Swatch Posts
Record Results for 2006;
Outlook Bright for '07

Everything is for the better in the best of worlds for the Swatch Group, which has posted record results for 2006 and announced a "very promising" 2007.
In 2006, the Swatch Group, one of the world's leading watch companies, saw its net profit increase by 33.7 percent to 830 million francs and its operating profit rise to 973 million, compared to 735 million in 2005 (+32.4 percent). Meanwhile turnover in 2006 exceeded the five billion franc mark for the first time with a total of 5,050 million (+12.3 percent).
By sector of activities, operating profit increased by 17.9 percent in watches and jewellery, to 738 million francs, by 212.8 percent in the production of movements and components, to 147 million, and by 32.5 percent in electronic systems, to 106 million.
In the light of these exceptional results, the board of directors of the Swatch Group decided when it met on 14 March to submit to the General Meeting of 11 May this year an increase in the dividend of 40 percent, to 3.50 francs per bearer share, compared to 2.50 francs last year, and 0.70 franc per registered share, compared to 0.50 franc in 2005. At the meeting it will also propose to shareholders the cancellation of shares bought during the last share buyback programme totaling 300 million completed on 23 November 2006. The board of directors has also decided to embark shortly on a new 400 million share buyback programme through the secondary market.
With these two measures, the Swatch Group shows once again its willingness to return to shareholders liquid assets not required for operation. It also demonstrates its commitment to optimizing the group's consolidated balance sheet. In this respect, mention should be made of the return on equity, which has been increased to 17.3 percent (14.0 percent in 2005) for an equity ratio of 71.9 percent on 31 December 2006 (69.9 percent on 31 December 2005).
In the 2007 financial year, the first two months show a strong upward trend in line with that of 2006, particularly in the watch, jewellery and production sectors (the more volatile electronic systems segment at present shows a slightly more modest rate of growth). So much so that the group already envisages another very promising financial report and has announced "dazzling prospects" for the current year.