Havneholmen 17-19
1561 Copenhagen V
CVR no.: 28505116
ANNUAL REPORT 2021
CONSOLIDATED FINANCIAL STATEMENTS
ANNUAL REPORT 2021
Approved at the Annual General
Meeting 10 March 2022
Chair
Pernille Høstrup Dalhoff
OUR PURPOSE
WE GIVE A VOICE
TO PEOPLE’S
LOVES
CHAPTER TITLE
CONTENTS
THE BIG
PICTURE
5 At a glance
6 Letter to the shareholders
7 Executive summary
9 Highlights 2021
11 Five-year summary
12 Financial guidance 2022
4
15
OUR
BUSINESS
16 Our business model
17 Our Phoenix strategy
21 Industry trends
24 People and sustainability
29 Managing risks
33
CORPORATE
GOVERNANCE
34 Corporate governance
38 Board of Directors
40 Executive Leadership Team
42 Shareholder information
49
FINANCIAL
STATEMENTS
50 Consolidated nancial statements
94 Management statement
95 Independent auditor's report
44
FINANCIAL
REVIEW
45 Group performance
47 Group protability
48 Balance sheet and cash ow
Annual Report
Our Annual Report is our detailed annual disclosure relating to
company performance, strategy, corporate governance and
financial results. The consolidated financial statements represent
an extract of Pandora’s complete Annual Report. The financial
statements of the Parent Company is an integrated part of the
full Annual Report and available at pandoragroup.com/investor/
news-and-reports/annual-reports and at cvr.dk following approv-
al at the Annual General Meeting.
Remuneration Report
Our Remuneration Report includes full disclosure of Board and
Executive Management remuneration. The report is available at
pandoragroup.com/investor/corporate-governance/remunera-
tion-reports.
49
FINANCIAL
STATEMENTS
50 Consolidated nancial statements
94 Management statement
95 Independent auditor's report
99 Parent Company nancial statements
Annual Report
Our Annual Report is our detailed annual disclosure relating to
company performance, strategy, corporate governance and
financial results.
AT A GLANCE
NO. 1 JEWELLERY
BRAND IN
THE WORLD
102
million pieces
of jewellery sold
recycled silver
and gold
54%
online share
of revenue
26%
million visits to
our physical and
online stores
670+
employees
on average
27,000
DKK billion
revenue
23.4
points of sale in more
than 100 countries
6,800
@PandoraJewelry
@theocialpandora
Pandora-a-s
@theocialpandora
@Pandora_Corp
@theocialpandora
pandoragroup.com
ANNUAL REPORT 2021 THE BIG PICTURE
We now have a high-performing online business, our product
portfolio is slimmer and more productive, we have increased
the use of data and analyses across the business, and our
organisation is stronger, flatter and faster.
Pandora is now ready to embark on the third chapter:
a chapter of growth. Our new Phoenix strategy is designed to
drive sustainable top and bottom-line growth by leveraging
our key assets: strong brand awareness, a global distribution
network and industry-leading manufacturing capabilities.
We see significant, untapped growth potential within our core
business. We have defined four pillars that will be driving our
growth. The pillars are rooted in a deep understanding of
who we want to interact with, what matters to them and then
developing inspiring solutions for all touchpoints.
We have set an ambitious plan for our company. We want
Pandora to become the largest and most desirable brand in
the affordable jewellery market. And we want to lead on
sustainability in our industry to become a low-carbon and
circular business that is also inclusive, diverse and fair.
We are proud of our achievements in 2021 – not least
considering the challenging circumstances during the
pandemic – and would like to thank all Pandora’s employees
for their commitment. Our combined efforts have changed
the company’s course and positioned us well as we enter this
new chapter of growth. We would also like to thank our loyal
customers and shareholders for their continued trust
in Pandora.
LETTER TO THE SHAREHOLDERS
A NEW CHAPTER
OF GROWTH
PETER A. RUZICKA
Chair of the Board of Directors
ALEXANDER LACIK
President & CEO
2021 was a landmark year for Pandora. We completed our
two-year turnaround, laid out a path for the future with
a new growth strategy and ended the year with record-high
revenue. We are now ready to write a new chapter in the
story of Pandora.
In the first chapter of Pandora’s story, our founders
introduced our original charms and bracelet concept,
Moments, and focused strongly on product and
manufacturing capabilities.
In the second chapter, Pandora built an extensive and
profitable global retail network and became the world’s
largest jewellery maker.
Towards the end of the second chapter, growth started
to decline and in late 2018 we initiated Programme NOW
– a comprehensive two-year turnaround programme that
has revitalised the brand and fundament ally changed how
we operate Pandora.
ANNUAL REPORT 2021 THE BIG PICTURE
Style and Upstream Innovation
Read more about segment and
revenue information in note 2.1
2021 was a milestone year for Pandora – another year where
we took significant steps forward. We successfully completed
our two-year turnaround, called Programme NOW. And we
launched our new strategy, Phoenix, charting a new chapter
of sustainable growth in the years ahead.
In 2021, Pandora delivered its highest ever revenue at DKK
23.4 billion. This corresponds to organic revenue growth of
23% compared to 2020. Exiting 2021, we saw broad-based
growth across markets in Q4 and total sell-out reached the
highest level ever. Throughout 2021, growth was supported
by an extraordinarily strong year in our largest market, the
US; growth in our core product platform, Moments; and con-
tinued solid performance in our online channel. Furthermore,
despite COVID-19 and owing to significant mitigating actions,
our production in Thailand and our ability to meet demand
were not significantly impacted by the pandemic.
EXECUTIVE SUMMARY
BACK ON A GROWTH TRACK
Growing the core and fuelling with more
In 2021, our Global Business Unit, Moments and Collabs rep-
resented 71% of total revenue and delivered sell-out growth
of 20%. Growing Pandora Moments is a key pillar in the Phoenix
strategy. The performance of Moments was supported by the
launch of Wearing Occasions, such as bag holders and key rings.
Our second-largest platform, Pandora Timeless, represented
17% of total revenue in 2021, delivering sell-out growth of
19%. Timeless is part of Pandora’s Global Business Unit Style
and Upstream Innovation.
In order to drive incremental revenue growth, "fuel with more",
Pandora is launching new product platforms that are within
or close to the existing core business. In 2021, we launched
OUR CHANNELS
Revenue, DKK, and share
of revenue, %
Pandora
physical stores
9,945m
42% share of revenue
Wholesale and
third-party distribution
7,472m
32% share of revenue
71% 29%
Pandora Brilliance, our first collection of lab-created diamond
jewellery, as a pilot in the UK. The aim is to make Brilliance
a new platform alongside Pandora Moments and Pandora
Timeless by democratising diamonds. Pandora Brilliance will
be sequentially rolled out globally from 2022.
At the end of September, we relaunched Pandora ME, which
targets a Generation Z mindset. The relaunch saw significant
engagement on social media. Pandora ME accounted for 4%
of revenue in Q4 2021.
Digital investments continue to generate
encouraging results
Our online channel continued to deliver very strong results
and almost doubled compared to 2019. Online sales account-
ed for 26% of total revenue in 2021. Digital plays a key role in
our new strategy, both as a foundation and a growth pillar. In
most countries, our online store is the largest portal to our
brand. Our new digital organisation delivers constant improve-
ments to the customer experience. Tangibly, we note that on-
line conversion continues to improve. We continue to expand
our omnichannel features. There is strong consumer interest
in Click & Collect in the US, which accounted for 11% of our US
online sales in 2021. We recently rolled out Click & Collect in
France, Italy, Germany, New Zealand, Canada and Australia.
Read more about our new strategy, Phoenix, on page 17.
Moments and Collabs
Pandora
online stores
5,977m
26% share of revenue
OUR GLOBAL BUSINESS UNITS
Share of revenue, % of total
ANNUAL REPORT 2021 THE BIG PICTURE
Strong and broad-based underlying growth
Our largest market, the US, saw extraordinary growth in 2021.
Organic growth compared to 2020 was 58%. There were
two principal drivers of growth. Firstly, the entire jewellery
segment grew, aided by the stimulus packages introduced to
support the economy during the COVID-19 pandemic and
the reallocation of consumer spending away from travel and
services towards gifting and discretionary goods. Secondly,
Pandora outperformed the market, driven by a range of
initiatives across online, stores, omnichannel and media.
Pandora continues to see ample growth opportunities in
the US in the mid-term, for example through higher brand
awareness and network expansion, as presented at the
Capital Markets Day.
Our key markets in Europe were impacted by temporary
store closures during the early part of 2021 due to COVID-19.
As stores reopened, Pandora saw a strong rebound in these
markets and delivered encouraging and positive growth in
both Q3 and Q4.
Performance in China, Australia and other Asian markets was
significantly impacted by COVID-19. Like our key European
markets, performance in Australia was positive when stores
were open, indicating a healthy underlying business. Due to
the continued and widespread COVID-19 restrictions during
the second half of 2021, Pandora postponed its planned
investment to transform its business in China.
On average, the share of Pandora stores temporarily closed
due to COVID-19 was 30% in Q1, 15% in Q2, 5% in Q3 and 3%
in Q4. In addition to the temporary store closures, revenue
was impacted by other types of COVID-19 restrictions im-
posed by governments during the year, not least in China.
Brand momentum remains strong
Our strong brand momentum continued in 2021and Pandora
maintained a leading brand position. Pandora’s global unaided
brand awareness remained well ahead of the closest competi-
tor, and we ranked number one in five out of seven key markets.
Financial performance
Total revenue reached DKK 23.4 billion, corresponding to
revenue growth of 24% in local currency. The revenue growth
was reflected in an increase in the EBIT margin from 20.4% in
2020 to 25.0%, demonstrating the operating leverage in our
business model.
