Swatch boss slams ‘disaster’ SNB move

The boss of Swiss watchmaker Swatch slammed the country's national bank move to end the Swiss franc's peg to the euro as a "disaster", adding that it was run by "scared" bureaucrats.

The Swiss franc appreciated around 30 percent against the euro immediately after the Swiss National Bank's (SNB) shock announcement last month that it was scrapping its three-year-old peg of 1.20 Swiss francs per euro.

"They (SNB) took an isolated decision very cold like bureaucrats and they communicated it the worst way and sent shockwaves to everybody," Nick Hayek Jr, CEO of Swatch Group, told CNBC in a TV interview.

"They have credibility, but they have now credibility as a bureaucratic organization that is very quickly scared to act so they want to react now."

'Not preoccupied'

Swatch, which has entry-level Tissot to luxury Breguet watches in its product range, reported a 26.6 percent drop in net profits in 2014 from 1.92 billion Swiss francs ($2.06 billion) in 2013 to 1.41 billion Swiss francs, driven mainly by increased marketing spend around the Sochi Winter Olympics and investment in new retail locations.

The impact of the SNB's move on Swatch's earnings will not be evident until it reports the next quarter's earnings, but Hayek said he was not worried about the effect on the company.

"On the other hand for Swatch group and the Swiss watch industry I'm not preoccupied at all because our main business is out there, outside of Europe," he said.

Read MoreEnding the Swiss peg: What it really means

Swatch is still banking on "high single-digit growth in local currency despite the highly overvalued Swiss franc", according to its earnings report. The Swiss franc's rise against the euro erodes the value of sales in the euro zone, while strengthening against the dollar would hit sales in the U.S.

ianluca Colla | Bloomberg | Getty Images

The high level of the currency in 2014 hit Swatch's revenue by 138 million Swiss franc's during the course of 2014.

Price rises?

To offset the Swiss franc's move, some of Swatch's brands are increasing prices between five and 7 percent, but Hayek said the company could have less revenue ahead because of the "defensive" rise in price. He said Swatch is focusing on volumes.

The situation with the Swiss franc is a major headwind for Swatch but the company could counter this through raising prices further, product innovation and a hedging strategy to improve performance outside of Europe, according to Mario Ortelli, senior luxury analyst at Sanford C. Bernstein, told CNBC by phone.

But hiking prices won't be so easy for Swatch which has a range of low-end to luxury watches. Most price increases are likely to come in the high-end segment.