Is Virat Kohli an overrated cricketer




2 THE EARTH, THE SUN, ONE YEAR It takes the earth around 365.25 days to orbit the sun in its elliptical orbit. We round off this number and get back the lost time with an extra day every four years. A day consists of 24 hours, which we often count in 2-by-12-hour segments. In the 8,760 hours of last year, the Swatch Group has experienced and created something important. This is their story.

3 1 TABLE OF CONTENTS MESSAGE FROM THE PRESIDENT OF OPERATIONAL ORGANIZATION ORGANIZATION AND MARKETING IN THE WORLD BODIES OF THE SWATCH GROUP BOARD OF EXECUTIVE COMMITTEE EXTENDED GROUP MANAGEMENT DEVELOPMENT OF THE SWATCH GROUP ART & PHILANTHROPY BIG BRANDS WATCHES AND JEWELRY DISTRIBUTION AND PRESENCE PRODUCTION ELECTRONIC SYSTEMS CORPORATE, BELENOS SWATCH GROUP IN THE WORLD GOVERNANCE ENVIRONMENTAL POLICY SOCIAL POLICY CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS 2017 CONSOLIDATED FINANCIAL STATEMENTS ANNUAL FINANCIAL STATEMENTS THE SWATCH GROUP AG COMPENSATION REPORT THE Pleiades The Pleiades are an open cluster of stars in the constellation of Taurus. They belong to the Milky Way and can be seen with the naked eye from Earth. Her name not only connects her with the nymphs of Greek mythology, but also with a French group of poets from the 16th century. Whether in the sky or in a book: The Pleiades have real charisma. The Swatch Group's annual report and remuneration report are published in French, German and English. The text on pages 1 to 151 was originally written in French and that on pages 152 to 230 and the remuneration report in German. These respective language versions are decisive. The Swatch Group AG, 2018 TABLE OF CONTENTS

4 2 FOREWORD FROM THE PRESIDENT Dear Sir or Madam, dear fellow shareholders The black hole beginning or end !! Stars, galaxies, universes. Astronomy: first time measurement in the world and linked to so many other sciences! Who has never watched the starry sky on a clear summer night and let their dreams run wild? Who has never wished for something dearly while catching a shooting star? Let's be honest: a little irrationality every now and then can't hurt. But only if we do not forget that above all you shape your own fate yourself and that happiness does not fall from the sky. You can find a small sideways glance at this universe in our 2017 Annual Report! Just like the special Swatch, which was again made just for you and today with the special zodiac combination of the Swiss cow on the Milky Way! But seriously: in all of Western philosophy, everything revolves around the question of fate. Is the fate determined in advance or not? Is man free or not? The philosophers fill very extensive and highly demanding books on this topic and come to the conclusion either that we are free and our fate is in our own hands or that we are completely unfree and everything is already predetermined. Some even combine both approaches. But now to the fate of the Swatch Group in 2017: There were various elements, such as, of course, work and the joy of success. Work is what the people working in our company do every day, from the members of the board of directors, the group management, the engineers, the sales staff, the IT specialists, the marketing and PR teams, the finance and controlling specialists to all employees working in the production of the various companies and many more. I couldn't list them all, they are so numerous: Overall, people give their best every day to keep the Swatch Group on the road to success. Joy is what our teams feel when, for example, they create a new product. Think of the beauty of a Harry Winston piece of jewelry and the profound satisfaction felt by those who design, draw, and finally realize it. Think of the watchmakers at Breguet who develop a masterpiece like the Marine Equation Marchante 5887, the teams at Swatch who bring the new SKIN model to market, the Omega employees who celebrate the 60th anniversary of the legendary Celebrating Speedmasters, or to those from Blancpain who are committed to protecting millions of square kilometers of underwater world, but also to all the teams who give everything for our brands in various regions around the world. It's all work and joy! Still, we shouldn't forget the words, keep the imagination we had when we were six. Even if work and enjoyment are decisive factors for our success. Who, if not the movement of our planet around our nearest star, the sun, determines the time that we measure with our products? Products that were acquired on the one hand for their beauty, on the other hand for their precision, but not infrequently simply out of the obsession "merely" to measure the time it takes for the earth to turn around itself and the sun . Movements with a perpetual calendar, equation of time, tourbillon or co-axial escapement: they all embody the bold attempt to imitate the movements of the earth in tiny mechanical, reliable movements. Several of our brands have a particular preference for the moon phase, but Blancpain is the undisputed master. Isn't the moon phase a poetic means of always having with you this romantic, mystical face of the earth's satellite, which is supposed to play a major unknown role in our lives? The moon exudes a very special shine at Omega, whose watches adorned the wrist of the privileged twelve people who were allowed to walk on its surface. One of the most famous collections from Omega pays homage to these constellations of the sky, which seem to have influenced our future since we were born. For me there is not only work, joy, success and the numbers, but also the pride that as President of the Board of Directors of the Swatch Group I can report on a successful 2017 and look forward to 2018. As you can see, I've retained a lot of the fantasy of a six-year-old and I'm still looking in the sky for shooting stars for my wishes! Yes, head in the stars, but with both feet firmly on the ground! Let me now explain the 2017 results a little. In the analysis of the year 2017 I would like to emphasize something in particular: Not only our annual turnover in the area of ​​watches and jewelry without production grew by 6.9% at the current exchange rates. The operating margin in this area also increased by 27.4%. FOREWORD FROM THE PRESIDENT

