|
RAPAPORT... The Swatch Group reported that net sales rose 8.9 percent year on year to $4.3 billion (CHF 4 billion) for the first half that ended on June 30. Sales returns, allowances and discounts increased 4.8 percent to $186 million (CHF 175 million). Profit improved 6.1 percent to $818 million (CHF 768 million). The first half of the year experienced some currency fluctuation, which had only a slightly positive effect of 1 percent on group sales.  This year, the Swatch Group redefined and modified its segment reports, combining the “Watches & Jewelry” and “Production” segments into a new “Watches & Jewelry” segment, since the increasing integration of a variety of production processed at headquarters rendered the clear demarcation of that production impossible, the company explained. This trend accelerated in March when Swatch purchased Harry Winston Inc., the impact of which will only really become noticeable in the second half of 2013, according to the company. Watch and jewelry net sales rose 9.3 percent year on year to $4.1 billion (CHF 3.87 billion), while electronic systems sales fell 6.3 percent to $158 million (CHF 148 million). Swatch acquired Harry Winston on March 26, which included all jewelry and watch retail activities and a production company in Geneva. As a consequence, Swatch has now incorporated 11 companies into its consolidated structure. These companies will initially appear with provisional values and their balance sheet values will mainly reflect inventories, trade receivables, as well as property, plant and equipment. The net outflow of funds for the Harry Winston purchase was $989 million (CHF 929 million), which included the takeover of $29 million (CHF 27 million) in cash and cash equivalents and $261 millino (CHF 245 million) in net debt. As of the end of June 2013, goodwill, which will be recognized directly in equity, stands provisionally at $606 million (CHF 569 million). Swatch added that Harry Winston's infrastructure was upgraded to better utilize a ''huge potential offered by the brand'' and its organization. Furthermore, in the first few months following the acquisition, all debt was settled, the equity capital base was expanded and, during this process, the inventory was increased. In May, Swatch invested in the singular, largest and purest diamond in the world to date, a 101.73-carat diamond now bearing the name the ''Winston Legacy'' for $26.7 million. Additionally, Swatch stated that the Harry Winston brand has nearly untapped potential in the watch sector, which the company intends to invest in heavily to expand globally. The Swatch Group told shareholders that its outlook ''remains promising'' and a strong second half-year is expected, with the launch of the ''Omega Seamaster Aqua Terra >15000 Gauss,'' the world’s first real antimagnetic watch, as well as the Swatch ''Sistem 51,'' which will be available on the market in November.
|