Swatch Group: Time will tell

Research evidence excerpt

Swatch Group: Time will tell

iQprofile SM Swatch Group

Key Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(CHF Millions) Luxury Goods

Sales 6,735 6,280 6,564 6,974 7,321

EBITDA Adjusted 720 558 753 944 1,158

Depreciation & Amortization (416) (423) (423) (423) (423) Company Description EBIT Adjusted 304 135 330 521 735

Net Interest & Other Income 41.0 15.0 16.0 16.0 16.0 Swatch Group is one of the world's leading watch

Tax Expense / Benefit (126) (133) (104) (150) (188) manufacturers, founded in 1983. Its portfolio comprises 16

Net Income (Adjusted) 193 3.00 225 367 541 watch & jewellery brands (which include Swatch, Omega,

Average Fully Diluted Shares Outstanding 51.7 51.9 51.9 51.9 51.9 Tissot and Longines) cover all segments of the market, and

Key Cash Flow Statement Data account for 95% of group revenues and all incremental

Net Income (Reported) 191 3.00 225 367 541 profitability. Swatch also controls the whole production

Depreciation & Amortization 416 423 423 423 423 chain with more than 100 factories producing locally in

Change in Working Capital (319) 339 (15.8) (123) (119)

Switzerland. The remainder of group sales includes an Deferred Taxation Charge 0 0 0 0 0

Other CFO 45.0 (258) (72.0) (72.0) (72.0) electronic systems business.

Cash Flow from Operations 333 507 560 595 773

Capital Expenditure (549) (451) (328) (349) (366)

(Acquisition) / Disposal of Investments (3.00) 0 0 0 0 Investment Rationale

Other CFI 0 105 105 105 105 We think the worst of the watch downturn is behind us,

Cash Flow from Investing (552) (346) (223) (244) (261)

therefore Swatch can start to rebuild EBIT. Cash, gold and

Share Issue / (Repurchase) (50.0) 0 5.00 5.00 5.00

Cost of Dividends Paid (335) (234) (234) (234) (260) diamonds represents 30% of the market cap.