The Swatch Group (UHR) H1 2024 earnings summary

Executive summary

• Net sales declined 14.3% year-over-year to CHF 3,445 million, with a negative currency impact of CHF 145 million.

• Operating profit dropped to CHF 204 million from CHF 686 million, with margin falling to 5.9% from 17.1%.

• Net income decreased to CHF 147 million, down 70.5% year-over-year, with net margin at 4.3%.

• Sales decline mainly due to reduced demand for luxury goods in China, while Swatch brand sales in China rose 10%.

• Sales outside China in local currencies matched 2023 record levels; Japan and USA achieved record or stable sales.

Financial highlights

• Net sales: CHF 3,445 million, down 14.3% year-over-year (down 10.7% at constant rates).

• Operating profit: CHF 204 million, margin 5.9% (previous year: 17.1%).

• Net income: CHF 147 million, margin 4.3% (previous year: 12.4%).

• Basic EPS: CHF 0.52 (registered shares), CHF 2.62 (bearer shares), both down sharply year-over-year.

• Net liquidity at CHF 1,434 million, down from CHF 1,988 million at end-2023.

Outlook and guidance

• Chinese market expected to remain challenging for luxury goods through year-end, but long-term potential remains.

• Strong growth anticipated in Japan and USA, with promising prospects in many European countries.

• Cost-cutting program is starting to show results, with further improvement expected in H2 2024.

• Group expects a strong improvement in the second half of 2024.