Swatch 2010 Sales Reach Record, Strong Start Into 2011

Swatch Group AG (UHRN.VX) Wednesday said that its 2010 full year sales topped 6 billion francs, or about $6.2 billion, for the first time in its history, adding it is confident for 2011.

MAIN FACTS:

--Record year for the Swatch Group with Group sales of CHF 6.4 billion, an increase at constant exchange rates of 21.8% over 2009 and 12.7% over the previous record year 2008, despite capacity bottlenecks and adverse exchange rates

--The extraordinary strength of our brand portfolio was again reflected in an excellent performance by the watch segment in practically all markets and price segments, with an increase at constant exchange rates of 28.1%.

--Marked upturn in the Production segment, especially in the second half of the year, with a year-on-year increase in sales of +7.5%.

--Positive trend in the Electronic Systems segment with sales up by +11.7% on 2009.

--Improved operating margin compared to previous year as well as higher net income expected, despite an unfavourable currency constellation at year-end.

--After a strong month of December with 21% growth at constant rates in the segment Watches & Jewelry, there are already indications in January 2011 of continued double-digit growth. Outlook remains optimistic in the entire year 2011 for further strong organic sales growth.

--Negative foreign currency development, mainly in the Euro and US Dollar, impacted sales by CHF164 million or 3% versus 2009

--The Group expects an improved operating margin and a higher net profit for the financial year 2010 compared with the previous year. This improvement will be visible in all areas of the Group. The record figures expected in absolute terms will be attenuated by the extremely strong Swiss Franc.

--The outlook for 2011 remains positive, despite a negative foreign currency development, particularly in the US Dollar and the Euro, against the Swiss Franc.

--The Swatch Group will further generate dynamic and organic sales growth in 2011 and continue investment in its distribution and the expansion of its production capacities. The latter applies to both standard products as well as new products which were launched in the markets very successfully at the year-end of 2010, such as the New Gent from Swatch, the Ladymatic from Omega and the world exclusive "Type XXII 10 Hz" chronograph from Breguet. Other product launches are planned for spring 2011.

--Sales in January 2011 are already exhibiting a positive trend with double-digit growth in local currencies. The optimistic expectations are supported by the Group's strategic positioning in all market segments and its geographic presence throughout the world.

-Zurich Bureau, Dow Jones Newswires, [phone]; [e-mail]