The Swatch Group Ltd

Latest Results (27.10.2025):

The Swatch Group Ltd reported its Half-Year financial results for 2025, highlighting a challenging environment marked by declining sales in China but offset by strong growth in other regions. Despite a decrease in net sales and operating profit compared to the previous year, the company demonstrated resilience with improved operating cash flow and maintained a solid equity position.

Net Sales Decline

Net sales for the first half of 2025 reached CHF 3,059 million, representing a decrease of 7.1% compared to the previous year at constant exchange rates and on a comparable basis. At current rates, sales declined by 10.4%, impacted by a negative currency effect of CHF 113 million.

Operating Profit and Margins

The operating profit fell to CHF 68 million from CHF 204 million in the previous year, resulting in an operating margin of 2.2%, down from 5.9%. The Watches & Jewelry segment (excluding Production) maintained a healthy operating margin of 10.1%, with the second quarter achieving 13.5%.

Net Income and Margin

Net income for the period decreased significantly to CHF 17 million from CHF 147 million, with the net margin dropping to 0.6% compared to 4.3% last year.

Operating Cash Flow

Operating cash flow saw a substantial increase, rising to CHF 180 million from CHF 90 million in the previous year, indicating improved cash generation despite lower profits.

Liquidity and Equity

The company’s net liquidity stood at CHF 1,091 million, down from CHF 1,376 million at the end of December 2024. Equity was reported at CHF 11.7 billion, with an equity ratio of 86.2%, slightly decreased from 87.3% in December 2024.

Regional Sales Performance

The decline in overall sales was exclusively due to reduced performance in China, including Hong Kong SAR and Macau SAR. In contrast, sales in other regions reached record levels for 2023 and 2024 in local currencies, with double-digit growth in North America, India, Turkey, the Middle East, and Australia. Key brands like Omega, Longines, Rado, Tissot, Hamilton, and Swatch saw sales increases of 10% to 30% in the USA.

Positive Trends in China

There are initial positive signs of improvement in the Chinese market, particularly in e-commerce and inventory reductions at retailers. The Swatch Group Ltd anticipates an enhanced market environment in the Greater China region in the second half of the year.

Production Segment Challenges

The Production segment experienced a strongly negative operating result, attributable to the strategic decision to maintain production capacities and jobs in Switzerland, ensuring long-term operational stability.

Future Outlook

Looking ahead to the second half of 2025, The Swatch Group Ltd expects continued growth potential in the USA, Japan, and India. The company anticipates further reductions in inventories at Chinese retailers and a recovery in orders, supported by positive trends in e-commerce. Additionally, increased production capacity utilization is expected, driven by numerous new product launches across all price segments.