Swatch Group Sales 2003 – Strong 2nd half 2003
Biel, February 5, 2004
Overview of the whole Group
In the difficult year 2003, the Swatch Group once again succeeded in
consolidating its leading position and winning new market share. As was
already the case in the previous year, the Group again faced major challenges
Restatement of the segments
To take better account of the products and markets of the Microcomponents and Omega Electronics companies within Group structures, these two businesses were transferred from the «Watch, Watch Movements and Component Production Division» to the «Electronic Systems» segment. The resulting prior-year changes are shown below for both divisions. At Group level, sales and results are not
Production of Watches, Movements and Components
These changes have already been taken into account in the following commentaries on the divisions.
Our strategy of avoiding short-term price increases due to currency
fluctuations has successfully helped us to gain market share. Once again
the trend of sales of the individual brands was positive. Brands such
as Swatch and Rado which were particularly hard-hit in the first half
of the year gained ground in the second half.
Watch, watch movement and component production
The decline in sales is a consequence of more cautious ordering of watch movements and components, especially by third party customers of the watch industry; this downturn in orders was more marked in the second half. It is explained by the sales situation in the first half for which the causes are well known. The decline of internal deliveries must be seen from the angle of continuous and intensive efforts to further optimise stocks at every level. In addition, sales in value terms were also reduced by currency-related pressure on prices for movements produced and sold in the Far East in the lowest price category.
In the field
of electronic systems, demand recovered in the second half of 2003, in
line with expectations. Recent months have seen a substantial revitalisation
in every area of this particular segment. Market forecasts for chips and
quartz show significant growth for subsequent years from which Group member
companies should also benefit.
Profit forecast 2003 and initial outlook for 2004
of the 2003 sales figures, the action taken to cut costs and accelerated
growth in the second half of the year, the Board of Directors and the
Group Management Board are confident that they will be able to present
satisfactory operating and Group result figures on March 25, 2004, even
against the background of a strong Swiss franc.
5Profit forecast 2003 and initial outlook for 2004 Because of the 2003 sales figures, the action taken to cut costs and accelerated growth in the second half of the year, the Board of Directors and the Group Management Board are confident that they will be able to present satisfactory operating and Group result figures on March 25, 2004, even against the background of a strong Swiss franc. The Group continues to enjoy an extremely strong financial position and generates a highly respectable cash flow which, in conjunction with world-renowned brands and the strong industrial base, will permit further expansion of the Group. Despite sustained problems and uncertainties on the world market, the Swatch Group recognises significant possibilities for further expanding its position and will mobilise all its forces to achieve the set objectives and expectations. However, events beyond our control, a further massive increase in the value of the Swiss franc against our main currencies and other external influences and their possible impact on the Swatch Group cannot be fully allowed for in our plans.
the SWX has completed its preliminary investigation and reported that
the Swatch Group did not infringe upon the rules on ad hoc publicity,
in the interests of transparency, the Group will revert to its open, spontaneous
and, in exceptional cases, unconventional communication policy with analysts
and investors within a clearly-defined framework compliant with stock
market rules. This return to our new, “old” communication policy will
take effect immediately.
CFO, et Thomas Dürr, Corporate Treasurer
Howald, PR & Press Office