January 30, 2018 / 11:44 AM / a year ago

Swatch's Hayek targets high-single-digit growth for 2018

ZURICH (Reuters) - Swatch Group (UHR.S) Chief Executive Nick Hayek is targeting faster sales growth this year after the world’s largest watchmaker increased momentum at the end of 2017 and saw good signs from January trading.

CEO and Chairman of the Board of the Swatch Group Nick Hayek smiles during the Swiss watchmaker's annual news conference in Biel, Switzerland March 16, 2017. REUTERS/Denis Balibouse

“We are seeing high-single-digit growth in January despite last year having the impact of Chinese New Year as well. The indication from the sell-out is plus 8 to plus 9 percent compared with a year earlier, so it’s a very good start,” Hayek told Reuters in an interview.

“For the full year, high-single-digits sales growth in constant currencies is certainly something we have the capability to do. It’s a good objective to have,” he added.

He was speaking after Swatch posted a 5.8 percent rise in 2017 sales when currency swings were removed. Net profit rose 28 percent, the first increase it has reported in four years.

The result sent the company’s stock 3 percent higher.

The company, which owns brands including Omega and Tissot, was gaining momentum and taking market share from rivals, Hayek said.

“I am positive, not optimistic, because I know the business. There is no reason not to be positive,” he said. “All segments are growing and healthy.”

The executive also welcomed the recent weakening of the Swiss franc, whose strength has weighed on the profitability of watchmakers particularly in the cheaper price segments.

Looking ahead, Hayek said it would be possible to increase profitability. Swatch’s operating profit margin rose to 12.6 percent in 2017 from 10.7 percent a year earlier.

“The margins are good. If we get 9 or 10 percent more turnover you can imagine we will get back to sweet margins,” Hayek said.

Reporting by John Revill

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