SWATCH GROUP 
PRESS RELEASE | AD HOC
Biel / Bienne, 13 July 2023
Ad hoc announcement pursuant to Art. 53 of the Listing Rules
SWATCH GROUP: Half-Year Report 2023
- Net sales of CHF 4 019 million, +18.0% to the previous year at constant exchange rates (+11.3% at current rates), despite a massive negative currency impact of CHF -242 million.
- Net sales exceeded the previous record half-year 2018 by +8.5%, at constant exchange rates.
- Double-digitgrowth in all watch and jewelry price segments, with strongest growth in the lowest price level.
- Operating profit increased by +36.4% to CHF 686 million (previous year: CHF 503 million).
Operating margin of 17.1% (previous year: 13.9%). - Net income increased by +55.6% to CHF 498 million (previous year: CHF 320 million).
Net margin of 12.4% (previous year: 8.9%). - Operating cash flow of CHF 281 million (previous year: CHF 287 million).
- Net liquidity1) of CHF 2 099 million (previous year: CHF 2 397 million).
- Equity of CHF 12.1 billion (previous year: CHF 11.7 billion).
Equity ratio of 86.0% (previous year: 85.5%). - Excellent prospects for the second half of 2023 in all markets and price segments.
- Cash and cash equivalents as well as financial assets, securities and derivative financial instruments minus current financial debts and derivative financial liabilities
1
Press release | 13 July 2023 |
HALF-YEAR REPORT
Group Key Figures
1st half | 1st half | |||||
(CHF million) | 2023 | 2022 | ||||
Net sales | 3 612 | |||||
4 019 | ||||||
Operating result | 503 | |||||
686 | ||||||
- in % of net sales | 17.1% | 13.9% | ||||
Net result | 320 | |||||
498 | ||||||
- in % of net sales | 12.4% | 8.9% | ||||
Investments in non-current assets | 158 | |||||
379 | ||||||
Equity, 30 June | 12 063 | 11 699 | ||||
Market capitalization, 30 June | 13 302 | 11 516 | ||||
Basic earnings per share in CHF | ||||||
- Registered shares | 1.88 | 1.20 | ||||
- Bearer shares | 9.38 | 6.00 | ||||
Unaudited figures
Change in %
at constant currency
rateseffect
18.0%-6.7%
Total
11.3%
36.4%
55.6%
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Press release | 13 July 2023 |
HALF-YEAR REPORT
Highlights of the first half 2023
At constant exchange rates, Group net sales for the first half of 2023 were +18.0% above the previous year. The negative currency impact was significant and amounted to -6.7%, or CHF -242 million. At constant exchange rates, sales were even +8.5% above the previous half-year record in 2018.
Watches & Jewelry
The Watches & Jewelry segment (including Production) achieved a significantly increased operating margin of 19.4% (previous year: 15.7%). The first half of 2023 was characterized by the lifting of the last travel restrictions in Asia, which resulted in significant sales increases in local currencies in most major markets. In addition to the expected recovery in Mainland China, with a clear double-digit increase, tourism destinations such as Thailand or Macao in particular benefited from the rapid rise in travel activity. After years of declining consumption, business in Hong Kong SAR has completely revived, resulting in a tripling of sales. The most important Euro- pean markets also recorded very strong growth, led by Switzerland with an increase of almost 50%, followed by Italy, Spain and France. Sales in North America developed extremely well, particularly in the lower and medium price segments, with high double-digit growth rates.
Global demand for Swatch watches and the MoonSwatch not only continued unabated, but even accelerated. The Tissot brand performed extremely strongly, with significant market share gains in North America. The outstanding development of the Group's own retail network, with growth rates well above 20%, underlines the unique positioning of the Group's brands. The retail businesses of Harry Winston, Omega, Longines and Swatch developed very successfully. The share of sales of the Group's own retail business exceeded the 40% mark of total sales of the Watches & Jewelry segment in the first half of 2023, with average sales per store more than 30% above the previous year. Additionally, the Group was able to acquire a prime property on Old Bond Street in London and a store on the Champs-Elysées in Paris.
