Swatch Group first half results and prospects for the year 2003

After a sales growth of + 7% in the first quarter, neutralized however by the US dollar and other currencies influences, Swatch saw its operating result for the first quarter slightly higher than in the same period for the previous year. Yet with the effects of war in the middle-east, the SARS disease, lesser consumer spending and decline in travel the second quarter was marked by a heavy decline, representing an excelptional decline in sales of 128 million Swiss Francs (- 6.6% compared to the same period last year).

Swatch stresses that these adverse factors could not be planned and therefore be compensated by cost-cutting measures. In addition, the Group did not wish to cut costs either in the marketing area or in research and development. The Swatch Group states that even though the exchange losses were great, local prices did practically not increase and the rise amounted only to 2% of the sales. Swatch even gained addition market share.

However, in comparison with the same period last year, the operating result declined to - 17.3 % to Swiss Francs 224 million. Net income for the Group was down - 9.7% at Swiss Francs 186 million.

Prospects

The Groups takes an optimistic view of the second half of 2003. It assumes that the exchange rates will remain within the same range and that negative currency influence, for a total of 102 million Swiss Francs as observed during the first half, will level off further in the second half. Continuous efforts on the cost side will also be made. Therefore the Swatch Group's long term expansion plans are not called into question.

www.swatchgroup.com
Contact: [email protected]
(please credit Europa Star)

From the Swatch Group Press Release
September 2003