5 3 I find the fact even more interesting that this growth experienced an increase of 12.2% in the second half of the year and an increase of 14.9% in the fourth quarter. The marked acceleration was clearly confirmed in December with the second-best monthly turnover in the history of the Swatch Group. This positive development has certainly been written in the stars for a long time ... Compared to the previous year, our company's sales rose by 5.4% to 7,960 million Swiss francs in 2017, despite the negative effects of the current exchange rates. The overall operating result improved by 24.5% to 1,002 million Swiss francs. The operating margin grew from 10.7% in the previous year to 12.6%. Group profit rose by 27.3% to 755 million Swiss francs, with a net margin of 9.5%, which is a significant improvement on the previous year (7.9%). Taking these positive results into account, the Board of Directors of the Swatch Group proposes the distribution of a dividend of CHF 7.50 per bearer share and CHF 1.50 per registered share, which means a return to the level of the extremely successful 2015. Dear Sir or Madam, dear fellow shareholders, all of you are writing the fate of our company by not leaving it to the stars alone, by confronting threatening eclipses, by remaining optimistic about puzzling black holes that devour everything threaten, but luckily they are very far away. You are all the living soul of our company. I want to thank you all from the bottom of my heart. My thanks also go to the Board of Directors, the Group Management and the extended Group Management, as well as all colleagues for their tireless efforts over the past year. Thanks to all of you. Yours Nayla Hayek President of the Board of Directors of the Swatch Group TIME AND SPACE Time that flies by: In 1996, the Swiss astronaut Claude Nicollier took this watch into space, proving that there are no limits for Swatch. The same could be said of the Roman god Mercury. This "messenger of the gods" with the winged helmet not only brought news, but was also the god of the merchants. One could even imagine him as the patron saint of annual reports. FOREWORD FROM THE PRESIDENT


7 5 SWATCH GROUP ORGANIZATION AND SALES IN THE WORLD as of December 31, 2017 SUBSIDIARIES OF THE SWATCH GROUP EUROPE AMERICA OCEANIA FAR EAST MIDDLE EAST AFRICA Belgium Denmark Germany Finland France Greece Great Britain and Ireland Italy Luxembourg Netherlands Norway Austria Poland Russia Sweden Switzerland Spain Turkey Brazil Canada Mexico United States, Caribbean and Latin America Australia China Hong Kong India Indonesia Japan Macau Malaysia Singapore South Korea Taiwan Thailand United Arab Emirates South Africa In those countries in which the Swatch Group does not have a sales subsidiary, it is represented by distribution companies. IS OUR FATE REALLY IN THE STARS? Is all of these heavenly bodies predetermined? Or is our fate guided by the mythical or other animals of the Chinese horoscope? If so, then all of the signs for the Swatch Group must have been ideal in 2017. To tell the truth, we believe that our brands and employees are the real stars and starlets, and that we hold our fate in our own hands. ORGANIZATION AND DISTRIBUTION IN THE WORLD

8 6 SWATCH GROUP BOARD OF DIRECTORS as of March 1, 2018 Schütze NAYLA HAYEK President of the Board of Directors Fish Secretary Jennifer Meyer-Kluge Auditors PricewaterhouseCoopers St.-Jakob-Strasse 25 CH Basel Administrative headquarters Seevorstadt 6 CH-2501 Biel Telephone: Fax: Internet: Company headquarters Faubourg de l Hôpital 3 CH-2000 Neuchâtel BODIES OF THE SWATCH GROUP

9 7 Leo Virgo Libra ERNST TANNER Vice President DANIELA AESCHLIMANN Virgo Taurus NICK HAYEK PROF. DR. H.C. CLAUDE NICOLLIER DR. JEAN-PIERRE ROTH The functions and areas of responsibility of the members of the Board of Directors as of December 31, 2017 are described in the Corporate Governance chapter on pages 155 and 156 of this annual report. BODIES OF THE SWATCH GROUP


11 9 SWATCH GROUP EXTENDED GROUP MANAGEMENT as of March 1, 2018 Gemini Virgo Scorpio Cancer RAYNALD AESCHLIMANN MATTHIAS BRESCHAN JEAN-CLAUDE EGGEN YANN GAMARD Pisces Virgo Twins Sagittarius HANS RUDOLF GOTTIER WALTER VON KÄNEL STEEL THOMAS MEIGIER DROGERO PETERO POLISH Functions Areas of responsibility of the members of Group Management and Extended Group Management as of December 31, 2017 are described in the Corporate Governance chapter on pages 158 to 160 of this Annual Report. BODIES OF THE SWATCH GROUP

12 10 DEVELOPMENT OF THE SWATCH GROUP Swatch Group consolidates net sales in CHF million Change compared to previous year% Operating result in CHF million In% of net sales% Group profit in CHF million In% of net sales% Change on previous year% Cash flow from operating activities in CHF million In% of net sales% Equity in CHF million In % of balance sheet total% balance sheet total CHF million Headcount per employee Average headcount Employees Personnel expenses CHF million The Swatch Group AG Income from dividends CHF million Annual profit CHF million Shareholdings CHF million Share capital CHF million Equity as% of total assets% Balance sheet total CHF million Dividend 1) CHF million 417 2) In% of share capital%) No dividend distribution on own shares held by the group. 2) Proposal by the Board of Directors to the General Meeting. DEVELOPMENT OF THE SWATCH GROUP

13 11 ART & PHILANTHROPY THE MOON We love this place. It's romantic and mysterious. It influences our sleep and supposedly also our moods. We know its attraction all too well: Omega visited regularly from 1969 to 1972. And some of our brands make watches that follow its cycle. ART & PHILANTHROPY

