SWATCH GROUP: Half-Year Report 2020

• After a strong January with an operating margin of 21.4% in the Watches & Jewelry segment (without Production) and 17.3% for the overall Group, massive decline due to state-ordered closings of at times up to 80% of distribution channels worldwide.
• Group net sales of CHF 2 197 million, -43.4% to the previous year at constant exchange  rates, or -46.1% at current rates. The strong Swiss Franc reduced sales by CHF 113 million, or -4.9%.
• Operating loss of CHF -327 million compared to operating profit of CHF 547 million in the previous year.
• Return to a positive operating result in the month of June for the overall Group.
• Net loss of CHF -308 million, compared to net profit of CHF 415 million in the previous year.
• Positive operating cash flow.
• Solid equity base of CHF 10.8 billion, with an equity ratio of 84.6% and a net liquidity¹⁾ of CHF 944 million, 29% or CHF 213 million higher than the previous year.
• Very high customer demand in all price segments in markets which have already overcome the lockdown. Double-digit growth in Mainland China in May and June compared with the previous year.
• Strong second half expected, with a positive operating result for the entire year.

Outlook for the second half of 2020

The Group’s management is convinced that the sales and profit situation will improve quickly in the coming months, parallel to the further easing of Covid-19 measures in the countries. The positive outlook is strengthened by the new products which will be launched in the second half of the year, as well as the lower cost base. This will lead to increased production capacity in the third and fourth quarter 2020. A positive operating result is expected for the full year.                

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¹⁾ Cash and cash equivalents and marketable securities and derivative financial instruments minus current financial debts and derivative financial instruments