Swatch Shares Advance on Increased Orders at Baselworld FairCorinne Gretler and Jan Schwalbe
Swatch Group AG, the biggest maker of Swiss watches, reported an increase in watch orders at this year’s Baselworld, sending the shares up as much as 3.4 percent.
Sales growth in 2015 will probably be near the higher end of the company’s 5 percent to 10 percent forecast range, which excludes currency shifts, Chief Executive Officer Nick Hayek told Neue Zuercher Zeitung in an interview published Friday.
“Baselworld 2015 was excellent for Swatch Group,” Beatrice Howald, a spokeswoman, wrote by e-mail. “The quantities ordered and their value increased compared to 2014. The ambience and the consumer climate were very good.”
The Swiss watch industry is grappling with a slowdown in revenue as a 15 percent surge in the franc this year against the euro takes its toll on the euro zone market. Some of Swatch’s 18 brands have increased prices as much as 10 percent in that region to adjust for the weaker euro.
The stock traded 2.7 percent higher at 420.40 francs as of noon in Zurich.
Longines, Omega, Blancpain and Tissot had order increases of high single-digit or double-digit percentages compared to last year’s Baselworld fair, Hayek also told the Swiss newspaper.
Andreas von Arx, an analyst at Helvea, estimated the company’s sales will rise 7.7 percent this year, excluding currency shifts. Including that effect, analysts expect a 2 percent increase, according to estimates compiled by Bloomberg.
Apple Inc.’s smartwatch goes on sale April 24, and the company has said the battery on a test model lasted as many as 18 hours using various features. However, making phone calls reduced that to three hours, and the watch can play music for 6 1/2 hours.
“The hype is already over” about smartwatches, Hayek said, according to the newspaper. “Nobody is talking about a killer app. The battery remains a disappointment.”
TAG Heuer, owned by LVMH Moet Hennessy Louis Vuitton SE, announced an alliance with Google Inc. and Intel Corp. during Baselworld to develop a smartwatch. Swatch has no plans to partner with Google nor Intel, as the company has its own technology, Hayek told the newspaper.
In 2004, Swatch and Microsoft Corp. unveiled the Swatch Paparazzi, a watch line that could receive data such as stock quotes and weather. When the U.S. software company lost interest in the project, Swatch was unable to continue, Hayek said, according to the newspaper.
“We have our own know-how,” NZZ cited him as saying. “This is one of the lessons we have learned from our partnership with Microsoft.”