Swatch CEO Says Strong Franc to Weigh on Full-Year Revenueby
Sales could be 1%-2% higher or lower in 2015, Hayek says
Japan sales rising 40% ex-currencies, Europe is double-digit
Swatch Group AG Chief Executive Officer Nick Hayek indicated full-year sales at the maker of Omega and Tissot timepieces may remain near last year’s level as the strong franc weighs on exports of Swiss watchmakers.
“It can be that at the end of the year we’re up 1 percent, 2 percent, or minus,” Hayek said at a press conference in Biel on Wednesday. “It also depends on currencies.”
The Swiss watch industry has been struggling with weak demand in Asia, a surge in the franc and competition from Apple Inc.’s smartwatch. The country’s exports of timepieces had their biggest drop since 2009 in the third quarter and are on track for a full-year decline.
The stock traded 0.4 percent lower at 369.80 francs as of 2:44 p.m. in Zurich and has dropped 17 percent this year.
Analysts expect Swatch’s sales to rise 1 percent in 2015, according to estimates compiled by Bloomberg. Hayek spoke after a press conference on Omega certifying its watches are resistant to magnetism, adding that his comment isn’t an official forecast.
Swatch’s Japanese revenue is rising more than 40 percent in local currency, Hayek said. Europe has double-digit growth, and Russia is up more than 20 percent, also excluding currency shifts. Sales in South Korea are rebounding after an outbreak of the MERS virus damped tourism earlier this year, he said.
“Asians are buying elsewhere,” Hayek said. “The Chinese buy in Europe, they travel to Paris. They don’t go to Hong Kong anymore, but they go to Japan.”
Swatch’s Tissot brand had double-digit growth in the U.S. in dollar terms in September, Hayek also said.