Swatch lifts sales

 

swatchThe world’s biggest watch group, Swatch, has seen its share price soar after posting an 8.3-per cent increase in sales in 2013, even though it undershot targets due to unfavourable exchange rates.

The Swiss watchmaker said in a statement on Friday before its full results that its sales soared to 8.8 billion Swiss francs ($A10.9 billion) last year, up from 8.1 billion a year earlier.

Swatch, most known for its brightly coloured plastic-cased watches, thereby fell short of the 9.0 billion francs it said a year ago it aimed to generate.

But the shortfall did not come as a surprise, since Swatch chief Nick Hayek had warned for several months that exchange rates might eat into the annual result.

Analysts polled by AWP financial news agency had expected the company to post a sales figure of between 8.7 and 8.9 billion francs.

Even without meeting last year’s target, the sales set a new company record.

The market responded with a standing ovation, sending Swatch’s stock price up more than four percent in afternoon trading to 572 Swiss francs a piece, by far outperforming the Swiss stock exchange’s main index, which was up 0.9 percent.

“Swatch Group is clearly winning market share,” Kepler Cheuvreux analyst Jon Cox told AFP in an email.

In 2013, Swatch Group faced “an extremely adverse currency situation”, the company noted in a statement, stressing its sales figure had been hard-hit by an over-valuation of the Swiss franc against the dollar and the yen.

“In the second half of the year, the negative effect on sales due to exchange rates was over 100 million francs,” the company lamented.

Despite the currency impact, Swatch said it expected to posted good operating profit and net income results when it publishes its full 2013 earnings, no later than February 20.

AFP

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