14 12 ART & PHILANTHROPY SWATCH GROUP Swatch Group is dedicated to its social responsibility with passion and full commitment. The company, like its brands, is committed to a wide variety of causes around the world. It prefers concrete actions instead of mere words. Breguet Last year, like Blancpain and Jaquet Droz, Breguet again took part in the Only Watch charity event, which has become an integral part of the watchmaking scene. The manufactory remained loyal to the Monegasque Association against Muscular Dystrophies, which it has supported since 2005: In 2017 it dedicated a Classique in yellow gold with a linear perpetual calendar to it. This special model is unique. From September 27th to 30th it was exhibited at the Monaco Yacht Show and then went on a world tour. The auction, which marks the end of all Only-Watch projects, took place on Saturday, November 11, 2017, for the second time in a row in Geneva. Harry Winston Throughout the year, Harry Winston was involved in philanthropic causes as part of her Harry Winston Brilliant Futures charity program. In the United States, Harry Winston worked for local organizations near the company's salons, including the Harlem Academy non-profit private school, the Americares and Voices For Children foundations, and the Mattel Children's Hospital UCLA and CHOC Children's Hospital. In Japan, the brand's partnership with Chance for Children entered its fourth year. 2017 is the third year worldwide in which Harry Winston is working with the amfar Foundation, which is committed to AIDS research. Thanks to the support of Harry Winston, the Americares Foundation was able to provide indispensable assistance after the two devastating hurricanes that devastated Texas and Florida. The aid and development organization Americares supports people affected by poverty or a disaster with life-sustaining and change-oriented health programs as well as medical treatment and equipment. In Texas and Florida, Americares addressed the most urgent medical needs: the foundation provided medical equipment to survivors and restored health care to those most in need. Blancpain As part of its Blancpain Ocean Commitment program, the Manufacture continued its many ocean research and conservation initiatives. The brand's efforts have already yielded visible results: it has doubled the area of ​​the marine area placed under protection. Blancpain helped create a marine reserve measuring almost five million square kilometers in a total global area of ​​around ten million square kilometers to date. In line with the Gombessa expedition, Blancpain proudly confirmed its support for a fourth major research project that Laurent Ballesta and his team are carrying out in French Polynesia. Glashütte Original On the occasion of its seventh year of cooperation with the International Film Festival in Berlin, the watch manufacturer Glashütte Original confirmed its commitment and presented itself as the main sponsor for the first time. It also awarded the Glashütte Original Documentary Film Prize for the first time. The award went to the film Istiyad Ashbah (Ghost Hunting). ART & PHILANTHROPY


16 14 Jaquet Droz Jaquet Droz is particularly committed to promoting and preserving the watchmaking legacy of the Neuchâtel region. The ongoing project to restore the pendulum clock with songbird by Pierre Jaquet-Droz brought new insights into its origin and history. With the restoration, the songbird clock will largely be returned to its original condition. Just like the contemporary creations, this marvel of mechanical precision and ornamental art shows the spirit that animates the work of the men and women at Jaquet Droz: the love of beautiful gestures that enchants time. The restoration project will be completed in 2018 for the brand's 280th birthday. Omega In October, on the occasion of World Sight Day, Omega was able to present its new watch in the collection to support its partner Orbis International: the Omega Speedmaster 38 mm "Orbis", specially created for the occasion. Since 2011, Omega and Orbis International have been working together to provide high quality ophthalmic care in some of the world's most remote regions. Orbis International launched a health program in over 90 countries on board their flying hospital volant (Flying Eye Hospital).In addition to performing millions of eye treatments and medical procedures, the organization is also dedicated to training new professionals in ophthalmology. As part of its partnership with Orbis International, Omega is giving all of the organization's young patients a cuddly toy bear. This comforting gift served as inspiration for the bear motif stamped into the underside of the Speedmaster 38 mm "Orbis" as well as for the unique shape of the counterweight of the blue central seconds hand. To further support this noble cause, Omega is committed to donating part of the proceeds from the sale of this watch to Orbis International. By purchasing this watch, customers can help the organization change the lives of people all over the world. Longines Longines has a long tradition of supporting charitable causes. The brand's core values ​​of excellence and elegance have always led them to pursue and promote the highest social ideals. For this reason, Longines supports numerous charity projects through the various partnerships it has established over the years. The winged hourglass brand is proud and honored to partner with Longines Ambassadors of Elegance nonprofits such as the Kate Winslet-founded Golden Hat Foundation, the Andre Agassi Foundation for Education and Stefanie's Children for Tomorrow Foundation Count. Longines has also been represented in the world of sport for a long time and is involved with its partners in solidarity projects for the benefit of numerous organizations such as Sur les Bancs de l Ecole, Just World International and The Injured Jockey Fund. In 2017, Longines organized, among other things, a media visit to a new school opened by Andre Agassi. In collaboration with Kate Winslet, she also launched a special model, the proceeds of which will go to her foundation. Rado The Vaudois start-up SteriLux won the Rado Star Prize Switzerland for Young Talents in November. The company, which specializes in medical technology, markets a new sterilization process. This can be used and affordable even under difficult conditions such as a power failure or contaminated water. UV radiation and ozone are used for sterilization. The system, which combines new technologies and design, is an innovation with global potential. Scientists and designers worked hand in hand to develop it from the start. The jury was also impressed by the simplicity and practicality of the design. Certina Certina began a new collaboration with Florida-based Sea Turtle Conservancy and their Tour de Turtles migration project. The organization's conservation, awareness and education programs in the US and abroad, as well as its environmental goals, are a perfect fit with Certina's long-cherished values ​​and its turtle logo. This image has adorned numerous Certina watch cases since the 1960s and is a testament to the precision and durability of the brand's famous DS concept launched in 1959. As part of its commitment, Certina took part in the Tour de Turtles initiated by the organization. Over a dozen turtles migrated over a period of three months. ART & PHILANTHROPY