In 2020, Pandora cautiously paused cash distribution to share-
holders due to the pandemic. In 2021, Pandora resumed cash
distributions. The distributions announced in 2021, including
both dividends and share buybacks, totalled DKK 5.5 billion
and were distributed to shareholders from May 2021 to
February 2022.
For 2022, the Board proposes a dividend of
DKK 16 per share and a new share buyback programme of DKK
3.3 billion.
Read more about our financial performance in our
Financial review on page 44.
US
DKK 7,026m
30%
2020: DKK 4,506m
24%
Italy
DKK 2,443m
10%
2020: DKK 2,021m
11%
Australia
DKK 1,131m
5%
2020: DKK 1,120m
6%
China
DKK 1,126m
5%
2020: DKK 1,261m
7%
Germany
DKK 1,191m
5%
2020: DKK 1,014m
5%
UK
DKK 3,314m
14%
2020: DKK 2,960m
16%
France
DKK 1,122m
5%
2020: DKK 1,154m
6%
OUR KEY MARKETS
Share of revenue, % and DKK
ANNUAL REPORT 2021 THE BIG PICTURE
Cutting emissions
In September 2021, we announced that we will
halve our greenhouse gas emissions across our own
operations and entire value chain of suppliers and
business partners by 2030. The target has been
approved by the Science Based Targets initiative and
is based on an extensive decarbonisation plan across
Pandora’s business to align with the Paris Agreement
and what climate science says is necessary to limit
global warming to 1.5C. Pandora has also committed
to net zero emissions across its entire value chain by
2040.
Read more about our sustainability efforts
on page 26.
Towards growth
Following a successful turnaround, we launched our new
growth strategy, Phoenix, in May 2021. The strategy targets
the significant untapped potential to grow Pandora’s existing
business and attract new consumers to the brand. Phoenix is
based on four growth pillars: brand, design, personalisation
and core markets, and aims at delivering sustainable and
profitable revenue growth. The revenue growth target for
2021-2023 is 6-8% per annum and an EBIT margin of
25-27% in 2023.
Diamonds are for everyone
With the goal of making diamond jewellery
accessible to a wider audience, we launched
Pandora Brilliance, a collection of sustainably
lab-created diamond jewellery. Pandora’s
diamonds are CarbonNeutral® certified and
created using more than 60% renewable energy
on average. We also announced that we will no
longer use mined diamonds in our products.
Lab-created diamonds are identical to mined
diamonds, but created in a laboratory rather
than extracted from a mine. The collection
was initially test launched in the UK, with a
sequential global roll-out to begin from 2022.
Read more on page 20.
New sustainability-linked loan
In April 2021, we secured a new EUR 950 million credit facility
with an interest rate linked to two of our 2025 sustainability
goals: becoming carbon neutral in own operations and using
only recycled silver and gold. The new loan is part of our
liquidity reserve and connects our capital structure to our
sustainability agenda.
HIGHLIGHTS
ANNUAL REPORT 2021 THE BIG PICTURE
Pandora ME relaunch
Pandora initially launched Pandora ME in late
2019. The collection has since been refined to
specifically target Generation Z, and in October
2021 a relaunch was initiated with the aim to
establish Pandora ME as a new platform. We
have combined Generation Z’s love of music and
fashion to inspire our fans, and the new collection
includes many options for customisation, such
as a variety of new metals, colours, mini dangles,
link chain bracelets and necklaces. Pandora ME
accounted for 4% of revenue in Q4 2021.
Diversifying our global supply network
To meet expected future demand and diversify our
geographical footprint, Pandora announced plans to invest
DKK 1 billion in new manufacturing capacity. We will build
a new facility in Vietnam, capable of crafting 60 million
pieces of jewellery annually. Additional capacity of around
20 million pieces will also be added close to one of our
existing production sites in Thailand. This represents a total
expansion of our capacity by around 60%. The new crafting
facilities are expected to open by the end of 2023 in
Thailand and by the end of 2024 in Vietnam.
Plastic out
Switching to low-carbon packaging is important to
reduce our greenhouse gas emissions, and in 2021 we
introduced new and improved bags and boxes across
our stores and online. Without compromising on quality,
the new packaging cuts emissions by more than 60%,
and because it is made with fewer materials, it is also
easier to recycle. Our carrier bags will no longer contain
any plastic, and plastic content in jewellery boxes will
be reduced by more than 75%. The new designs are ex-
pected to reduce Pandora’s carbon footprint by 3,600
tCO
2
e per year, equivalent to the annual emissions of
800 cars or around 1% of Pandora’s total emissions.
HIGHLIGHTS
THE BIG PICTURE
DKK million 2021 2020 2019 2018 2017
,
Key nancial highlights
Organic growth, % 23% 11% 8% 2% 11%
Organic growth, % vs 2019
3
9% na na na na
Sell-out growth, incl. temporarily closed stores, % 20% 12% 8% 4% 0%
Sell-out growth, incl. temporarily closed stores, % vs 2019
3
7% na na na na
Gross margin, %
4
761% 765% 774% 743% 745%
EBIT margin, %
4
250% 204% 268% 282% 342%
Consolidated income statement (reported)
Revenue 23394 19009 21868 22806 22781
Earnings before interest, tax, depreciation
and amortisation (EBITDA) 7838 4999 6148 7421 8505
Operating prot (EBIT) 5839 2684 3829 6431 7784
Net nancials 461 190 1 151 117
Net prot for the period 4160 1938 2945 5045 5768
Financial ratios
Revenue growth, DKK, % 23% 13% 4% 0% 12%
Revenue growth, local currency, % 24% 11% 6% 3% 15%
Gross margin, % 761% 756% 727% 743% 745%
EBITDA margin, % 335% 263% 281% 325% 373%
EBIT margin, % 250% 141% 175% 282% 342%
Eective tax rate, % 226% 223% 231% 234% 248%
Equity ratio, % 38% 37% 24% 33% 37%
NIBD to EBITDA excl. restructuring costs, x 04 05 11 08 06
Return on invested capital (ROIC), % 59% 25% 27% 53% 68%
Cash conversion incl. lease payments, % 88% 183% 133% 86% 68%
Net working capital, % of last 12 months revenue 50% 76% 13% 67% 88%
DKK million 2021 2020 2019 2018 2017
,
Stock ratios
Total payout ratio (incl. share buyback), %
6
115% 65% 147% 104% 99%
Dividend per share, proposed for the year, DKK 160 90 90 90
Dividend per share, paid, DKK 150 90 90 270
Earnings per share, basic, DKK 421 200 303 472 520
Earnings per share, diluted, DKK 417 199 301 470 518
Consolidated balance sheet
Total assets 18542 19984 21571 19244 17428
Invested capital 9884 10540 14268 12071 11369
Net working capital 1181 1447 293 1536 2008
Net interest-bearing debt (NIBD) 2882 3151 9019 5652 4855
Equity 7001 7389 5249 6419 6514
Consolidated statement of cash ow
Cash ow from operating activities 6228 5975 6775 6624 6606
Capital expenditure – total 641 491 822 1129 1388
Capital expenditure – property, plant and equipment
341 369 556 753 946
Free cash ow incl. lease payments 5137 4908 5075 5558 5294
Sustainability
Scope 1, 2 and 3 emissions, mtCO
2
e 277450 266075 296777 na na
Recycled silver and gold, total, %
8
54% 57% 60% na na
Leadership gender ratio, female/male, %
9
2377 na na na na
FIVE-YEAR SUMMARY
1
Figures have been restated to reect the adoption of IFRS 15.
2
Comparative gures have not been restated following the adoption of IFRS 16 Leases.
3
Revenue performance compared with 2020 was heavily distorted by COVID-19, as both years were impacted by store closures. Pandora has therefore added
two supplementary growth KPIs vs 2019 to provide a cleaner view on the performance: Organic growth vs 2019 and Sell-out growth vs 2019. These two KPI's will
be removed from 2022 onwards.
4
2019 and 2020 gures exclude Programme NOW restructuring costs.
5
For 2017, Invested capital and NIBD have been restated due to immaterial reclassications. Consequently, NIBD to EBITDA and ROIC have been recalculated.
6
Excluding sale of treasury shares amounting to DKK 1.8 billion in Q2 2020.
7
Within limited assurance scope, measured in mtCO
2
e (metric tons of carbon dioxide equivalent). The Scope 2 emissions are calculated as market-based emissions.
8
Within limited assurance scope. As a requirement of our sustainabili ty-linked credit facility, we have decided to report the actual percentage of our recycled
silver and gold total.
9
Leaders from Vice President positions and up, incl. the Board.
ANNUAL REPORT 2021 THE BIG PICTURE
FINANCIAL
GUIDANCE 2022
10-20%, following the very strong growth in 2021. Pandora
expects to continue outperforming the general US market
– as has been the case for the last several quarters – and
deliver organic growth in 2022 between high single-digit
negative and slightly positive.
It should be noted that if Pandora's US revenue declines
by a high single-digit percentage in 2022, it still equals an
organic growth CAGR in the low teens compared to 2019.
Additionally, the low end of the 2022 guidance range assumes
that COVID-19 will continue to impact performance negatively
and mainly in Q1 (high single-digit percentage negative impact
in Q1 2022, corresponding to a low single-digit percentage
negative impact for the full year). This is obviously associated
with uncertainty.
As a global brand, Pandora’s financial performance is subject
to changes in the macroeconomic environment, consumer
behaviour as well as geopolitical unrest. Pandora sees greater
uncertainty than usual around these factors in 2022. In addi-
tion, the guidance for 2022 does not assume further material
COVID-19 outbreaks later in 2022 or major disruptions in
the supply chain.
Sustainable and profitable growth
to continue
The Phoenix strategy aims to deliver sustainable and profit-
able growth. And in 2021 Pandora delivered on that promise.
In 2022 Pandora expects to continue the journey and deliver
solid organic revenue growth – confirming that the company
is back on the growth track.
