Swatch: towards record growth in 2023?

The boss of the Swiss Swatch Group yesterday presented the company’s 2022 management report, with encouraging figures. Despite a slowdown in the Chinese market, the group’s sales increased by 2.5% in 2022.

The Biel-based watchmaker did well in 2022, with sales up 2.5 % to 7.5 billion Swiss francs, despite a negative currency effect of 151 million and a shortfall of 700 million due to restrictions in China, CFO Thierry Kenel said.

Last year, the group also achieved an operating profit of 1.2 billion Swiss francs, despite the prolonged closure of the Chinese borders. This paralysis still represents a loss of 700 million Swiss francs, as Chinese customers are among the top three largest consumers of timepieces in the world.

Nick Hayek, the group’s CEO, also returned to one of the company’s greatest successes in 2022: the collaboration between Swatch and Omega with the release of the Moonswatch, available in eleven models. In total, more than a million watches were sold, and even today, supply is struggling to keep up with demand.

A green year in 2023?

2023 has also started well for the group in all regions of the world, and Nick Hayek foresees a new growth spurt. The recovery is rather solid in China and Monaco. Europe and America are also showing very good progress.

While reviving the 2014 record of 8.7 billion Swiss francs in revenue achieved in 2014 is within reach, the Swatch boss assures that his primary goal is not to make record sales at any cost: “Maybe we will grow by 10%, maybe by 20 or 25%, the opportunities are there,” he says. “Whether we make a turnover of 8.5 or 9 billion, I don’t care”.

The entrepreneur stated his intention to continue investing in marketing and points of sale, in order to develop the brands (Swatch, Tissot, Omega, Harry Winston, Jaquet Droz…) of the group’s portfolio in the long term and do everything to “reach the customer”.

Swatch hit hard by inflation

While inflation has not directly affected the Swiss watchmaker in 2022, that will change this year, according to Peter Steiger, a member of the group’s management. Between salary increases in Switzerland and abroad, higher energy prices and rents, he expects costs to rise by 3 to 5% in the current year. However, inflation is also reflected in higher customer revenues. And the increase in costs should be offset by the price increase of 4% on average, implemented since the beginning of February.