Positive development in the first nine months 1998

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Biel / Bienne (Switzerland), October 21, 1998 - In its today’s meeting, the Board of Directors of the Swatch Group elected Mr. Peter Gross Vice-Chairman. Moreover, the Board has taken note of the positive development of the Swatch Group’s activities during the first nine months of 1998.

In spite of the Asian crisis and continuous turmoil at the financial and stock exchange markets, gross sales have grown by 8.2% in local currency and by 6% in Swiss francs by the end of September 1998. The sales growth in units of watches, movements and stepping motors for the same period amounts to +8.3%. In comparison to the remaining watch industry in Switzerland and abroad, the Swatch Group shows a higher growth, enabling the Group once more to win market shares.

According to the latest forecasts, the Group expects good Christmas sales, the most important period of the year, and accordingly higher operational results.

Regarding the share buy-back program, the company has now bought back 5.78% of the initial share-capital. Besides these shares, the Group holds own shares for the management stock option program as well as free shares, which legally require the temporary suspension of the share buy-back program. With a view to legal regulations and the successful achievement of the first part of the objectives, the Board of directors has therefore decided to suspend the share buy-back program. The capital reduction and change of the articles of corporation due to the shares repurchased through the second trading line at the stock exchange, will be of the competence of the next General Assembly.

The flexible and transparent instrument of the second trading line established for the share buy-back program will permit to decide anytime on a continuation of the buy-back program while respecting the legal regulations in this respect.

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Positive development in the first nine months 1998