Pandora targets an organic growth of 3-6% and an EBIT margin
of 25.0-25.5% in 2022. This includes expected headwinds when
comparing to the unusually high US growth in 2021 and expect-
ed negative impact from COVID-19, especially in Q1 2022.
Given that the US constituted 30% of revenue in 2021 and
given the unusually high growth in 2021, the guidance is
based on certain assumptions about the growth in the over-
all US jewellery market. The guidance is also based on certain
assumptions about the COVID-19 impact in 2022. The key
assumptions behind the organic growth is illustrated to
the right.
Revenue guidance
Pandora’s guidance for 2022 is best understood by looking
at the US and Rest of world separately. In 2022, Pandora
assumes that the general US jewellery market will decline
ORGANIC GROWTH GUIDANCE
%-points approximations
2021
Actuals
US
Rest of
world
2-4% sell-out growth,
other and COVID-19
Network
expansion
2022
Guidance
Forward
integra-
tion
Local
currency
growth
Foreign
exchange
rates
2022
Revenue
23.4
DKK billion
DKK billion
1-2% 3-6%
1% 4-7%
3% 25.0-25.7
ORGANIC GROWTH ASSUMPTIONS
Directional and indicative
3% 6%
COVID-19
Low single-digit
negative impact
No to very limited
negative impact
Pandora US
Negative mid- to
high single-digit
Flat to slightly positive
Pandora Rest of world Positive high single-digit Positive high single-digit
ANNUAL REPORT 2021 THE BIG PICTURE
FOREIGN EXCHANGE AND COMMODITY
ASSUMPTIONS AND IMPLICATIONS
Average
2021
Average
2022
Financial impact
2022 Y-Y
USD/DKK 629 667
THB/DKK 020 020
GBP/DKK 839 895
CNY/DKK 098 105
AUD/DKK 472 470
Silver/USD (per ounce) 211 249
Revenue (DKK million) Approx 700
EBIT (DKK million) Approx 100
EBIT margin (FX) Approx 05%
EBIT margin (Commodities) Approx 10%
EBIT MARGIN GUIDANCE BRIDGE
%-points approximations
Write-o
IT & larger
bonus
pool
Government
support
& rent
concession
2021
Actuals
25.0% -0.9%
0.4%
2021
Actuals
adjusted
24.5%
Operating
leverage
1.0-1.5%
Foreign
exchange
0.5%
Commodities
-1.0%
2022
Guidance
25.0-25.5%
Profitability guidance
Pandora aims to continue to expand its EBIT margin and
targets an EBIT margin of 25.0-25.5% in 2022. The building
blocks in the guidance are illustrated in the bridge.
In 2021, a number of non-recurring factors positively impacted
the EBIT margin by 0.5%. Pandora received DKK 152 million in
government support and DKK 56 million in rent concessions,
positively impacting the EBIT margin by 0.9%. This was partly
offset by non-recurring costs of around DKK 100 million
related to write-off of IT assets and a larger bonus pool in Q4
2021 dragging down the EBIT margin by 0.4%. Adjusting for
these non-recurring impacts, the underlying EBIT margin in
2021 was 24.5%.
The margin expansion in 2022 is driven by operating leverage.
Where Pandora will land within the 25.0-25.5% range, will
depend primarily on the revenue performance. As in prior
years and in line with normal seasonality, Q4 is expected to
be the most profitable quarter of the year by far.
Current foreign exchange rates, if unchanged, are estimated to
favourably impact the EBIT margin in 2022 by approximately
0.5% compared to 2021. This is offset by a negative impact
from commodities, mainly silver prices, of approximately -1.0%.
2022 Guidance – other parameters
CAPEX for 2022 is expected to be around 6% of revenue
(2021 actual: 3% of revenue). The increase is among others
due to opening of new stores and expansion of manufac-
turing capacity. The guidance for the store network devel-
opment is net 50-100 concept store openings (2021 actual:
71 net closures) while other points of sale is expected to
increase by net 50-75. The effective tax rate is expected to
be 23-24%, up from 22-23% in prior years. The increase is
related to among others increased withholding taxes
on dividends upstreamed to the Parent Company and
non-deductible expenses related to China and Panama.
2023 targets
Pandora reconfirms its targets communicated at the Capital
Markets Day in September 2021. Pandora targets organic
growth of 5-7% CAGR from 2021 to 2023 and 25-27% EBIT
margin in 2023. As a consequence, the absolute revenue
target in 2023 is raised from DKK 24.8-26.2 billion to DKK
27.0-28.1 billion.
Capital structure policy and cash distribution
At the end of December 2021 and following another year of
strong cash generation, Pandora’s leverage was only 0.4x NIBD
to EBITDA, below our capital structure policy of 0.5-1.5x. Dur-
ing 2021, Pandora paid extraordinary dividends of total DKK
15 per share. In addition, from 5 May 2021 to 4 February 2022,
Pandora bought back 4.8 million shares at an average price of
around DKK 829 equivalent to a total value of DKK 4.0 billion.
Based on the strong results for 2021, Pandora continues
distributions to shareholders with a proposed dividend of
DKK 16 per share and a new share buyback programme of
DKK 3.3 billion.
Cash distribution to the shareholders is, by law, limited to
the amount of the free reserves in the Parent Company.
As of 31 December 2021, free reserves in the Parent
Company amounted to DKK 7.5 billion.
Disclaimer: the guidance contains forward-looking statements, which include esti-
mates of nancial performance and targets. These statements are not guarantees
of future performance and involve certain risks and uncertainties. Therefore, actual
future results and trends may dier materially from what is forecast in this report
due to a variety of factors, please also refer to the full disclaimer on page 93.
ANNUAL REPORT 2021 THE BIG PICTURE
CUSTOMER
The Pandora brand is accessible to people at all stages of
life, and there is a fairly even split across age groups. In the
coming years, Generation Z and Millennials are expected
to be key growth drivers representing more than 60% of
personal luxury goods consumption by 2026, so Pandora is
increasing its investments in this target group. We already
enjoy a fairly strong position among women in the 18-34 age
bracket, who represent 44% of Pandora owners today.
Throughout history, humankind has shared feelings of
happiness, love, pride and belonging. This need for self-
expression lies at the heart of connecting with our partners,
friends, family and many others, and it is the essence of our
jewellery. That is why Pandora is a story about touching the
lives of hundreds of millions of people. Every day, people
express who they are and what matters to them with their
Pandora jewellery.
People of all backgrounds buy Pandora jewellery. In fact, it
is not possible to define a typical customer by age, income
bracket or other demographics, but rather a desire to express
emotions for passions, places and people through their
jewellery. If we look at our key markets, a Pandora customer
generally owns more than ten pieces of Pandora jewellery.
Most Pandora wearers are women, but more than half of our
customers are in fact men who buy jewellery as gifts for their
loved ones. Research shows that women often influence the
choice of gifts. Around half of presents are bought after a
‘hint’ from a woman.
THE PANDORA
"I am wearing jewellery
that represents me and
what I want to give to the
world. My beloved Queen
Bee charm symbolises
being the queen in my
own life and standing tall
in who I am."
"I treasure how I can express myself
through Pandora. It symbolises me.
My ‘Wonder Woman’ engraving makes
me feel strong and reminds me to keep
dreaming big and stay true to myself."
DESTINEE
Pandora wearer for 3 years
REBEKAH
Pandora wearer for 18 years
STORY
ANNUAL REPORT 2021 STORY
OUR BUSINESS
MODEL
Natural resources:
Raw materials
and energy
Community:
Employees and
stakeholder engagement
Innovation:
Data and
design
Manufacturing:
Crafting facilities
Supply chain:
Supplier partnering
Financial:
Cash flow
Natural resources:
Recycling, emissions
and waste
Community:
Job creation and
tax contribution
Innovation:
Relevant and
personalised products
Manufacturing:
Crafting at scale
Supply chain:
Sustainable supply chain
Financial:
Shareholder returns
INPUT BUSINESS ACTIVITIES OUTPUT
Crafting
at scale
Strong marketing
and brand
Omnichannel
retail operations
Data-driven
design
Responsible
sourcing
Ecient
distribution
OUTCOME
Affordable
luxury with
sustainability
integrated from
source to sale
Industry-leading
profitable
growth
Every day, millions of people express who they
are and what matters to them with their Pandora
jewellery. Whether it is a display of friendship or
romance, or a love for art, gardening or our planet.
Our jewellery is a way to show these loves. That is
our purpose: We give a voice to people’s loves.
ANNUAL REPORT 2021 OUR BUSINESS
In May 2021, Pandora completed its two-year turnaround
programme, Programme NOW, and introduced a new growth
strategy, Phoenix.
Programme NOW has stabilised Pandora’s top line while
maintaining our industry-leading profitability. The programme
has strengthened the foundation of Pandora and continues
to do so.
Phoenix builds on our strong foundation and centers on the
significant untapped opportunities in Pandora’s core busi-
ness. The gross list of opportunities is rich and we have delib-
erately prioritised the most important ones to stay focused.
The strategy has four pillars aiming at delivering sustainable
and profitable revenue growth: brand, design, personalisa-
tion and core markets.
Strong foundation
To succeed with our strategy, we rely on our strong foundation:
People — We work as a world-class team leveraging our global
presence. Our operating model enables us to deliver a strong
and consistent customer shopping experience while we
constantly refine our ability to work as one global company
with one brand expression, shared processes and clear roles.
We strive to create a healthy performance culture powered
by innovative digital solutions.
Read more about people on page 24.
Digitalisation — The solid digital foundation we are building
will enable us to deliver on our strategy. This includes our new
digital powerhouse in Copenhagen, more use of data and
advanced analytics in everything we do, modern IT solutions,
and many other aspects of digitalising our business.
Sustainability — We believe high-quality jewellery, strong
business performance and high ethical standards go hand in
hand, and we craft our jewellery with respect for resources,
environment and people. Our ambition is to be an industry
leader in sustainability as we strive to become a low-carbon
and circular business that is also inclusive, diverse and fair
with a positive impact across our entire supply chain.
