Swatch Group Reports a 74% Profit Decline in 2024 Amid Challenging Market Conditions

Swatch Group, one of the largest watchmaking conglomerates in the world, has released its financial report for 2024, revealing a significant 74% decline in net profit compared to the previous year. The downturn was primarily driven by weakening demand in China and Southeast Asia, while markets such as the United States, Japan, India, and the Middle East showed more resilience.

Financial Performance Overview

Revenue & Profit Decline

• Total revenue: CHF 6.735 billion, representing a 12.2% decline at constant exchange rates and 14.6% at current exchange rates.

• Operating profit: CHF 304 million, reflecting continued margin pressures.

• Net profit: CHF 219 million, a sharp drop from CHF 1.191 billion in 2023.

• Operating cash flow: CHF 333 million, nearly 50% lower than the previous year’s CHF 615 million.

• Net cash reserves: CHF 1.37 billion, down from CHF 1.98 billion in 2023.

This decline follows the record-breaking year of 2023, when luxury watch exports reached an all-time high. However, macroeconomic challenges, shifting consumer sentiment, and slowing demand in key markets created significant obstacles in 2024.

Regional Market Performance

China & Southeast Asia: A Major Decline

Swatch Group’s performance was significantly impacted by declining demand in China, including Hong Kong and Macau. The Chinese luxury market, which has long been a key driver of Swiss watch sales, contracted due to weak consumer confidence, economic uncertainty, and reduced spending on high-end goods.

Stronger Growth in the US, Japan, India & the Middle East

While China struggled, other key regions showed positive trends:
✔️ United States: Growth in the mid-range and luxury watch segments helped offset declines elsewhere.
✔️ Japan: The strong yen and stable domestic luxury demand contributed to growth.
✔️ India: A rapidly expanding luxury market supported increased sales.
✔️ Middle East: The region remained resilient, benefiting from high-net-worth clientele and luxury tourism.

Performance by Brand Segment

Luxury Brands: The Most Affected

Breguet and Blancpain, two of Swatch Group’s most prestigious high-end brands, suffered the most from declining demand, particularly in China and Hong Kong. These brands, which target ultra-high-net-worth collectors, faced challenges due to reduced luxury spending and economic uncertainty in key markets.

Jewellery & Premium Watch Brands Remain Stable

Harry Winston and Omega showed relatively stable performance, particularly in the United States and Japan. While the luxury market softened overall, demand for Omega’s core collections remained consistent.

Mid-Range Brands: More Resilient

✔️ Longines, Rado, and Tissot maintained solid performance in several key regions, including the US, Japan, and India.
✔️ Swatch continued to be a major player in the accessible luxury segment, though no official data was provided on the performance of specific collections.

Market Challenges in 2024

1️⃣ Decline in Global Watch Exports
Swiss watch exports fell by nearly 3%, reflecting a slowdown in demand for high-end timepieces.

2️⃣ China’s Economic Slowdown
Economic pressures, including a weaker yuan and lower consumer confidence, negatively impacted watch sales.

3️⃣ Changing Consumer Behaviour
Consumers increasingly prioritised experiences over high-ticket luxury purchases, impacting the demand for traditional luxury watches.

Outlook for 2025: Swatch Group’s Strategy

Despite a challenging 2024, Swatch Group expects a more favourable outlook in 2025, citing positive momentum in December and stronger demand in certain regions.

Strategic Focus for 2025:
✅ Targeting Growth Markets – Increased focus on India, the Middle East, and Japan to diversify beyond China.
✅ Strengthening Mid-Range & Accessible Luxury Brands – Expansion of Longines, Rado, and Tissot in growing markets.
✅ Retail & Digital Expansion – Enhancing direct-to-consumer strategies and online retail presence.

While challenges remain, Swatch Group remains optimistic about recovery in 2025, driven by strong regional performance outside of China and continued innovation across its diverse portfolio of brands.