Swatch Group recovered from the unprecedented challenges of the covid pandemic in the first half of 2020 to end the year with a net loss of just CHF 53 million, a swing of CHF 800 million from FY 2019.
Net sales in the second half of the year were down 14% at constant exchange rates, but 55% up on the first half.
The group reported strong December sales, despite lock downs returning in important markets such as Germany and Great Britain.
Group net sales for the full year totalled CHF 5.6 billion, down 29%.
Cost cutting measures, including a 10% cut to its global workforce, allowed the group to improve operating margins in the second half of the year and improve net liquidity by CHF 332 million.
The group closed 384 retail stores last year including almost two-thirds of the 92 outlets in Hong Kong, but it also opened 55 new stores in growth markets.
Ecommerce growth of 70%, could not compensate for sales losses in traditional retail. Even in middle and basic price segment, ecommerce only contributed between 20% and 30% of sales.
Production of watches, jewellery and components was gradually increased in the latter months of the year, but will only reach capacity again in the first half of 2021, the company reports.
Travel retail was hit hard but mainland China recorded double-digit sales growth for the full year.
Sales in the United States nudged back towards growth in December and Tissot notched its best sales ever in the lead up to Christmas. Swatch Group hopes that the launch of T-Touch Connect Solar, which will only be launched in the USA in early 2021, will improve performance even further.
Manufacturing returned to more normal production levels in the second half and ended the year just 4% down, but the picture was mixed. Production for third parties continued to report below-average capacity utilization. In other areas, demand exceeded production capacities, which lead to bottlenecks, for example, in production for Blancpain, Omega, Longines and Tissot.
In addition, Omega suffered a 10-day production interruption due to a cyber-attack, which led to delivery delays and lost sales.
For 2021, the group is forecasting sales approaching those of 2019, with significantly improved margins.