Read more about sustainability on page 26.
Phoenix builds on our strong
foundation and is focused
on the significant untapped
opportunities in Pandora’s
core business.
OUR PHOENIX
STRATEGY
ANNUAL REPORT 2021 OUR BUSINESS
Excellence — We will continue to improve our operational
excellence, leveraging our profitable store network while at
the same time continuing the cost-conscious mindset which
we demonstrated through Programme NOW.
Scale — Pandora is the largest jewellery manufacturer in the
world, and we will continue to strengthen this part of our
organisation to benefit from our scale. Through an integrated
and sustainable supply base we will enable consumer-centric,
innovative products while at the same time driving continu-
ous optimisation of cost, quality and service.
Growth pillar 1: Brand
Pandora is a global affordable luxury brand that enjoys
a high level of consumer awareness, strong brand equity,
and a loyal customer base. Our global brand tracker surveys
show that consumer perception mirrors our brand promise,
and Pandora scores higher than category average on key
attributes that drive brand desire, such as “help me to
express my personality”.
To ensure that Pandora also wins the hearts of the new
generations, we will continue our efforts to increase brand
desirability. We use behavioural science, data analytics and
social listening to understand our consumers, as we aim to
create engaging, authentic and culturally relevant brand
experiences across all touchpoints, including products,
campaigns, stores, selling ceremony, online and more.
We have increased our media investments significantly
in the last three years, and we will continue to invest at a
competitive level to maintain brand awareness leadership
in today’s complex and fragmented media landscape.
Moments and Collabs
Pandora Moments, home of our iconic snake
chain bracelet and more than 12 different
jewellery themes, is the core of our business
and allows for self-expression, modern story-
telling and collectability. We also collaborate
with well-known brands to create jewellery
with characters and icons from universes
like Harry Potter, Star Wars
(TM)
and Disney.
In total, Moments and Collabs accounts
for 71% of revenue.
Style and Upstream Innovation
To fuel our brand with incremental growth,
we offer our consumers additional collections.
The Pandora
product universe
The elegant designs from Pandora
Timeless (17% of revenue) have a modern
twist and include Pandora Timeless Wish
with its wishbone motifs, and the distinct
mesh bracelets from Pandora Reflexions.
Another collection is Pandora
Signature (9% of revenue), character-
ised by the Pandora logo, pavé, heart
motifs and geometric linear beauty.
Pandora ME (3% of revenue) pays
tribute to a Generation Z mindset in
a uniquely bold and customisable link
chain design and styling accents to
reflect every side of your personality.
Pandora Brilliance (0.2% of revenue)
seeks to democratise diamonds
by
using sustainably lab-created diamonds
elevated in designs of floating and unique
shapes lending a stand-alone luxurious
expression.
ANNUAL REPORT 2021 OUR BUSINESS
testing a new store concept to support further personalisation.
The first three stores under the new concept were launched for
testing in the UK, Italy and China in late 2021.
Read more about our omnichannel efforts on page 32.
Growth pillar 4: Core markets
Pandora sees ample opportunities to grow its core markets.
The highest potential for growth is in the US and China, where
the network footprint is underpenetrated. Additionally,
Growth pillar 2: Design
Pandora has three clear design priorities: drive the core
(Moments), fuel the brand with more platforms, and establish
dedicated support models for each platform.
Pandora’s original charms and bracelet offering, Moments, has
formed the basis for the company’s success over the past two
decades, and today Moments and Collabs jewellery accounts
for 71% of total revenue. Pandora sees an opportunity to con-
tinue growing the Moments business by ensuring a strong pipe-
line of innovation behind charms and charms carriers, person-
alisation and collaborations. Combined with commercial focus
and visibility this will ensure we build on our core strength.
To fuel the brand with more, Pandora will add new product
platforms to its assortment, such as Pandora ME and Pandora
Brilliance. These new brand universes will be designed to
target specific consumer segments, and we view them as low-
risk opportunities. For all new platforms, the aim is to drive
incremental growth and reach at least 5% of revenue. When
going to market, Pandora will introduce new platforms in steps
to test, learn and adjust before potentially scaling up.
Both our core business and our new platforms will have dedicat-
ed support along the full value chain, from creation to purchase.
Rather than leaving new products a few weeks after launch, we
will continue to leverage their potential across the year.
Growth pillar 3: Personalisation
One of our key strengths at Pandora is our direct relationship
to millions of consumers. This connection provides rich insights
that can help the company offer a better and more personalised
service throughout the whole customer journey. The aim is to
provide a more relevant and customised omnichannel shopping
experience across stores and online. The company is currently
OUR GLOBAL
BUSINESS UNITS
the Pandora brand is not as strong as in the UK, Italy and
Australia, and we see potential to drive revenue growth
through higher brand awareness. The long-term ambition is
to double revenue in the US and triple revenue in China using
2019 as a baseline. Markets like France and Germany also
represent opportunities for growth, as brand awareness is
also lower in these markets than in the UK, Italy and Australia.
Read more about our focus on the US and China on
page 23.
Style and Upstream
Innovation
Share of revenue
2020: 29%
29%
Moments and Collabs
Share of revenue
2020: 71%
71%
ANNUAL REPORT 2021 OUR BUSINESS
They have the same optical, chemical, thermal and physical
characteristics and are graded by the same standards known
as the 4Cs – cut, colour, clarity and carat – before being set
within the Pandora Brilliance collection.
Pandora Brilliance was initially launched in the UK in order to
test and learn. The test proved to be important and resulted
in a range of adjustments to the go-to-market model for
Pandora Brilliance. In November 2021 it was decided to
initiate a step-wise global launch from 2022. The aim is to
reach minimum 5% of global revenue and establish Pandora
Brilliance as a new collection for the company alongside
Pandora Moments, Pandora Timeless, Pandora Signature and
Pandora ME.
Pandora’s diamonds are CarbonNeutral® certified and
created using more than 60% renewable energy on average.
We aim to reach 100% when we begin to sequentially roll out
globally from 2022.
piece collection, including
rings, pendant and necklaces,
bracelets, open bangles
and earrings
of the energy used to create the
lab-created diamonds on average
comes from renewable sources
36
+60%
NOT JUST FOREVER
BUT FOR EVERYONE
DIAMONDS ARE
In 2021, Pandora introduced Pandora Brilliance, a jewellery
collection featuring lab-created diamonds. The 36-piece
collection includes rings, pendant and necklaces, bracelets,
open bangles and earrings, each carrying a solitaire lab-
created diamond hand-set within sterling silver, solid 14K
yellow gold or solid 14K white gold. With Pandora Brilliance,
Pandora aims to make diamond jewellery accessible to a
wider audience by offering affordable, sustainably created
products.
“The use of lab-created diamonds is new territory for
Pandora. They are as much symbols of innovation and
progress as enduring beauty, and the collection is testament
to our ongoing and ambitious sustainability agenda.
Diamonds are not only forever, but for everyone,” says
Stephen Fairchild, Chief Product Officer.
Lab-created diamonds are identical to mined diamonds but
created in a laboratory rather than extracted from a mine.
STORY
ANNUAL REPORT 2021 STORY
In the last decade, the global jewellery market has grown 4% per annum
1
to a total forecasted value of more than DKK 2,000 billion in 2021. The
market remains highly fragmented, and although global brands are grow-
ing faster than the overall market, they still make up a relatively small
share. The business landscape is currently undergoing dramatic changes,
some of which have been accelerated by COVID-19. Four major industry
trends are of particular relevance to our Phoenix strategy.
1
Euromonitor data 2009-2019 – weighted market development with Pandora sales for top-10 markets.
INDUSTRY TRENDS
IN TIMES
OF CHANGE
TREND
Data-driven personalisation
One of the fundamental shifts in consumer behaviour is the
demand for personalised products, services and interactions.
As an example, 70% of consumers expect companies to deliver
personalised interactions. In recent years, global brands have
implemented more personalisation at consumer touchpoints
across physical and online channels. Investments in machine
learning and data analytics to increase the relevance of cus-
tomer interactions are paying off.
PANDORA’S RESPONSE
Pandora wants to create a highly personalised
experience for shoppers across channels. One
important ingredient to be able to do that is
data. In 2020, we ran a first pilot on personalised
newsletters and banners to analyse the impact on
our customers. In 2021, we scaled our personalised
newsletter to eight key markets (the US, Australia,
France, Germany, Italy, the UK, the Netherlands
and Poland), and we started onboarding Spain in
Q4 2021. In 2021, we sent 65 million emails with
personalised product recommendations. The click-
to-open rate increased by 50% compared to our
standardised newsletters.
PANDORA’S RESPONSE
We have invested significantly in digital
capabilities in recent years. We have established
a strong Digital Hub with talent from around the
world, and we are moving our online stores to
a new and unified architecture and code base,
which will make them easier to upgrade. Many of
the digital initiatives we developed in response
to COVID-19 have proven successful and will
become permanent features. In 2021, visitors
to pandora.net were 47% more likely to buy, if
they used the Virtual Try-On feature. Pandora will
continue to enhance the digital experience with
new features such as an upgraded gift finder, a
Pandora ME bracelet builder, online engraving,
and continued roll-out of Click & Collect.
TREND
Acceleration of e-commerce
COVID-19 has accelerated the ongoing shift to digital as
more consumers choose to shop from home. In 2021,
online jewellery retail sales increased by 9% globally. Brands
responded with digital innovations to bring the in-store
experience online, such as virtual fitting rooms aided by
augmented reality and online shopping events. It is believed
this trend will continue: 50% of customers prefer flexible
shipping and fulfilment options such as Click & Collect.
Four major
industry
trends are
of particular
relevance to
our Phoenix
strategy.