19 17 Mido Mido has been committed to helping children in need since 2008. This year the brand donated a library to a primary school in the Chinese city of Zhangjiajie, to the delight of the young students. Mido also deepened its partnership with the International Association of Architects (UIA) and participated in the creation of the new UNESCO-UIA & MIDO award for responsible architecture. The award is open to architecture students and promotes humanistic and ecological projects. The first prize went to two students, Heba El Sawy from Egypt and Alba Alsina Maqueda from Spain. The award ceremony took place on September 6th on the occasion of the 26th triennial UIA congress in Seoul. Hamilton This year's Hamilton Behind the Camera Awards, honoring outstanding work behind the scenes, took place in Shanghai in November. It is thanks to the talent and tireless commitment of the numerous people who never stand in front of the camera that the wonderful costumes, enchanting decorations, indispensable accessories and superbly guided cameras are made. They all make a significant contribution to the success of a film production. Hamilton prides itself on recognizing and recognizing these silent heroes' talent and personal contribution to the film industry. Famous Chinese actors and actresses such as Qianyuan Wang, Xuan Huang, Haoran Liu, William Feng and Shanshan Yuan attended the ceremony at Theater Above. Swatch Swatch continued to support artistic creation in various forms, notably with its artist residency in Shanghai, the famous Swatch Art Peace Hotel. This talent factory continued its partnership with the Power Station of Art, the official local institution for contemporary art. The Swatch watches, often referred to as “canvas on the wrist”, were presented in the museum at the end of the year. And not in any museum. With the exhibition Items: Is Fashion Modern? the New York Museum of Modern Art explored the past, present and future of 111 fashion items that have profoundly shaped the world over the past century. From October 1, 2017 to January 28, 2018, the exhibition featured ballerinas, an engagement ring, a sweatshirt, several “little blacks” and five watches created by Swatch, three of which were collaborations with artists. ART & PHILANTHROPY


21 19 BIG BRANDS WATCHES AND JEWELRY DISTRIBUTION AND PRESENCE IN A GALAXY NOT VERY FAR THROUGH Our “Big Brands” are not only home to talented men and women who know how to master the dimensions of space and time with the utmost precision. They also form the heart of the Swatch Group galaxy. WATCHES AND JEWELRY

22 20 * March 1, 1983 Pisces I LOVE MY SWATCH TRENDS The fashion and accessories sector is currently moving in a highly dynamic environment in which new talents are emerging on the horizon and fundamentally changing the way fashion is categorized and perceived. There's the vintage movement with its playful nostalgic predilection for the extroverted looks of the eighties. There is a feeling of freedom and creativity that allows everyone to live their own style and ensures positive energy and a colorful atmosphere. And there is the opposite pole, the longing for classic elements, for proportions that promise reliability and stylish elegance. The nice thing about our time is that these and many other trends can exist on an equal footing, that they inspire us to experiment and to break new ground, and that they help create a playful, vital and exciting diversity. In its role as an “established provocateur”, Swatch picks up on this mood and will continue to offer a wide range of different styles in its stores and via the Internet in the future, with which the brand can meet the needs and wishes of its customers around the world. Another important and very clear phenomenon is the increasing importance of art as a commercial means of expression. Swatch recognized this years ago when hardly anyone else thought it possible and implemented it in a unique and unprecedented way. As a brand, Swatch lives with art, it regards art as a source of inspiration, it supports and promotes art projects and sells art that can be worn on the wrist. FAST FORWARD Whether the endless expanses of space or the limitless possibilities of the Internet: Sometimes it pays to be ahead of your time. In 1998, Swatch launched the Internet time Swatch Beat under Nicolas G. Hayek and sent the Beatnik satellite into space a year later. No question about it: The Swatch Group has helped shape the future. CREATION The spring / summer and autumn / winter collections also implemented the many forms of expression of modern culture and fashion in 2017. Nevertheless, the year was mainly dominated by SKIN. With its typically positively provocative attitude, Swatch launched a reinterpretation of the legendary Swatch SKIN and thus secured worldwide success: the models in two sizes are aimed at a more classically oriented and extroverted audience. Thanks to a double injection molding production process, a new and style-defining design language could be developed, while new construction details open up additional possibilities for the future design and further development of the product. The excellently coordinated marketing campaign used various channels from social media to art to traditional advertising measures and a convincing PR concept. The expansion of the Swatch SISTEM51 Irony collection to include new models with a skeletonized dial strengthened the positioning of this product as a real model for enthusiasts. A limited edition was created from a cooperation with the well-known watch website Hodinkee, which was successfully presented in New York. As the main partner of the Arte 2017 Venice Biennale, Swatch entered into an impressive collaboration with the British artist Ian Davenport: The result was the 14-meter-long color gradient installation Giardini Colourfall in the middle of the Giardini (very Swatch-typical and extremely colorful) and a limited edition Swatch Art Special that sold out in less than three weeks. Swatch lived up to its reputation as a thoroughly international brand again in 2017: collectors and travelers were enthusiastic about the new designs from the Destination Swatch collection, and the cheerful and harmonious Thammada pattern of the Swatch Art Special by Paola Navone was featured at the Milan furniture fair Walls, furniture and wrists. PRESTIGE AND LUXURY SEGMENT / UPPER PRICE SEGMENT / MEDIUM PRICE SEGMENT / BASE SEGMENT



