(updating with details on segments, margins, further details on outlook)
ZURICH (Thomson Financial) - Swatch Group said 2007 gross sales reached a record 5.94 bln sfr, up 17.6 pct year-on-year and boosted by strong sales growth in the finished watch segment as well as the production segment.
The Swiss watch maker also said that given the strong rise in sales across all segments, it expects an above-average increase in operating result and net income for the full year.
Looking ahead into 2008, Swatch said it anticipates further growth in all areas, after seeing double-digit sales growth in January and with strong orders on hand.
In 2007, the group's production segment sported the fastest growth, up 20.9 pct year-on-year at 1.68 bln sfr. Watches & Jewellery rose by 20.4 pct to 4.71 bln sfr, while sales in the Electronic Systems unit were up 6.2 pct year-on-year to 630 mln sfr.
Swatch said the difficult currency environment in the second half of 2007, the continuing rise in the price of gold, platinum, diamonds and precious stones, as well as higher prices for almost all other raw materials, put a squeeze on margins.
However, it said a combination of production and logistics improvements, cost reductions, and selective price increases allowed the group to partially offset these effects.
Swatch said it expects 2008 to see the full positive effect of these measures.
Further investments aimed at reducing bottlenecks in watch components have been made, with more planned for the future, Swatch said. johanna.treeck@thomson.com jmt/ak/jmt/jag COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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