ANNUAL REPORT 2021 OUR BUSINESS
TREND
Running the business, sustainably
Consumers are increasingly willing to change their purchasing
habits to reduce environmental impact, and brands must
embrace sustainability to win the trust of younger consumers.
Purchases of fine jewellery influenced by sustainability
considerations are expected to increase significantly over the
coming years. The COVID-19 pandemic has arguably generated
even greater interest in social responsibility initiatives, notably
related to safeguarding the health and safety of customers,
employees and local communities.
PANDORA’S RESPONSE
Pandora has taken an industry lead by
demonstrating how sustainability can be
integrated across all activities, from source to
sale. We have set ambitious targets to become
a low-carbon and circular business that is also
inclusive, diverse and fair. We also continue our
partnership with UNICEF to support their work
with children, especially girls, around the world
through learning and skills development, rights
awareness and gender equality activities. In 2021,
we received the highest ranking in MSCI's annual
sustainability rating for the sixth consecutive year.
Read more about our sustainability efforts on
page 26.
PANDORA’S RESPONSE
Pandora has more than 27 million store
transactions yearly, and physical retail remains
central to meet our customers’ shopping
preferences. In 2021, we redeveloped our selling
ceremony to focus not only on the physical store,
but also online. In addition, we trained our teams
to support new collections such as Pandora ME
and, in the UK, Pandora Brilliance.
We have launched new and advanced in-store
tech, providing store colleagues with more
mobile points of sale, including digital queuing
management systems to benefit an efficient
customer journey. To further drive traffic and
conversion, we are developing a new store
concept, and late 2021 we started testing a
pilot in Italy, the UK and China. We have also
installed engraving machines in most of our
stores in North America to enable even more
personalised jewellery.
Read more about our omnichannel initiatives on
page 32.
TREND
Repurposing store space
The high street environment continues to change and has
also had to adapt to social distancing and safety guidelines
due to COVID-19. Customers have become more purposeful
when visiting stores, leading to a decrease in shopping traffic,
less patience for queues, and higher demand for an efficient
experience.
While there has been a notable shift to online shopping
due to COVID-19, physical retail is expected to continue to
play a significant role in the way consumers shop, and the
pandemic could be a catalyst for change. For example, brands
experiment with creating modular spaces that can be used for
retail as well as events.
ANNUAL REPORT 2021 OUR BUSINESS
CORE MARKETS
To grow Pandora in China, the world’s largest jewellery
market, we have a comprehensive two-phase plan. First,
Pandora will solidify the brand by establishing the core
proposition of collectability, affordability and self-
expression. This work involves many areas of the business,
including a redesign of our marketing communication to
make it more relevant, a transformation of our customer
experience online and offline to make it more meaningful,
and an optimisation of our product assortment and
commercial calendar to better engage Chinese consumers.
As the first phase gains traction, we will launch the second
phase of growing our store network.
Both the US and China plans have a common, key element:
our people. Having the right teams in our markets and
supporting functions is critical to fuel our ambitions.
We have therefore been investing in recruitment and
internal development to bring on board and retain
world-class talent.
The Phoenix strategy identifies significant growth opportu-
nities for Pandora. We are focused on the core markets and
our long-term ambition is to double the business in the US
and triple the business in China versus 2019.
Pandora’s position in these two markets is very different,
and we have a tailored plan for each market.
To unlock our full potential in the US, we will fuel brand
momentum, enhance product offering, drive strategic
network expansion, and build out a superior omnichannel
journey and fulfilment through a more cohesive presence. We
want to create longer-lasting relationships with both existing
and new customers, with particular focus on Generation Z.
Pandora is also investing in the product offering, optimising
assortment to be relevant to the US consumer. We are
expanding our store network in areas where our presence
and awareness are low. Lastly, advancing and enhancing our
new omnichannel features continues to be a priority in the US.
GROWING
STORY
ANNUAL REPORT 2021 STORY
office hires in 2021
top leaders enrolled
on our new Chief Talent
Officer Programme
700+
170
Leveraging synergies across a combined people and
sustainability agenda, our work is focused on five key areas,
underpinned by an advanced digital platform.
FIVE INTEGRATED PEOPLE AND
SUSTAINABILITY PRIORITIES
Innovative & agile
organisation
World-class
talent
Healthy
performance
culture
Empowering &
transformational
leadership
Sustainability
leader
Digital platform
ANNUAL REPORT 2021 OUR BUSINESS
in employee
understanding of
new strategy
8/10
Employee Net
Promoter Score
38%
Leadership
Effectiveness Score
8/10
GLOBAL PEOPLE FOOTPRINT
JOB TYPE
45% Manufacturing
45% Retail
9% Office
1% Distribution
GENDER
76% Female
24% Male
TENURE
36% 0–1 yrs
13% 1–3 yrs
22% 3–5 yrs
29% +5 yrs
ANNUAL REPORT 2021 OUR BUSINESS
TOPIC TARGET PROGRESS TO DATE STATUS
Low-carbon business
Use 100% renewable energy at our crafting facilities. Achieved via the purchase of Renewable Energy
Certificates and onsite solar generation.
Achieved
Set a science-based 1.5°C aligned target to reduce carbon
emissions across our full value chain by 2021.
Target was approved by the Science Based
Targets initiative in 2021.
Achieved
Reduce our greenhouse gas emissions by 50% by 2030 from
a 2019 baseline (Scopes 1 , 2 and 3). To achieve this, we will:
• become carbon neutral in our own operations by 2025,
reducing emissions by at least 90% from a 2019 baseline
(Scopes 1 and 2). Carbon removal mechanisms and off-
sets will balance out any remaining emissions;
• reduce value chain emissions by 42% by 2030 from
a 2019 baseline (Scope 3).
In 2021, we continued to purchase Renewable
Energy Certificates, reducing the Scope 2 market-
based emissions of our crafting facilities and part of
our retail operations by 58% since our baseline year
of 2019.
Informed suppliers about upcoming Supplier
Engagement Programme on climate change.
On track
Achieve net zero emissions by 2040. Roadmap under development.
Target set
Circular innovation
Use only recycled silver and gold in our jewellery by 2025. In 2021, 54% of silver and gold in our products came
from recycled sources. Secured increased certified
volumes and began piloting a third-party audit
mechanism for end-to-end traceability.
On track
Inclusive, diverse and fair
Create an inclusive workplace and increase the share of
underrepresented groups by 2025.
Roadmap under development.
Target set
Achieve gender parity in leadership by 2030. Roadmap under development.
Target set
Reflect societal diversity in our market communications
by 2025.
Roadmap under development.
Target set
Top sustainability targets across Pandora’s strategic priorities
ANNUAL REPORT 2021 OUR BUSINESS
Scope 3
92%
26% 18% 12% 11% 7%7%9% 2%
GREENHOUSE GAS EMISSIONS %
1 % Scope 1
Emissions from refrigerants and fossil fuels
used at Pandora’s facilities.
7% Scope 2 (market-based)
Emissions from electricity and heating used
at Pandora’s facilities.
92% Scope 3
Emissions from other sources outside of
Pandora’s own operations:
26% Crafting materials
Raw materials such as gold, silver, cubic zirco-
nia, and other metal alloys as well as produc-
tion materials like gypsum and enamel.
18% Media & marketing
Media spend across all channels ranging
from TV campaigns to digital ads and email
marketing.
12% Other
Fuel- and energy-related activities, business
travel, employee commuting, water supply,
waste generated in operations, consultancy
services, and facilities management.
11% Transportation
Transportation and distribution of Pandora
jewellery, including inbound logistics, out-
bound logistics and third-party distribution.
9% Franchises
Pandora franchises, wholesalers, and other
points of sale which are not directly owned
by Pandora.
7% IT
Outsourcing services, hardware, telecom
data, and IT consultants.
7% Packaging & point-of-sale materials
Bags, boxes, printed materials, campaign
items, displays and trays, and other types of
packaging.
2% Capital goods
Various machines, crafting equipment and
furniture in stores.
Scope 2 (market-based)
7%
Scope 1
1%
ANNUAL REPORT 2021 OUR BUSINESS
of branding
content budget
spent with
producers owned
by women or
underrepresented
groups.
30%
EUR
950m
revolving credit
facility with borrow-
ing costs linked to
progress on becom-
ing carbon neutral in
own operations and
using only recycled
silver and gold by
2025.
ANNUAL REPORT 2021 OUR BUSINESS
MANAGING RISKS
Pandora carefully monitors and assesses potential risks to
the company on an ongoing basis.
Our approach to risk management
Pandora’s enterprise risk management is focused on identi-
fying risks early, assessing them candidly, and taking actions
to mitigate them so they will not prevent the company from
achieving its business objectives. We see a well-functioning
risk management process as key to maintaining and building
Pandora’s position as the world’s largest jewellery brand.
Pandora’s Chief Financial Officer heads up the company’s
Risk Management Board, which consists of senior manage-
ment representatives from across our value chain. All areas
of our business are required to report their most significant
risks to the Global Insurance & Risk Office, along with assess-
ments of those risks and an overview of implemented mitiga-
tions and next milestones. To read more about our enterprise
risk management efforts, please visit pandoragroup.com.
Our key risks
The Board of Directors reviews and discusses the key risks
that could threaten our business model or the future per-
formance, solvency or liquidity of Pandora. The key risks and
our responses to them are further described on the following
pages. The key risks do not represent all the risks associated
with our business. Other risks not presently identified or
those currently deemed to be less material may also have an
adverse effect on our business.
Facing up to environmental risks
It is widely acknowledged that climate change
and associated impacts, both social and environ-
mental, are some of the most pressing societal
issues of our time. We understand the need to
prepare for the risks that will arise from chang-
ing weather patterns, rising sea levels and other
climate impacts. We have taken initial steps and
will expand on these in the future.
As recommended by the Task Force on Climate-
related Financial Disclosures, we will conduct
a climate change scenario analysis in 2022 to
identify short-, medium- and long-term risks in
our production and supply chain so that we can
ensure a steady supply of our products.