25 23 PRESENCE RETAIL AND SALES The strategic store openings in Venice and in the Swiss Bürgenstock Resort (LU) as well as the renovation measures in the Nicolas G. Hayek Center in Ginza (Tokyo), Japan and in Wangfujing ( China) were carried out. As part of an impressive road show, the SISTEM51 Irony and various original models traveled through China and stopped at 15 stations. The launch of the new SKIN in March exceeded all expectations; the models turned out to be absolute bestsellers. With the second generation of SWATCH PAY! For contactless payment, the brand continued its innovation course with four new models that were available in all Chinese boutiques. Swatch's almost proverbial creativity was shown in collections such as A Traveler's Dream and Countryside with the bestsellers Ora d Aria and Merry Berry, as well as in the winter collection A Gala Night. It wasn't until June that the most provocative secret of the year was revealed with the Swatch X You, the model achieved excellent sales and was an absolute customer favorite. EXPANSION OF ONLINE TRADE IN 2017 The online sales figures continued to rise in 2017. In addition to an intensification of the online presence and a foray into China, Singapore and Russia, direct sales through sales partners in Portugal and Saudi Arabia were also expanded. Swatch also strengthened its direct sales with the help of important Internet marketplaces such as Tmall (China) and Rakuten (Japan) as well as exclusive online retailers such as Zalando, thereby opening up considerable upside potential. One of the most important goals for 2018 is the merging of the various online and offline channels and the associated approach to an omnichannel business model. Corresponding strategic initiatives have been initiated. This includes, for example, the offer to reserve watches online and buy them in a store in order to increase the number of visitors there. The physical and digital worlds merge when customers come to Swatch stores thanks to their digital devices. In Milan, customers can request a watch purchased online within four hours; however, buyers can also pick up the watch from the boutique on occasion. In some cities, the brand installed its digital configurator for the Swatch X You to draw customers' attention to the new collection of Swatch watches, the models of which can be individually designed. Measures like these serve as a transition to a limitless new shopping experience called omnichannel. AROUND THE WORLD Over three hundred important media representatives and opinion leaders attended the international launch of the key Swatch Collection of the Year SKIN in March 2017. Subsequently, various advertising activities and varied communication campaigns in an increasingly wide range of online and offline channels ensured that the SKIN and Swatch X You collections were brought closer to customers in all markets. With the opening and redesign of boutiques as well as the cooperation with new retail partners, Swatch strengthened its sales worldwide. SWATCH & ART Biennale Arte 2017 For the fourth time in a row, Swatch was the main partner of the Venice Art Biennale in the reporting year. In their pavilion in the Arsenale, Swatch presented the work of four artists from the Swatch Art Peace Hotel who had taken the motif of the Swatch Faces. The Giardini, on the other hand, featured a monumental installation by the renowned British painter Ian Davenport. Festival del film Locarno As the official partner of the film festival in Locarno, Switzerland, Swatch underscored its commitment with two important prizes: the Swatch First Feature Award, endowed with Swiss francs, and the priceless Swatch Art Peace Hotel Award, which allows the award-winning filmmaker to stay at Swatch Art Peace Hotel includes. The official limited edition Swatch Pardo sold out quickly while the festival was still celebrating its 70th anniversary. Swatch Art Peace Hotel In 2017, the brand once again welcomed artists from a wide variety of disciplines and countries of origin to their respected artist residency. The winners of the Emerging Curators Project 2017 were announced at a press conference in the hotel in July. Each of the three winners had the chance to curate an exhibition in Shanghai, with two exhibitions for the Power Station of Art and one for the Swatch Art Peace Hotel. In November, the former artist-in-residence Anita Gratzer presented her project Traces of the Visible to the public for the first time in the hotel's exhibition room. The works on display included around forty large-format analog photographs that she had taken in Japan and Shanghai. ADVERTISING SKIN 2017 was all about the new SKIN, which was advertised offline, online and on television with a massive 360-degree campaign. The campaign under the motto #YOURMOVE conveyed the aesthetics of movement, a feeling of freedom and a desire for change. #YOURMOVE is a story of transformation with which the SKIN collection is breaking new ground. Inspired by dreams, ideas and possibilities, the story tells of the decisive moments in life when emotions turn out to be fateful, open up new paths for us and lead us into unimagined spaces. Self-development is the incorruptible credo of SKIN the power to shape life full of self-confidence according to your own rules. WATCHES AND JEWELRY

26 24 #MySwatch Swatch used the new #MySwatch slogan as a comprehensive accompanying campaign for their spring / summer and autumn / winter collections and used emojis as a language with which they could universally reach both the millennial generation and the brand's other target groups. #MySwatch is to be understood as a call to action, as an encouragement to buyers to use the brand's collections and social media to express themselves, which particularly addressed Instagram and Snapchat users. The campaign featured models celebrating their uniqueness: a feeling of freedom and joy without the fear of being judged. SWATCH PAY! The coolest way to pay! A promotional video produced by Swatch that shows how the SWATCH PAY! the watch for contactless payment, was broadcast in China during the reporting year. Swatch X You With the motto Design your own, own your design, Swatch presented the Swatch X You, a watch that enables customers to create their own distinctive Swatch in five simple steps, either online or in a store. With prefabricated watch cases, bracelets, loops and accessories, it is very easy to design your own watch, either as a perfect gift or to let your friends participate in your own creation on social media via #swatchxme. The fun of individual design was conveyed in an original advertising campaign in which the watch parts were presented as in toy sets for children with individual parts that could be broken out. The concept illustrated the wide range of design options for the watch on the basis of four central themes: The surfer combines the creative process of creating the Swatch X You with the freedom of summer days. The artist regards design as a lifestyle: from spray cans to mustaches, the concept conveys the freedom that lies in one's own expression. For gamers, an old tube TV, a floppy disk and a video game controller are essential ideas for their individual Swatch X You. These three concepts use gender-independent visual elements.The fourth concept called K-POP was inspired by the famous female pop groups of South Korea and combines the freedom of choice (ice cream, lollipops) with the design of your own Swatch. Digital & Social Media The brand developed its opinion-forming strategy specifically for SKIN and Swatch X You. Over six hundred influencers around the world were active in Swatch campaigns using different strategic approaches: the focus on fashion for SKIN, the focus on creativity and art for Swatch X You. The digital marketing team integrated the brand even more intensively into a content strategy and created targeted content to meet the requirements of Swatch websites and retailers and online retailers. To optimize the visual appearance, lifestyle elements were linked to central campaign elements via various channels: from official online shops to and social media to various newsletters. Swatch also offered its fans an online lookbook for each season in which the latest lifestyle highlights were staged by models who wore Swatch products. At the end of the year, the campaign evaluation was used to identify options for improving the customer experience for future campaigns. Thanks to a special tool, the relevance of SoMe initiatives could be assessed and close relationships with local customers established. SWATCH CLUB & CRM Swatch's CRM strategy was aimed at building good customer relationships and increasing brand loyalty and brand value. In China, the new customer loyalty program and the new CRM system were introduced in six cities. The system uses WeChat, a CRM website, the points of sale and a marketing automation tool to provide a unique branding experience for customers. Based on the Chinese pilot project, nothing now stands in the way of a global launch of these measures. In the year under review, there were two Swatch Club events with Ed Banger and two events for Gold & Pioneer members: One in Geneva and the Holiday / Xmas, which was held for the first time in Moscow. The Swatch Club grew by 25 percent and now has members worldwide. SPORT Following an initial collaboration, Swatch announced its long-term partnership with The Drone Racing League, thereby supporting a new approach to the world of sport that blends physical and digital reality. As the title sponsor of the Swatch Beach Volleyball Major Series, the brand continued its commitment to the sport. Swatch Proteam athletes Clemens Doppler and Alex Horst won a silver medal at the FIVB Beach Volleyball World Championship in Vienna. The Swiss beach volleyball superstars Joana Heidrich and Anouk Vergé-Dépré formed a new team and quickly achieved extremely positive results, both in the competitions and for the brand. Swatch again hosted the Swatch Women's Pro Trestles surfing event in California in 2017. The Swatch Proteam is also happy to welcome two newcomers: surfer Tia Blanco and freestyle skier Nico Vuignier. PRESTIGE AND LUXURY SEGMENT / UPPER PRICE SEGMENT / MEDIUM PRICE SEGMENT / BASE SEGMENT


