Company DescriptionThe Swatch Group AG designs, manufactures, and sells finished watches, jewelry, and watch movements and components worldwide. It operates through Watches & Jewelry and Electronic Systems segments. The Watches & Jewelry segment designs, produces, and commercializes watches and jewelry. The Electronic Systems segment is involved in the design, production, and commercialization of electronic components, as well as sports timing activities. It is also involved in the provision of assembly, research and development, administration, watch case polishing, logistics and distribution, and customer services; and hard material products, microelectronics, watch cases and crowns, miniature low-frequency quartz crystals, thin wires, miniature batteries, watch dials and bracelets, watch hands, sports timing technology and equipment, precision parts, and assembly electronic components. In addition, the company engages in retail, communication, real estate project and property management, finance, reinsurance, and art center businesses. It offers its watch and jewelry products primarily under the Breguet, Harry Winston, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Balmain, Certina, Mido, Hamilton, Calvin Klein, Swatch, and Flik Flak brands. The Swatch Group AG was founded in 1983 and is headquartered in Biel/Bienne, Switzerland.

How the Company Makes Money

The Swatch Group Financial Statement Overview

Summary

The Swatch Group's financial performance shows a strong balance sheet with low leverage, which is a positive indicator of financial stability. However, declining revenue, profitability, and cash flow present significant challenges. Despite effective cost management maintaining strong gross profit margins, operational issues have led to decreased EBIT and EBITDA margins.

Income Statement

Positive

The Swatch Group's income statement reflects a volatile revenue trend with recent declines. The gross profit margin remains strong, indicating effective cost management. However, net profit margin has significantly dropped due to reduced net income, impacting overall profitability. EBIT and EBITDA margins have also decreased, highlighting operational challenges.

Balance Sheet

Very Positive

The balance sheet shows a robust equity position with a low debt-to-equity ratio, suggesting financial stability and low leverage risk. The return on equity has decreased, reflecting the drop in net income. The equity ratio remains high, indicating the company is primarily funded by equity, which is a strength.

Cash Flow

Neutral

The cash flow statement indicates decreasing operating cash flow and negative free cash flow, leading to concerns about liquidity. The operating cash flow to net income ratio suggests cash generation issues. The declining free cash flow growth rate poses a risk to future financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.74B	7.89B	7.50B	7.31B	5.59B
	Gross Profit
5.60B	6.33B	3.10B	2.89B	1.62B
	EBIT
304.00M	1.19B	1.03B	989.00M	-8.00M
	EBITDA
768.00M	1.55B	1.44B	1.43B	455.00M
	Net Income Common Stockholders
193.00M	869.00M	807.00M	765.00M	-51.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.40B	2.05B	2.55B	2.66B	1.79B
	Total Assets
13.99B	14.23B	13.89B	13.68B	12.90B
	Total Debt
13.00M	75.00M	6.00M	99.00M	91.00M
	Net Debt
-1.09B	-1.61B	-2.17B	-1.88B	-1.49B
	Total Liabilities
1.77B	1.97B	1.84B	2.07B	1.93B
	Stockholders Equity
12.11B	12.20B	11.98B	11.54B	10.90B
Cash Flow		Free Cash Flow
-216.00M	-170.00M	325.00M	995.00M	566.00M
	Operating Cash Flow
333.00M	615.00M	724.00M	1.30B	819.00M
	Investing Cash Flow
-470.00M	-768.00M	-114.00M	-727.00M	-126.00M
	Financing Cash Flow
-410.00M	-327.00M	-300.00M	-234.00M	-251.00M

The Swatch Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWGAF		$8.76B	39.91	1.57%	3.05%	―	―
CFR	65 Neutral	CHF88.71B	33.95		1.81%	-2.34%	-51.68%
Sector *	62 Neutral	$6.88B	11.32	2.95%	3.87%	2.70%	-24.57%

* Consumer Cyclical Sector Average

Performance Comparison

SWGAF

The Swatch Group

169.22

-25.44

-13.07%

CH:CFR

Compagnie Financiere Richemont SA

151.55

6.46

4.45%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

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