AREA DESCRIPTION RISK MITIGATION
Brand and
product relevance
As a large, global brand, the strength and
integrity of our brand is a fundamental
asset. It is important that our product
oerings remain relevant to our customers.
A lack of brand or product relevance
constitutes a signicant business risk that
could result in lower trac to our stores and
online shopping sites and reduce revenue.
• Create consumer-centric innovation, fuelled by consumer insights and rigorous testing
• Build brand awareness through competitive media investments
• Strengthen capabilities within data analytics and technology
• Deliver 360 degree brand experience across all consumer touchpoints online and oine
• Continue monitoring trademarks and patents and ghting infringements.
Brand access
We sell our products globally and rely on a
strong channel network and solid insights
to engage with consumers in their
preferred marketplace. A personalised and
unique shopping experience is important
for developing customer loyalty.
Not being able to engage consumers and
provide them with a relevant omnichannel
shopping experience can result in a decline
in revenue.
• Engage store associates by redeveloping the selling ceremony and focusing on training
programmes
• Strengthen focus on personalisation of shopping experiences across channels
• Invest in improving digital and omnichannel customer experiences
• Continuously optimise the store network by relocating, opening and closing stores
• Develop and test new store concept.
ANNUAL REPORT 2021 OUR BUSINESS
AREA DESCRIPTION RISK MITIGATION
Pandemics, including
COVID-19
Continued COVID-19 outbreaks or new
pandemics may have an eect on the
economy in general, consumer behaviour
and demand. It may also require
signicant investments in and changes to
Pandora’s operating model etc.
Pandemics can result in both lower revenue
and higher costs through temporary store and
crafting facility closures, labour shortages,
decreases in productivity, supply chain
disruptions, and changes in the macroeco-
nomic environment and consumer behaviour.
• Planned investment in new factory in Vietnam, rst unit to be produced end 2024
• Expansion of online distribution capacity
• Increased inventories
• Making shopping safer for customers through initiatives such as curbside pickup, pop-up stores,
and Click & Collect
• Review of supply chain, including dependency on individual suppliers and own production facilities
and distribution centres
• Increased focus on business continuity plans.
Supply
disruptions
Pandora operates a fully integrated value
chain and most production is in-house.
Procurement of raw materials and the
ability to produce and distribute nished
products are critical for meeting
customer demand.
Lockdowns, breakdowns, political unrest, re,
natural catastrophes etc. at Pandora’s or key
suppliers’ sites may result in disruption of our
supply chain and have a signicant impact on
our nancial performance. Having crafting
facilities located exclusively in Thailand
elevates the risk of supply disruption.
• Dual sourcing where feasible
• Buers of production components and nished goods
• Crafting at two separate locations in Thailand
• Planned investment in additional production capacity at existing locations and an additional
crafting site in Vietnam
• Engagement of external manufacturers to provide exibility
• Ramped up B2B and B2C distribution capacity through additional warehouses.
IT security
breaches
Reliable IT systems and infrastructure are
critical to the company’s ability to operate
eectively. We also have a duty to
safeguard the data of our customers and
partners as well as our own data.
Breaches of IT security, caused by malware
attacks for example, could have a severe
impact on Pandora’s ability to maintain
operations for a period of time and, hence, its
nancial performance. The disclosure of
condential information could compromise
the privacy of customers or other individuals.
• Comprehensive cyber security programme to upgrade existing capabilities
• Ongoing security monitoring supported by incident-response teams
• Third-party vulnerability and security maturity assessments
• Cyber and information security awareness training and phishing tests to monitor response.
Breakdown
of IT systems
Operating a global company with a fully
integrated value chain is heavily depend-
ent on stable and ecient IT systems.
Pandora operates a number of legacy IT
systems, including ERP. Should Pandora fail or
otherwise be unable to upgrade its IT systems in
a timely, precise and ecient manner, this could
have a material negative eect on Pandora's
operations and nancial results. Further, a lack
of interoperability and an obsolescence of core
IT systems could have signicant consequences
in terms of operational eciency and business
continuity.
• Signicant investment in technology upgrades, including planned upgrade of ERP platform
• Cross-functional alignment and project groups to ensure timely implementation
of technology upgrades
• Ongoing standardisation and consolidation of IT systems across geographies
• Increased focus on business continuity plans.
ANNUAL REPORT 2021 OUR BUSINESS
AREA DESCRIPTION RISK MITIGATION
Talent attraction
and succession
Pandora needs highly talented and
capable people across all key functions
and markets to drive growth and
sustainable performance to deliver our
strategy.
Failure to attract, develop and retain the right
talent as well as maintaining a strong
succession pipeline for leadership and critical
roles could be a signicant risk to delivery on
our strategy.
• Frequent employee advocacy surveys to measure employee engagement and leadership
eectiveness
• Chief Talent Ocer Programme to get to know our talent, develop them for future roles and build
succession depth
• Enhanced focus on employer branding through targeted Employee Value Proposition for new hires
linked to our new corporate values
• Launch of new Inclusion & Diversity goals as part of our strategic priorities within sustainability.
Responsible business
behaviour
Pandora has a reputation for responsible
business behaviour. This reputation
benets the company in several ways,
from attracting new employees to
meeting consumer expectations.
If Pandora violates legislation, disregards
principles of good corporate citizenship or
fails to adhere to social or environmental
standards, it could damage our brand,
reputation and nancial position.
• Launch of a new Global Code of Conduct
• Mandatory ethics and compliance training
• Upgrading external access to our whistleblower hotline
• Responsible Supplier Programme, including training and vendor audits
• Recurring Responsible Jewellery Council certication
• Environmental, social and governance reporting to ensure transparency
• Renewed commitment to more ambitious climate targets and other focused sustainability initiatives
• Pandora’s tax strategy aims at paying fair taxes in all markets where Pandora operates.
Macroeconomic factors
As a global jewellery brand that relies
heavily on discretionary consumer
spending, Pandora is particularly exposed
to a weak macroeconomic environment
and general changes in consumer
behaviour.
Adverse macroeconomic conditions and
general changes in consumer behaviour may
result in lower demand for our products,
impacting our revenue and earnings.
• Continuous monitoring of the macroeconomic landscape
• Continuous monitoring of consumer behaviour and trends
• Pursue exibility in cost base, including frequent break options in store leases
• Continued pursuit of cost savings
• Geographical diversication of revenue streams
• Introduction of buy now, pay later payment models.
Market
uctuations
Our products are made of precious
metals, mainly silver and gold. As a global
business, Pandora has signicant revenue
in USD, USD-related currencies and GBP.
Our crafting facilities are based in Thailand
and consequently we have signicant net
cost in THB.
Pandora is exposed to a weakening of the USD,
USD-related currencies and GBP and a
strengthening of the THB and precious metal
prices. Currency uctuations and increases in
the price of precious metals can have a
signicant impact on the company’s nancial
performance and cash ow.
• Hedging at least 50% of the combined annual commodity, exchange rate and interest rate risk.
However, at least 70% of the annual commodity exposure must be hedged
• Ongoing review of sales prices.
ANNUAL REPORT 2021 OUR BUSINESS
EXPERIENCE
We also offer Endless Aisle, where the sales assistant can find
the product online and have it shipped to the customer’s
home if not available in-store. In most markets, we also offer
other digital features that support an omnichannel experi-
ence, like Virtual Try-On.
Our physical store is the key touchpoint in the omnichannel
journey. We are testing a new store concept called Evoke, which
will provide a more convenient and personalised shopping
experience while providing a strong link to our online universe.
The opportunity to create unique, personalised jewellery with
engravings is now possible in many US stores and a few in Can-
ada, and we successfully tested online engraving in Italy.
Finally, our store staff play a key role in bringing personali-
sation to life. We are redesigning our customer experience
with an omnichannel mindset, and we are investing in training
and technology to empower sales associates to connect with
customers in increasingly personalised ways.
One of the pillars of our Phoenix strategy is personalisation:
to create a jewellery experience as unique as our customers.
Customers should have a seamless online and offline journey,
to easily discover, explore and purchase our products wherever
and whenever they want. During 2021, we had more than 670
million visits to our various channels, including 90 million visits
to concept stores.
“Customers today demand a personalised omnichannel
experience. They move fluidly across different channels and
might discover Pandora in a store in a mall, explore the brand
on Instagram, buy online and pick up in-store. That is why it is
important for us to be where the customer is, offering a true
omnichannel experience throughout the entire shopping jour-
ney,” says Chief Commercial Officer Martino Pessina.
In 2021, we advanced our personalisation goals with several
initiatives. Click & Collect is now available in the majority of our
owned concept stores in key markets, generating 6% of online
revenue in 2021.
A TRUE OMNICHANNEL
"It is important for us to be where the customer
is, oering a true omnichannel experience
throughout the entire shopping journey."
MARTINO PESSINA
Chief Commercial Ocer
STORY
ANNUAL REPORT 2021 STORY
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
See Pandora’s
Global Data
Ethics Policy
for 2021
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
The Board
and Executive
Management
assess risks
on an ongoing
basis.
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
Year of birth: 1964 Member since: 2019
Professional position:
Non-executive Board member.
Non-executive functions:
Chair of Ventotene Holding AS and member
of the Boards of Royal Unibrew A/S, Aspelin
Ramm Gruppen AS, AKA AS and Axfood AB.
Skills and experience:
Vast operational experience with strategy
execution and transformation as well as retail
and brand optimisation at executive level.
Furthermore, Peter A. Ruzicka contributes with
experience from other Board positions and
insight into capital markets.
Year of birth: 1951 Member since: 2010
Professional position:
Executive Chair of Axcel Management A/S.
