Swatch Group Released The First Half Of 2015 Financial Report

Based on a constant exchange rate, the Swatch Group’s net sales in the first half of 2015 reached 4.248 billion Swiss francs, a year-on-year increase of 3.6%. Taking into account the worsening exchange rate situation, the Sales were down 56 million Swiss francs (1.4%). The decision of the Swiss National Bank (SNB) on February 15, 2015 had a huge impact on finances and currencies, and caused an imbalance in sales prices in different currency areas. If measured in euros, the net sales increase was 18.7%. However, the Swatch Group will not blindly pursue short-term benefits. Instead, it will continue to maintain a long-term defensive price marketing strategy.

Calculated at constant exchange rate, net sales increased by 3.6% year-on-year to 4.248 billion Swiss francs; calculated at current exchange rates, net sales increased by 2.2% year-on-year to 4.192 billion Swiss francs; if calculated in euros, net sales increased by 18.7 %.
Calculated at a constant exchange rate, the Swatch Group’s watch and jewelry division (including manufacturing) saw net sales increase by 3.4%; in comparison, as of the end of May, the overall watch exports of the Swiss watch industry fell by 1.1%.
· In May and June 2015, sales growth accelerated.
Affected by exchange rate changes, operating profit was 761 million Swiss francs (18.2% of net sales), a decrease of 8.3% from 830 million Swiss francs in the same period last year.
· Watch and jewelry division (including manufacturing) operating profit accounted for 20% of net sales.
Affected by the strong Swiss franc and negative interest rates, net profit (548 million Swiss francs) decreased by 19.4% compared with the same period last year (680 million Swiss francs).
· Positive factors for the outlook for the second half of the year: (1) Omega Seamaster series Aqua Terra 150m James Bond limited edition watch released (2) Omega and Swiss Federal Institute of Metrology METAS new watch certification program launched (3) Swatch Touch Zero Release of One Watch and Swatch’s Near Field Communication NFC without battery power (4) The production of the highly successful Tissot T-Touch Expert Solar watch increased.

Outlook
   On the whole, different parts of the Swatch Group are improving in the global market. Despite the Swiss franc’s dilemma, I believe that the development momentum in the second half of the year will be stronger. After MERS, South Korea’s tourism industry will stabilize, and sales in Greater China will further increase. For all brands, achieving growth requires high-level marketing investment, expanding the sales network, and continuously launching various new products.
   Globally, the demand for high-end consumers for Swiss watches, especially mechanical watches, has continued to increase. Under such circumstances, the Swatch Group will adhere to a long-term strategy to increase market share, and the positive growth of sales in local currencies in each market is realistic and predictable.

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