28 26 * 1848 Year of the Monkey REVIEW AND OUTLOOK TRENDS Omega celebrated its legendary legacy in the reporting year and at the same time paved the way for exciting future developments. With this successful mix of old and new, the brand once again demonstrated its tradition-conscious and at the same time very future-oriented orientation. Omega celebrated the 60th anniversary of the Speedmaster with George Clooney and Buzz Aldrin in London. Three new Speedmaster collections were launched at the event. The new models included, for example, the limited edition “Speedy Tuesday”, the Speedmaster Racing Master Chronometer and the Speedmaster 38 mm. With the opening of the Her Time exhibition in Paris, Omega commemorated its proud history of making elegant ladies' watches. Kaia and Presley Gerber, Cindy Crawford's children, were introduced as the brand's new ambassadors for the next generation of watch wearers. Further highlights were the continued support of the Emirates Team New Zealand, which won the 35th America s Cup in Bermuda, and the TILT team at the Red Bull Youth America s Cup. The brand also took on her new role as timekeeper at the Volvo Ocean Race. Omega will continue its legendary participation in the Olympic Games until at least 2032, the year in which the brand will celebrate its 100th anniversary as the official timekeeper of this major event. In addition, Omega opened its latest production facility at its headquarters in Biel (BE), thus creating a strong basis for the future of watchmaking. WITH "SPEED" INTO SPACE In a famous appeal, NASA was looking for a mechanical chronograph that could withstand a series of merciless tests. Only one watch mastered the challenge: the Omega Speedmaster. The chronograph has been involved in every manned NASA mission since March 1965, including all six moon landings. CREATION The Speedmaster “Speedy Tuesday” Limited Edition Omega ushered in the year with its very first online sales offer. The offer was limited exclusively to the Speedmaster “Speedy Tuesday” Limited Edition with a traditional design and was aimed at the worldwide online fan base of the Speedmaster. The distribution took place exclusively via Instagram. The total of 2012 pieces were sold out within 4 hours, 15 minutes and 43 seconds - an overwhelming success. The Speedmaster Racing Master Chronometer The design of this watch impresses, among other things, with the reintroduced striking racing-style minute ring, which graced a Speedmaster dial for the first time in 1968. The model with a high-quality master chronometer movement uses advanced materials such as ceramic, rubber and ceragold and pays homage to the Speedmaster's motorsport past. The Speedmaster 38 mm In 2017, the Speedmaster family was expanded to include a 38 mm collection. The models impress with their oval sub-dials and the distinctive two-part bezel, which often integrates a diamond ring and the famous tachymeter scale into their design. The collection retains the essence of the Speedmaster, but presents itself in a new and refreshing simplicity and elegance. Different colors such as the popular cappuccino offer a diverse selection. The Seamaster Aqua Terra The Aqua Terra collection was completely revised in 2017 and supplemented with additional models for women and men, including many Master Chronometers. The models equipped with conical crowns and simplified dials convince with symmetrical cases that blend perfectly into the bracelet. This is not only aesthetic, but also benefits wearers with narrow wrists. The pattern on the dial, reminiscent of wooden deck planks, now runs horizontally and no longer vertically, which gives the clocks a completely different look. PRESTIGE AND LUXURY SEGMENT / UPPER PRICE SEGMENT / MEDIUM PRICE SEGMENT / BASE SEGMENT