Non-executive functions:
Chair of Aktive Ejere (Active Owners Denmark), EKF
Danmarks Eksportkredit (Denmark’s Export Credit
Agency) and Danmarks Skibskredit Holding A/S and
member of the Board of its subsidiary; Vice Chair of
PostNord and Axcel Advisory Board; member of the
Boards of Frigast A/S and Nissens A/S; adjunct profes-
sor at Copenhagen Business School.
Skills and experience:
Experience within areas such as general management,
capital markets, consumer sales and retail execution.
Year of birth: 1968 Member since: 2020
Professional position:
CEO of Brill Bakery Solutions LLC.
Non-executive functions:
Member of the Boards of Faerch Group, Salling
Group A/S, BioMar and AKK AB.
Skills and experience:
In-depth international insight into the consumer
market, experience advancing the social sustainabil-
ity agenda and her experience of the complete value
chain within large corporate multinationals.
Year of birth: 1977 Member since: 2020
Professional position:
Chief Brand Officer of Lacoste.
Non-executive functions:
None.
Skills and experience:
Experience within international brand strategy,
digital transformation and vast experience in
beauty and cosmetics, high-growth pureplay
digital environments and lifestyle apparel retail.
Year of birth: 1964 Member since: 2021
Professional position:
Non-executive Board member.
Non-executive functions:
Member of the Board of Ahold Delhaize N.V. and
Senior Advisor to a number of private equity firms.
Skills and experience:
International consumer market insight, extensive
experience advancing environmental
and social sustainability, and exposure to the full
value chain.
Year of birth: 1971 Member since: 2021
Professional position:
Chief Financial Officer of Carlsberg A/S.
Non-executive functions:
Member of the Boards of Novozymes A/S,
Carlsberg Integrated Information Technology
A/S, Carlsberg Shared Services Sp.z.o.o.,
Udviklingsselskabet Carlsberg Byen P/S, Carlsberg
Breweries A/S, Carlsberg Byen Komplementar
ApS, and Carlsberg Ejendomme Holding A/S.
Skills and experience:
Experience within areas such as international
financial and executive management from large
corporate multinationals.
Heine
Dalsgaard
Jan
Zijderveld
Christian Frigast
Deputy Chair
Catherine
Spindler
Marianne
Kirkegaard
BOARD OF
DIRECTORS
Year of birth: 1957 Member since: 2016
Professional position:
Non-executive Board member.
Non-executive functions:
Chair of Industrifonden and Min Doktor AB and
member of the Boards of Asker AB, Elekta AB, Enea
AB and LEO Pharma A/S.
Skills and experience:
Experience within areas such as consumer goods,
retail execution, IT, digital, financial insights and
capital markets.
Birgitta
Stymne Göransson
Peter A. Ruzicka
Chair
The Board members’ full CVs are available
at pandoragroup.com.
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
President & Chief Executive Officer (CEO)
Year of birth: 1965 Member since: 2019
Registered Executive Management.
Alexander Lacik has more than 25 years’ experience
from large global consumer goods companies. In addition,
Alexander is a Board member of Swedish Match. Before
joining Pandora, he was CEO of Britax Ltd., a British manu-
facturer of childcare products. He has also held CEO and
senior management positions at Kasthall Golv & Mattor,
Procter & Gamble and Reckitt Benckiser, where he held a
number of positions, including head of Reckitt Benckiser
North America. He has a Bachelor’s degree in Business
Administration from the University of Växjö, Sweden.
Executive Vice President & Chief Financial Officer (CFO)
Year of birth: 1970 Member since: 2018
Registered Executive Management.
Anders Boyer has more than 20 years’ experience in finance,
business management and turnarounds. Prior to joining
Pandora, Anders held positions as Chief Financial Officer at
Hempel and GN Store Nord, and Finance Director and subse-
quently Regional Director of ISS. Anders started his career at
A.P. Moller-Maersk, where he worked for ten years. He has an
MSc in Finance and Accounting from Copenhagen Business
School, Denmark.
Chief Commercial Officer
Member since: 2020
Chief Supply Officer
Member since: 2020
Chief Digital & Technology Officer
Member since: 2019
Chief HR Officer
Member since: 2019
Chief Product Officer
Member since: 2011
Stephen
Fairchild
Erik
Schmidt
Anders
Boyer
David
Walmsley
Martino
Pessina
Jeerasage
Puranasamriddhi
EXECUTIVE
LEADERSHIP TEAM
Chief Marketing Officer
Member since: 2020
Carla
Liuni
Alexander
Lacik
The Executive Leadership Team
members’ full CVs are available at
pandoragroup.com.
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
600
400
700
800
Jan Feb Mar May Jun Jul Aug Sep Oct Nov DecApr
1,000
900
500
SHAREHOLDER
INFORMATION
and preserve a stable financial structure based on a strong
balance sheet.
Pandora’s capital structure policy is to maintain NIBD to EBITDA
between 0.5 and 1.5. By the end of 2021, Pandora’s leverage ra-
tio was only 0.4x EBITDA and thereby slightly below the capital
structure policy range. During the last couple of years, Pandora
has successfully decreased net working capital by DKK 3 billion.
At the same time, capitalised lease liabilities have decreased
by more than DKK 1 billion. Combined, these two factors have
decreased leverage by around 0.5x. As cash distributions to
shareholders are limited to the amount of free reserves in the
Parent Company, the lower net working capital and lease liabil-
ities also currently impact the ability to reach the upper part
of the leverage range. As of 31 December 2021, free reserves in
the Parent Company amounted to DKK 7.5 billion.
Proposed distributions
Pandora continues to be highly cash generative and has
ample liquidity to continue cash distribution to shareholders.
For 2022, the Board proposes a dividend of DKK 16 per share
and a new share buyback of DKK 3.3 billion. The Board already
has the authority to initiate a share buyback at any point
in time.
Pandora shares have been listed on the Nasdaq OMX
Copenhagen stock exchange since 2010. Pandora is included
in the blue chip OMX C25 index and has around 36,000
registered shareholders.
In addition to being listed in Copenhagen, Pandora has a spon-
sored level 1 American Depository Receipt (ADR) programme.
The ADRs are traded in the US over-the-counter under the
symbol PANDY. Further information regarding the ADR
programme can be found at the Pandora Group website.
In 2021, the Pandora share price increased by 20% and ended
the year with a closing price of DKK 815. The total return to
shareholders was further fuelled by cash distributions in the
calendar year of DKK 4.8 billion. In 2021, the total shareholder
return was 22%.
The Pandora share’s liquidity remains strong with a free float
of 100% of total shares outstanding and around 119 million
shares traded in 2021. The trading volume averaged around
474,000 shares per day.
Capital structure and cash allocation
Pandora’s capital structure serves to ensure that the company
has sufficient financial flexibility to pursue its strategic goals
SHARE PRICE DEVELOPMENT
DKK
ANNUAL DISTRIBUTIONS
DKK billion
FY 2022
Proposed
FY 2021
Actual
FY 2020
Actual
FY 2019
Actual
FY 2018
Actual
Dividend (ordinary + interim) 16 15 08 18 19
Nominal dividend per share, DKK 160 150 90 180 180
Share buyback programme 37
1
33 22 40
Total cash return 53 48 08 40 59
1
Includes DKK 0.7 billion from already announced share buyback running until 4 February 2022 and DKK 3.0 billion of new share
buyback expected to be paid out in calendar year 2022.
total shareholder
return in 2021
22%
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
Financial
calendar 2022
09 Feb
Annual Report 2021
10 Mar
Annual General Meeting
04 May
Interim Report Q1 2022
16 Aug
Interim Report Q2 2022
08 Nov
Interim Report Q3 2022
Share information
Exchange Nasdaq
Copenhagen
Trading symbols PANDORA
Identication
number/ ISIN
DK0060252690
Number of
shares
100,000,000 of DKK 1,
each with one vote
Share classes 1
GICS 25203010
Sector Apparel,
Accessories & Luxury
Goods
Segment Large
ADR information
ADR trading
symbol
PANDY
Programme
type
Sponsored level 1
programme
(J.P. Morgan)
Ratio (ADR:ORD) 4 ADRs : 1 ordinary
share (4:1)
ADR ISIN US 698 341 2031
Review of 2021 share buyback and dividends
In 2021, Pandora paid out an extraordinary dividend of DKK
15 per share. The total amount paid was around DKK 1.5
billion. In addition, The Board of Directors initiated share
buyback programmes under which Pandora will buy back own
shares to a maximum consideration of up to DKK 4 billion by
4 February 2022. Pandora repurchased shares for a value of
DKK 3.3 billion in 2021.
Shareholders
As of 31 December 2021, Pandora had two major share-
holders. BlackRock has disclosed holding rights to shares
corresponding to 9.9% of the total outstanding voting rights
and voting rights attached to financial instruments of
2.7%, while Parvus has disclosed holding rights to shares
amounting to 5.1%.
As of 31 December 2021, the geographical split of institu-
tional investors was (% of share capital):
• UK 26%
• US 19%
• Denmark 11%.
As of 31 December 2021, Pandora’s Board of Directors and
Executive Management held a total of 82,380 and 266,748
Pandora shares respectively, corresponding to 0.35% of the
total share capital.
Investor Relations
The Executive Management is responsible for the existence
of an Investor Relations (IR) function, which is responsible for
ensuring compliance with Pandora’s Investor Relations Policy.
IR reports directly to the Chief Financial Officer.
The purpose of Pandora’s IR activities is to ensure that
relevant, accurate and timely information is made available
to the capital markets to serve as a basis for regular trading
and a fair pricing of the share. Prior to the announcement of
interim and annual reports, a four-week silent period is in
place. In addition, members of the Board of Directors and
Executive Management are only allowed to trade shares in
a four-week trading window following the announcement
of interim and annual reports. Pandora will ensure that the
company is perceived as visible, accessible, reliable and pro-
fessional by the capital markets and that Pandora is regarded
among the best relative to peers. This will be achieved by
complying with the rules and legislation for listed companies
on Nasdaq OMX as well as Pandora’s internal policies.
