 2023, marked by higher sales but also lower-than-expected profits. Sales for the global watchmaking giant rose by 5.2% last year to 7.88 billion Swiss francs ($9.10 billion).
Excluding currency effects, Swatch recorded a much higher sales increase of 12.6%, due to “massively negative currency effects”. “The rapid erosion of major currencies against the Swiss franc could not be offset by continuous price adjustments,” the group says in a statement.
However, although in line with market expectations, operating profit of 1.19 billion Swiss francs (1.26 billion euros) disappointed, below forecasts of 1.32 billion Swiss francs (1.40 billion euros), according to LSEG data.
“Swatch Group’s profitability was much worse than expected against a backdrop of increased investments, retail expansion and a strong Swiss franc,” pointed out Jon Cox, analyst at Kepler Cheuvreux.
Investments doubled
In 2023, Swatch has doubled its investments, disbursing 803 million Swiss francs (851 million euros), including more than 300 million in production facilities and 220 million francs in real estate to benefit from the “best commercial locations”.
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Featured photo : © Omega