31 29 The 1957 “Trilogy” Limited Editions In 1957, Omega launched three professional timepieces that became absolute classics: the Seamaster 300, the Railmaster and the Speedmaster. For the 60th anniversary, Omega honored these three mechanical masterpieces with limited editions in 2017, which were available either individually or as a trio in a beautiful box. The Seamaster Planet Ocean “Big Blue” Inspired by the success of the Planet Ocean “Deep Black” in 2016, Omega presented the Big Blue in 2017 in the Planet Ocean colors of blue and orange. A stylish addition to the blue ceramic case and dial is a blue ceramic bezel, on which the first 15 minutes are highlighted with an orange rubber coating. The Seamaster “Edizione Venezia” Omega has a special connection to Venice: the brand's famous seahorse logo is inspired by the city's gondolas. To commemorate this event, Omega created the Seamaster “Edizione Venezia” in 2017. The special features of the edition include a domed, opalescent dial in silver color, the design of which is influenced by the vaulted ceilings of Venetian architecture. PRESENCE SPORT The America s Cup As the proud sponsor and official timekeeper of the Emirates Team New Zealand (ETNZ), Omega celebrated the team's victory at this year's America s Cup in Bermuda and equipped the crew with the Speedmaster X-33 regatta, which was specially designed for the ETNZ was created. In Bermuda, Omega also supported the TILT team, a group of young Swiss sailors who competed in the Red Bull Youth America s Cup. The Volvo Ocean Race The Volvo Ocean Race is the toughest and longest offshore regatta in the world, in which both the sailing skills and the human endurance of the participants are tested to the limit. During the year under review, Omega was part of this exciting event as the regatta's official timekeeper. From October 2017 to June 2018, Omega will take the time in all eleven stages and in-port races during the nautical mile long voyage across four oceans. The Olympic Games Omega's passion for the Olympics was evident in 2017. In May, the brand extended its contract as the official timekeeper until Omega celebrates its 100th anniversary as an Olympic timekeeper, the first time the brand performed this task in Los Angeles in 1932. Omega was also present in Seoul when the one-year countdown to the 2018 Winter Olympics in PyeongChang began. The PGA Championship The PGA Championship is one of the four most important golf tournaments of the year and took place in 2017 on the grounds of the Quail Hollow Club in Charlotte (North Carolina), USA. Omega also took on its role as the official timekeeper on this occasion and met brand ambassadors Rory McIlroy and Sergio Garcia for a very special round of golf, who appeared in astronaut suits in honor of the Speedmaster's 60th birthday. WATCHES AND JEWELRY

32 30 OTHER SPORTS Omega also took part in other international sporting events, including as a timekeeper at the 17th World Swimming Championships and the IAAF Diamond League. The brand also appeared as the title sponsor of important golf tournaments such as the Dubai Ladies Masters, the Dubai Desert Classics and the European Masters in Crans Montana. As part of the European Masters, the Omega Celebrity Masters took place in Crans Montana for the first time this year, from which Michael Phelps and Michelle Monaghan emerged as winners. LIFESTYLE Events in honor of the Speedmaster Omega ushered in the celebrations for the 60th anniversary of their legendary Speedmaster in a world of light and sound with the Lost in Space event. In addition to an exhibition of 60 historic Speedmaster timepieces, the guests of honor George Clooney and Buzz Aldrin brought the Speedmaster's past of space back to life at the event in London's Tate Modern. At more than 20 similar themed events, Omega celebrated this special anniversary together with its fans in their markets around the world. New boutique in Monaco In May, Omega opened a new boutique in the Monte-Carlo Casino in Monaco and celebrated the event with an evening event that also featured His Highness the Prince of Monaco Albert II and the actress Naomie Harris. The venue was particularly significant as it was where James Bond first appeared with an Omega watch in the 1995 film GoldenEye. Commander in action At an event with EON Productions in London's Tate Britain, which was also attended by James Bond film producer Michael G. Wilson, Omega presented the Seamaster Diver 300M “Commander's Watch” Limited Edition to the public for the first time. The watch pays homage to the glory and glamor of James Bond and was the highlight of the evening; Numerous other Bond devotional items also contributed to the espionage flair of the event. Her Time exhibition and new brand ambassadors earlier this year, Cindy Crawford supported the opening of Her Time in Sydney. The exhibition celebrated Omega's 100-year history of making elegant ladies' watches. Cindy Crawford was also there in September when Her Time opened its doors in Paris in the historic Hotel de Sully. The actress traveled with her children Kaia and Presley Gerber, who were introduced as new Omega brand ambassadors at the event. To mark the occasion, Omega unveiled an impressive portrait of photographer Peter Lindbergh's family of four. UNDER A GOOD STAR The observatory on the back of the first Omega Constellation is reminiscent of the Geneva observatory, where the chronometer competitions took place in 1931. Eight stars stand for the precision records that Omega set in these competitions. Little did the brand imagine how closely it would be tied to space exploration just a few years later. Aqua Terra Events The launch of the new Seamaster Aqua Terra collection was celebrated with two events. Eddie Redmayne was the guest of honor at the first event at the Palazzo Pisani Moretta in Venice. He presented the Aqua Terra men's collection, for which the floating city was a perfect backdrop. A few weeks later, Alessandra Ambrosio celebrated the launch of Aqua Terra for women in Miami together with Omega. The intimate event took place under the palm trees of Hibiscus Island. Opening of the new factory building In November, Omega inaugurated its newest factory at its headquarters. The building was designed by the award-winning architect Shigeru Ban. The environmentally friendly masterpiece uses sustainable wood from Switzerland and is characterized by an ingenious air conditioning and energy concept. The inside combines technical innovations and human know-how for a state-of-the-art and efficient manufacturing process. The new building is another milestone for the brand, which has been producing at this historic location since 1882. The Planet Omega Exhibition The Planet Omega exhibition continued its tour in 2017, stopping in Jakarta and Macau. With its expansive exhibits, it sheds light on the rich heritage and diverse activities of the brand, for example in the areas of watchmaking, sports, master chronometers, ladies' watches, space exploration and James Bond. She also deals with the company's social commitment. Speedmaster exhibitions As part of the celebrations for the 60th anniversary of the Speedmaster, a unique Speedmaster exhibition was held in many Omega stores around the world. The visitors were taken on a journey through the 60-year history of the legendary chronograph, which led through the topics of racing, aerospace and space exploration. PRESTIGE AND LUXURY SEGMENT / UPPER PRICE SEGMENT / MEDIUM PRICE SEGMENT / BASE SEGMENT



