By John Revill
ZURICH--Swatch Group AG (UHR.VX), the world's largest
watchmaker, Monday reported a 26% increase in full-year net income
in a "nervous economic environment," but said 2013 has begun well
with healthy growth in January.
The Swiss owner of brands including Omega, Tissot and Longines
said its annual profit grew last year by a quarter from 2011, to
1.61 billion Swiss francs ($1.77 billion).
The performance beat forecasts of CHF1.49 billion.
"The signals from the markets around the world clearly indicate
continued healthy growth potential for the Swiss watch industry and
the Swatch Group," Swatch said in a statement. "Against this
backdrop, there is a realistic prospect of long-term growth in the
Swiss watch industry of 5% to 10% per year," it said.
Like many other luxury companies, Swatch has been relatively
unscathed by the shaky global economy, which has humbled other
industries.
Sales of watches have been buoyed by strong growth in China,
where luxury brands are opening luxurious boutiques to boost sales
and enhance their reputation, as well as by Asian tourists buying
souvenirs on European vacations.
Signs of a weakness, however, have recently emerged, with watch
exports increasing at lower rates in recent months as China - the
world's third largest market for Swiss watches - slows down.
The growth in exports of Swiss timepieces to China slowed to
4.4% in the first 11 months of 2012, according to figures from the
Federations of the Swiss Watch Industry, down from a 49% rise in
2011.
Rival watchmaker Compagnie Financerie Richemont SA (CFR.VX) said
its sales growth slowed during its third quarter, while Tiffany
& Co. reported lower than expected sales for the two months to
Dec. 31.
Last month Swatch, best known for its eponymous plastic watches,
reported annual sales had risen 14% to CHF8.14 billion.
The company's shares closed Friday at CHF517.50, valuing it at
CHF27.02 billion.
Write to john.revill@dowjones.com
Order free Annual Report for The Swatch Group AG
Visit http://djnweurope.ar.wilink.com/?ticker=CH0012255151 or
call +44 (0)208 391 6028
Order free Annual Report for The Swatch Group AG
Visit http://djnweurope.ar.wilink.com/?ticker=US8701231065 or
call +44 (0)208 391 6028
Subscribe to WSJ: http://online.wsj.com?mod=djnwires