Production
Strong demand for products from our brands, particularly Swatch and Tissot, helped the Group's production companies to achieve very good capacity utilization. Timely procurement of the required raw materials remains a major challenge. Order books at the end of June 2023 were 20% over the previous year. The production companies are investing even more than in the past in vocational and technical training in order to alleviate the tense situation on the labor market. Swatch Group is the largest training company in the Swiss watch industry and will welcome a record number of new apprentices in August.
Electronic Systems
Sales and margins in this segment were negatively impacted by the weakness of the USD and EUR. Nevertheless, the segment's order books at the end of June 2023 were at a similarly high level as in the previous year. For Swiss Timing, 2023 is an interim year without the Olympic Games, which led to a significantly lower result compared to the previous year. Segment sales in the first semester 2023 were +3.3% above prior year (at constant rates) and operating profit reached CHF 9 million, corresponding to an operating margin of 4.9%.
Inventories
Inventories increased by CHF 314 million or +4.6% compared to December 2022, mainly in the categories of raw materials, work in progress and semi-finished goods. This allowed ensurance of increased production on the one hand and further completion of the safety stock of raw materials and components on the other hand in order to improve even more the independence from third party suppliers.
Personnel
The number of employees increased by 2.6% in the first semester 2023 and amounted to 32 899 persons at the end of June (December 2022: 32 061).
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Press release | 13 July 2023 |
HALF-YEAR REPORT
Outlook for the second half of 2023
Group Management sees excellent growth opportunities in local currencies for the second half of 2023 in all regions and price seg- ments. The Group brands will introduce many innovative products on the market, especially - but not only - in the lower and midrange segments. The only cloud on the horizon remains the unfavorable currency environment.
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Press release | 13 July 2023 |
HALF-YEAR FINANCIAL STATEMENTS
Consolidated Income Statement
1st half | 2023 | 1st half | 2022 | ||||||
CHF million | % | CHF million | % | ||||||
Net sales | 4 019 | 100.0 | 3 612 |
Other operating income | 64 | 1.6 | 137 |
Changes in inventories | 398 | 9.9 | 261 |
Material purchases | -967 | -24.1 | -889 |
Personnel expense | -1 292 | -32.1 | -1 199 |
Depreciation and impairment on property, plant and equipment | -171 | -4.3 | -186 |
Amortization and impairment on intangible assets | -21 | -0.5 | -20 |
Other operating expenses | -1 344 | -33.4 | -1 213 |
Operating result | 686 | 17.1 | 503 |
Other financial income and expense | -28 | -0.7 | -35 |
Interest expense | -2 | -0.1 | -3 |
Share of result from associates and joint ventures | -4 | -0.1 | -22 |
Ordinary result | 652 | 16.2 | 443 |
Non-operating result | 1 | 0.0 | 0 |
Result before income taxes | 653 | 16.2 | 443 |
Income taxes | -155 | -3.8 | -123 |
Net result | 498 | 12.4 | 320 |
Attributable to shareholders of The Swatch Group Ltd | 486 | 311 | ||||||
Attributable to non-controlling interests | 12 | 9 | ||||||
Earnings per share in CHF | ||||||||
Registered shares | ||||||||
Basic earnings per share | 1.88 | 1.20 | ||||||
Diluted earnings per share | 1.87 | 1.20 | ||||||
Bearer shares | ||||||||
Basic earnings per share | 9.38 | 6.00 | ||||||
Diluted earnings per share | 9.37 | 6.00 | ||||||
Unaudited figures
100.0
3.8
7.2
-24.6
-33.2
-5.1
-0.6
-33.6
13.9
-0.9
-0.1
-0.6
12.3
0.0
12.3
-3.4
8.9
5
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The Swatch Group AG published this content on 13 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 July 2023 05:11:04 UTC.