35 33 SOCIAL COMMITMENT Orbis International In the year under review, Omega again continued its partnership with Orbis International with the specially designed Speedmaster 38 mm “Orbis”. This blue dial timepiece is inspired by the teddy bear that Omega gives to every young patient who has been operated on at Orbis International's Flying Eye Hospital. Part of the proceeds from the sale of the various watch models goes directly to Orbis International. On the occasion of Seeing Day in October, Omega posted a photo on their social media of new brand ambassador Presley Gerber with the new Speedmaster on his wrist and an Orbis International teddy bear in his arms. FURTHER MARKETING ACTIVITIES Omega Lifetime The lifestyle magazine of the Omega Lifetime brand was published again in 2017 together with the Magnetic Edition. Omega Online 2017 started with the successful Speedy Tuesday campaign, which gave fans of the brand the first chance to purchase Omega watches online. The website saw another surge in traffic, particularly among users from China and the US, and now has a fully responsive design for optimized usability. In addition, a new customer service function is available, from which the more than 70% of visitors who access the website from a smartphone or tablet benefit in particular. In November, Omega launched its first e-commerce platform, on which customers in the USA were offered all collections exclusively online. Omega also increased its presence on social media. High-quality lifestyle content, live reports and important international campaigns all contributed to this. In addition, many international and national sponsored campaigns, the involvement of opinion leaders and several new advertising formats such as canvas and story attracted appropriate attention. Omega's Instagram account has seen a rapid increase in subscribers and is likely to surpass 1.5 million followers shortly. The brand also opened a LINE account and plans to join Pinterest and LinkedIn shortly. Publicity 2017 campaigns included a photo shoot and film with George Clooney. The campaign for the 60th anniversary of the Speedmaster was the focus of both productions. Together with Buzz Aldrin, George Clooney was also seen in the six-minute documentary Starmen, in which the two men exchanged their personal memories of the moon landing. The campaign also included a print magazine for the new Speedmaster 38 mm collection, in which moon dust serves as a fascinating background.The launch of the new women's and men's Aqua Terra models was also comprehensively communicated in a maritime-inspired 360 communication campaign with Eddie Redmayne and Alessandra Ambrosio. Shortly before the end of the year, Omega also presented a unique Christmas decoration concept for their boutiques. FINE JEWELERY This year's highlight of the Omega jewelry range was the Ladymatic Collection, in which many of the legendary design features of the Ladymatic were skillfully implemented in a collection of rings and pendants. Like all jewelry from Omega, the new collection also reflects the brand's promise of luxury. WATCHES AND JEWELRY

36 34 * August 28, 1775 Virgo WATCHMAKERS OF THE ROYAL TRENDS Breguet can look back on an extremely positive year. The manufacture started the year in an optimistic environment that was characterized by a strong presence at Baselworld. The indispensable meeting point of the high art of watchmaking provided the brand with an excellent backdrop for the launch of its latest masterpiece, the Marine Equation Marchante. This timepiece with great complication heralds a new era in the Marine range with new aesthetic features. To support this, Breguet developed a website ( and a traveling exhibition dedicated to this innovation. The communication activities surrounding the launch achieved a high media impact on an international level, especially in Russia, where the timepiece received the Best of the Best award from Robb Report magazine. The navy theme was also very present in the second half of the year. At the same time, Breguet deepened the values ​​of its Classique collection with an event concept that pays tribute to the way of life of a real gentleman. The Classic Tour, which premiered in London and then stopped in South Korea, will continue in 2018. The environment in which these events are embedded reinforces the noble image that Breguet conveys through its boutiques around the world. The boutiques are true ambassadors for the brand and are gradually being adapted to a new architectural design concept that was implemented in 2017 in Singapore, Taiwan and at the famous New York location on Fifth Avenue in the Hotel St. Regis. Women's watches were also in the spotlight in 2017. Breguet expanded the Reine de Naples and Tradition lines. In an effort to awaken the passion of many women for mechanical watchmaking, the brand was particularly present with its customers in Thailand, the USA and France. MARINE CREATION Tradition Lady 7038 The Tradition collection was expanded in 2017 to include the Tradition Lady 7038 model in rose gold. With this automatic watch, Breguet has succeeded in skillfully breathing feminine elegance into a timepiece. The main thing about the watch is its aesthetics, which allow a glimpse of the top mechanics inside. The barrel visible on the front is decorated with a floral motif. Slightly offset, a small white mother-of-pearl dial with Clou-de-Paris guilloché is enthroned at 12 o'clock. Classique 7147 The new Classique 7147 is one of those unmistakable creations characterized by classicism and tradition that can only come from Breguet. It combines all the refinements that have made up the identity of the manufactory since 1775. Based on the model of the timepieces of that era, this fire dial is evidence of a unique horological craftsmanship. Marine Equation Marchante 5887 The Marine Equation Marchante 5887, presented as a world first at Baselworld, is the first model of a newly interpreted Marine line that impresses with new aesthetic features: central case lugs with contrasting polished and satined surfaces, deeply fluted flanks, crown with relief Highlighted, polished "B" on a sandblasted background and a crown decoration in the form of angled, satined waves. Inspired by the work of Abraham-Louis Breguet, this masterpiece features a tourbillon, perpetual calendar and the traveling equation of time, one of the rarest and most intriguing complications. As a tribute to his role as watchmaker for the Royal Navy, the bridges have been carefully chiseled to show the Royal Louis, a first-rate battleship of the French Royal Navy, in every detail. GRIP FOR THE STARS All good things come from above: The same capable sailors, for whom the Breguet marine chronometers have already served so well, also used sextants to determine the angular distances between the stars and the horizon and thus orient themselves to the sun and stars when navigating . PRESTIGE AND LUXURY SEGMENT / UPPER PRICE SEGMENT / MEDIUM PRICE SEGMENT / BASE SEGMENT