Five Year Record

Income Statement

	SWISS GAAP ARR			IFRS
	2002 €m	2003 €m	2004 €m	2005 €m	2006 €m
Sales	3860	3651	3375	3671	4308
Cost of sales	(1382)	(1367)	(1283)	(1415)	(1588)
Gross profit	2478	2284	2092	2256	2720
Net operating expenses	(1996)	(2025)	(1796)	(1771)	(2007)
Operating profit	482	259	296	485	713
Finance (costs)/income	(46)	(56)	6	(48)	5
Profit before taxation	436	203	302	437	718
Taxation	(107)	(50)	(64)	(97)	(130)
Profit after taxation	329	153	238	340	588
Minority interests	2	3	-	(2)	(2)
Net profit of the parent and its subsidiaries	331	156	238	338	586
Share of results of associated undertaking – BAT	495	486	422	493	544
Attributable net profit – underlying basis	826	642	660	831	1130
Gross profit margin	64.2%	62.6%	62.0%	61.5%	63.1%
Operating profit margin	12.5%	7.1%	8.8%	13.2%	16.6%
Effective taxation rate	24.5%	24.6%	21.2%	22.2%	18.1%

Basis of preparation

The income statement is presented on an underlying basis. Under Swiss GAAP ARR, the underlying basis excludes the effect of exceptional items and goodwill amortisation. Under IFRS, the underlying basis excludes the effect of disposal gains, restructuring charges and similar items identified in the financial review. A reconciliation to the results presented on a reported basis is given on page 125.

Analysis of Sales

	SWISS GAAP ARR			IFRS
	2002 €m	2003 €m	2004 €m	2005 €m	2006 €m
Sales by product line
Jewellery	877	837	789	844	1011
Watches	1794	1705	1560	1750	2053
Writing instruments	285	277	273	297	326
Leather goods	303	270	240	258	353
Clothing and other	601	562	513	522	565
	3860	3651	3375	3671	4308
Sales by product line
Europe	1710	1558	1458	1580	1811
Japan	744	705	625	639	723
Asia-Pacific	710	695	637	755	899
Americas	696	693	655	697	875
	3860	3651	3375	3671	4308
Sales by product line
Retail	1590	1496	1392	1509	1762
Wholesale	2270	2155	1983	2162	2546
	3860	3651	3671	3671	4308

Consolidated Income Statement

	SWISS GAAP ARR			IFRS
	2002 €m	2003 €m	2004 €m	2005 €m	2006 €m
Reconciliation of attributable net profit
As reported	608	728	320	1212	1094
Goodwill amortisation	200	186	196	-	-
Share of BAT exceptional items	18	-	144	(305)	58
Gain arising on BAT preference shares	-	(301)	-	-	-
Write down of Hanover Direct preference shares	-	29	-	-	-
Gain on partial disposal of share of BAT	-	-	-	(76)	-
Net disposal gains reported in subsidiaries	-	-	-	-	(22)
On an underlying basis	826	642	660	831	1130

Per Unit Information

	SWISS GAAP ARR			IFRS
	2002 *	2003	2004	2005	2006
Earnings per unit as reported
– basic	€ 1.089	€ 1.309	€ 0.582	€ 2.212	€ 1.978
– fully diluted	€ 1.089	€ 1.307	€ 0.578	€ 2.185	€ 1.951

Earnings per unit on an underlying basis
– basic	€ 1.479	€ 1.155	€ 1.200	€ 1.517	€ 2.043
– fully diluted	€ 1.479	€ 1.153	€ 1.193	€ 1.498	€ 2.015

Dividend per unit	€ 0.320	€ 0.320	€ 0.400	€ 0.500	€ 0.600
Special dividend per unit	-	-	-	€ 0.500	€ 0.500

	2002*	2003	2004	2005	2006
Closing market price
Highest price	CHF47.45	CHF41.25	CHF34.60	CHF38.40	CHF63.20
Lowest price	CHF26.01	CHF18.45	CHF17.70	CHF29.95	CHF35.30

* After 100:1 share split during the year

Cash Flow from Operations

	SWISS GAAP ARR			IFRS
	2002 €m	2003 €m	2004 €m	2005 €m	2006 €m
Operating profit	482	259	296	561	741
Depreciation and amortisation	133	150	145	145	134
Earnings before interest, tax, depreciation and amortisation (EBITDA)	615	409	441	706	875
Other non-cash items	46	78	6	(88)	25
(Increase)/decrease in working capital	(375)	69	114	(137)	(126)
Cash inflow from operating activities	286	556	561	481	774
Capital expenditure – net	(308)	(180)	(118)	(127)	(189)
Net cash inflow/(outflow) from operating activities	(22)	376	443	354	585

Exchange Rates

	2002	2003	2004	2005	2006
Average rates
€ : US$	0.8848	0.9947	1.1754	1.2589	1.2176
€ : Yen	110.64	121.03	132.63	135.18	137.70
€ : CHF	1.4960	1.4651	1.5459	1.5392	1.5508
€ : £	0.6176	0.6429	0.6950	0.6821	0.6821