3 NOVEMBER 2021 | INTERIM FINANCIAL REPORT Q3 2021 | COMPANY ANNOUNCEMENT No. 660 | page
4 | 37
BUSINESS UPDATE
Strong third quarter driven by Moments - execution on the Phoenix strategy continues at high speed
Pandora delivered solid revenue performance in Q3 2021, with sell-out growth of 9% vs 2019. The strong growth was
supported by Pandora’s biggest platform, Moments, which delivered sell-out growth of 11% vs 2019. The
performance of Moments in Q3 2021 was supported by the launch of Wearing occasions (7 DV’s of keyrings and bag
holders), which delivered an incremental 2% share of business in the quarter. Furthermore, the Wearing occasions
helped reengage existing consumers with the brand, and Pandora saw a positive halo effect supporting among others
a strong Bracelets performance. A key pillar in Pandora’s Phoenix strategy is to grow the Moments platform.
Overall, Pandora’s Global Business Unit Moments and Collabs generated 11% sell-out growth vs Q3 2019 while Style
and Upstream Innovation generated 2% sell-out growth vs Q3 2019.
The solid revenue performance was further supported by Pandora’s biggest market, US, representing 28% of revenue
in Q3 2021 vs 22% in Q3 2020. US sell-out growth vs Q3 2019 ended at 59% in Q3 2021 and continued the
accelerated growth seen in Q1 and Q2 2021, fuelled by the stimulus packages. YTD 2021 sell-out growth vs 2019 in
US was 59%. US represents a strategic priority for Pandora, and the strong performance is encouraging. The long-
term aim is to double the US business vs 2019. Market data continue to suggest that Pandora US is growing faster
than the market. Pandora expects the unusual growth in the US to slow down in Q4.
Performance in China continued to be unsatisfactory as sell-out growth vs 2019 was -45% in Q3 2021. The
performance was negatively impacted by typhoons in July followed by a COVID-19 outbreak. Pandora’s Chinese
stores were formally open in Q3, but traffic into stores was down -50% vs 2020 as most stores are located in cities
impacted by the COVID-19 outbreak. In Q3 – the second quarter in a row - Pandora was ranked the number 1 brand
in fashion jewellery on Tmall, ahead of both local and global brands. The first significant steps in the repositioning of
the brand was planned for H2 2021. However following the negative traffic development seen in Q3 due to COVID-
19, Pandora has decided to postpone a part of the planned DKK 0.2 billion media investment into 2022 – investing
in media with the purpose of among others driving traffic to the stores makes little sense as long as street traffic is
impacted by COVID-19. Pandora now expects to invest approximately DKK 0.1 billion in 2021.
As COVID-19 restrictions eased in Europe, Pandora’s network was almost fully open during Q3 with no stores closed
in the key markets Italy, Germany, UK and France vs 32% in Q2 and 71% in Q1. The opening of stores had a positive
impact on performance, and the markets delivered sell-out growth vs 2019 of 11% in Q3 vs -6% in Q2 and -17% in
Q1.
Online continued the strong performance in Q3 2021 with organic growth of 94% vs 2019 (2% vs 2020) and an 18%
share of revenue in Q3 2021 (21% in Q3 2020 and 10% in Q3 2019). As stores reopen and consumers return, the
online share of revenue is starting to normalise, but it is encouraging to see online revenue stay at a high level.
During Q3 2021, both of Pandora’s production sites in Thailand were impacted by COVID-19. Pandora has taken
significant precautionary measures, and the impact on production in Q3 was limited. The financial guidance assumes
there will be no major disruptions to the supply chain and that production in Thailand and with key suppliers continues
during Q4.