Swatch Drops as Hayek Downplays Industry Growth ExpectationsThomas Mulier
Swatch Group AG, the biggest maker of Swiss timepieces, fell as much as 3.1 percent in Zurich trading after Chief Executive Officer Nick Hayek sought to downplay expectations over industry growth prospects.
“The industry has seen very strong growth” of 15 percent to 30 percent in recent years, Hayek said at a press conference at the Grenchen, Switzerland factory of Swatch’s ETA watch-component unit. “It would be formidable for the Swiss watch industry to grow 5 percent to 10 percent this year and it’s possible. So we need to calm the spirits” on expectations.
Swatch fell as much as 17 Swiss francs to 527.5 francs and was down 1.8 percent at 534.50 francs as of 1:52 p.m.
The company has the potential to achieve revenue of 9 billion Swiss francs ($9.5 billion), though that’s not a target, Hayek said. Swatch said last month it expects the industry to expand 5 percent to 10 percent a year over the long term. Full-year operating profit rose 23 percent to 1.98 billion francs, the maker of Omega watches said at the time. Gross revenue was 8.14 billion francs in 2012.
The first two months of 2013 have shown growth, Hayek said today. Swatch always aims to outpace the market, he said. The CEO also said there’s been a slowdown in gift-giving in China.
Swatch said in January it’s buying the Harry Winston watch and jewelry brand for about $1 billion.