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Press Release

Swatch Group: Gross sales in 2007 just under CHF 6 billion
Strong Group result expected
Outlook optimistic

Biel/Bienne, January 18, 2008

Gross sales in 2007 up 17.6% to a record CHF 5 941 million Strong growth in all Group divisions, notably in the Watches & Jewelry as well as Production segments
Marginally favorable currency effect of 0.3% in 2007
Above-average increase in operating result and net income expected
Ongoing optimistic outlook for 2008, double-digit growth in January expected, strong trend continues

Group Overview

Last year saw record sales in all Group segments, with the finished watch segment as well as the Production segment once again reporting the strongest growth.
Electronic Systems also posted a substantial rise in sales thanks to good performance in the second half of the year.
Foreign currencies had a marginally favorable impact on Group sales of 0.3%, largely due to the strong and stable development of the euro.

EXPECTED EARNINGS FOR 2007 AND INITIAL OUTLOOK FOR 2008

Given the strong rise in sales across all segments, the Group expects to report an above-average increase in operating profit and net income for 2007.
The difficult currency environment in the second half of the year, the continuing rise in the price of gold, platinum, diamonds and precious stones, as well as higher prices for almost all other raw materials, put a squeeze on margins. However, thanks to a combination of production and logistics improvements, cost reductions, and selective price increases, it was possible to partially offset these effects. The full positive impact of the improvements will become noticeable during the course of the current year.
Further investments aimed at reducing bottlenecks, above all in watch components, have been made, with more planned for the future.
The Group anticipates further growth in all areas for 2008. Despite the current wave of turbulence in the financial markets, the Board of Directors and the Executive Group Management Board expect the positive trend to continue, with the Group's geographical presence in all key growth markets coupled with its broad positioning in all market segments proving to be key advantages. The increasing importance of the Group's industrial base will also help to sustain the positive trend. The very positive sell-in and sell-out figures, evident also in Group-owned stores, which have already been posted in January 2008 point to double-digit growth for the month. Orders at hand for the coming months also give reason to expect strong growth in the first half of the year.


Contacts: Swatch Group Media:
Béatrice Howald, Spokesperson
Tel. +41 32 343 68 33
fax +41 32 343 69 22
E-mail: press@swatchgroup.com

Swatch Group Investors:
Edgar Geiser, CFO Thomas Du"rr, Corporate Treasurer
Tel. +41 32 343 68 11
fax +41 32 343 69 16
E-mail: investor.relations@swatchgroup.com

 

 

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