Company website
The Pandora Group website (pandoragroup.com )
provides comprehensive information about the company, its
activities, share performance and shareholders. Additionally,
all company announcements, including interim and annual
reports, as well as investor presentations, webcasts and
conference call transcripts are made available on the website
in due time. Furthermore, the website contains a constantly
updated financial and event calendar showing events and
actions related to investors.
A comprehensive list of the 23 analysts covering the
Pandora share is maintained, including names, institutions
and contact details.
Pandora will
ensure that
the company
is perceived
as visible,
accessible,
reliable and
professional.
ANNUAL REPORT 2021 CORPORATE GOVERNANCE
11.9
4.1
5.8
7.4
7.8
6.4
3.9
19.0
23.4
21.9
22.8
20.3
16.7
2008
1.7
0.6
3.5
1.4
6.7 6.7
2.4
2.1
1.5
9.0
2.7
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
5.9 5.8
6.7
22.8
GROUP PERFORMANCE
2021 was a record-breaking year for Pandora. Revenue was
at all-time high, and Pandora outperformed its guidance on
both organic growth and EBIT margin. 2021 was also the year
Pandora released its long-term growth strategy Phoenix,
charting a new chapter of sustainable growth for the
years ahead.
COVID-19 continued to impact the business in 2021, but in
spite of lockdowns and restrictions Pandora ended the year
with strong results. Organic growth was 23% compared to
2020 and 9% compared to 2019.
The high growth was supported by a continued strong brand
momentum, and investments in digital and commercial
initiatives during the last couple of years paid off. Pandora
continues to see strong traction on its personalised marketing
initiatives and omnichannel features such as Click & Collect.
Personalising the consumer journey is a key growth pillar in the
Phoenix strategy.
The year was furthermore marked by two developments in par-
ticular, which impacted performance in opposite directions:
On the one hand, the pandemic forced Pandora to tempo-
rarily close many of its stores, mostly in the first half of the
year. Around 30% of stores were closed in Q1 and around
15% were closed in Q2. The pandemic also had a significant
impact on store traffic in China, where footfall decreased
up to 70% compared to 2019. The negative impact in China
was visible throughout 2021, but especially prevalent in the
second half of the year.
On the other hand, Pandora was positively impacted by
unusually strong performance in the US. The market deliv-
ers strong growth throughout the year. While the growth
was partly fuelled by government stimulus packages, data
indicates that Pandora outperformed the market notably.
The US recorded 58% organic growth compared to 2020.
Record-breaking revenue in 2021
Pandora delivered a strong underlying performance in most of its
key markets, and - as mentioned above - not least in the strategi-
cally important US market. It is Pandora’s long-term ambition to
double US revenue compared to 2019.
THE JOURNEY OF PANDORA
DKK billion
Revenue
EBIT
2
1
Presented on the basis of the applicable accounting standards at the time.
2
2019 and 2020 gures exclude Programme NOW restructuring costs.
ANNUAL REPORT 2021 FINANCIAL REVIEW
STORE NETWORK
Number of points of sale 2021 2020 Growth
Concept stores 2619 2690 71
- of which Pandora owned 1423 1382 41
- of which franchise owned 700 797 97
- of which third-party distribution 496 511 15
Other points of sale 4154 4402 248
The UK, Pandora’s second largest market, also delivered solid
growth. The online store in particular performed strongly,
generating 53% share of revenue compared with 55% in 2020
and 25% in 2019.
Italy and Germany both delivered solid double digit organic
growth compared with 2020. The growth in both markets
was driven by continued strong demand for the Pandora
Moments platform. France was slightly down following
COVID-19 store closures and restrictions, but ended the
year with positive growth in Q4.
As expected, China was a drag on 2021 performance, but
remains a high priority for Pandora. It is Pandora’s long-
term ambition to triple the revenue in China compared
to 2019. The first steps in Pandora’s turnaround in China
were planned for the second half of 2021, but due to the
continued significant impact of COVID-19 in China, Pandora
postponed the investments to 2022.
Moments delivering solid results
Pandora’s Global Business Units, Moments and Collabs and
Style and Upstream Innovation, both delivered strong growth
in 2021 and generated sell-out growth of 20% and 19%,
respectively. The share of business for Moments and Collabs
was 71%, unchanged from 2020. Pandora is very pleased
with the development in both business units. Pandora’s first
priority is to continue to grow its Moments platform while
simultaneously investing in new designs and developing the
product offering. In 2021, Pandora test launched Pandora
Brilliance in the UK and relaunched Pandora ME. In 2022,
Pandora will do a sequential global roll-out of Brilliance,
and Pandora will also introduce a new collaboration.
REVENUE BY GLOBAL BUSINESS UNIT
DKK million 2021 2020 Sell-out growth
Growth in local
currency
Share of revenue
FY 2021
Share of revenue
FY 2020
Moments and Collabs 16610 13562 20% 23% 71% 71%
- Moments 14699 11660 22% 27% 63% 61%
- Collabs 1911 1902 3% 0% 8% 10%
Style and Upstream Innovation 6784 5447 19% 25% 29% 29%
- Timeless 4091 3318 19% 24% 17% 17%
- Signature 1990 1739 12% 14% 9% 9%
- Me 656 390 42% 67% 3% 2%
- Brilliance 48 na na 0%
Total revenue 23394 19009 20% 24% 100% 100%
REVENUE BY CHANNEL
DKK million 2021 2020
Organic
growth
Growth in local
currency
Share of revenue
FY 2021
Share of revenue
FY 2020
Pandora owned retail 15922 13426 16% 18% 68% 71%
- of which concept stores 9133 7321 20% 25% 39% 39%
- of which online stores 5977 5483 8% 8% 26% 29%
- of which other points of sale 812 622 30% 30% 3% 3%
Wholesale 6705 4949 41% 37% 29% 26%
- of which concept stores 3737 2714 47% 39% 16% 14%
- of which other points of sale 2968 2235 35% 35% 13% 12%
Third-party distribution 767 634 24% 24% 3% 3%
Total revenue 23394 19009 23% 24% 100% 100%
Store network development
In 2021, Pandora closed net 71 concept stores due to a general
pruning of the network. The closed stores were performing
unsatisfactorily, even before the lockdowns. Some store open-
ings were delayed or put on hold due to COVID-19, particularly
in Latin America and China. Pandora see ample opportunities
to grow the store network in the years to come. Pandora
expects to open net 50-100 concept stores in 2022.
ANNUAL REPORT 2021 FINANCIAL REVIEW
GROUP
PROFITABILITY
COST OF SALES AND GROSS PROFIT
DKK million 2021 2020 Growth
Share of
revenue 2021
Share of
revenue 2020
Revenue 23394 19009 23% 1000% 1000%
Cost of sales 5590 4475 25% 239% 235%
Gross prot excl. restructuring costs 17803 14534 22% 761% 765%
Restructuring costs 159 100% 08%
Gross prot incl. restructuring costs 17803 14375 24% 761% 756%
OPERATING EXPENSES
DKK million 2021 2020 Growth
Share of
revenue 2021
Share of
revenue 2020
Sales and distribution expenses 6352 6234 2% 272% 328%
Marketing expenses 3587 2717 32% 153% 143%
Administrative expenses 2026 1702 19% 87% 90%
Total operating expenses excl. restructuring costs 11965 10652 12% 511% 560%
Restructuring costs 1038 100% 55%
Total operating expenses incl. restructuring costs 11965 11691 2% 511% 615%
Operating prot (EBIT) 5839 2684 118% 250% 141%
Operating prot (EBIT) excl. restructuring costs 5839 3881 50% 250% 204%
Profitability continues to be strong
Pandora’s Global Business Unit Moments and Collabs gener-
ated a gross margin of 75.3% (2020: 76.1% excluding restruc-
turing costs) while Style and Upstream Innovation generated
a gross margin of 78.1% (2020: 77.4% excluding restructuring
costs). Overall, gross margin was slightly down compared to
2020 (-0.4pp excluding restructuring costs) mainly following
negative impacts from higher silver prices, but also various
COVID-19 precautionary measures impacting gross margin
negatively. Production in Thailand has been running through-
out the year despite severe COVID-19 outbreaks in Thailand.
OPEX excluding restructuring costs increased by 13% in
constant foreign exchange rates compared to 2020. The
increase is significantly lower than the growth in revenue and
mainly stems from higher marketing expenses, as Pandora
has continued to invest in the brand. Marketing expenses
increased by DKK 0.9 billion and ended at 15.3% of revenue
(up 1pp compared to 2020). In 2021, Pandora received DKK
152 million in government subsidies, impacting sales and
distribution expenses. The EBIT margin ended at 25.0%, up
4.6pp compared to 2020 (excluding restructuring costs),
equal to a 50% growth in absolute EBIT and a testimony to
the operating leverage in Pandora’s business model.
ANNUAL REPORT 2021 FINANCIAL REVIEW
NET WORKING CAPITAL
Share of preceeding 12 months' revenue 2021 2020 2019 2018 2017
Inventories 128% 103% 98% 138% 120%
Trade receivables 43% 46% 75% 72% 86%
Trade payables 140% 169% 142% 99% 74%
Other net working capital elements 82% 56% 45% 45% 43%
Total 50% 76% 13% 67% 88%
Solid capital position
Net working capital ended at a -5% of revenue in 2021, a very
strong level and a result of the many improvements Pandora
has carried out during the last couple of years. Through-
out 2021, Pandora has deliberately increased inventory by
around DKK 1 billion compared with 2020 to mitigate risk of
stock-outs and disruptions in the supply chain. Furthermore,
the lapse of Programme NOW restructuring costs in 2020
have decreased Trade payables. Free cash flow remained
strong and ended the year at DKK 5.1 billion despite
a DKK 1 billion inventory build-up.
In 2021, ROIC was 59% compared with 25% in 2020. This is
the highest ROIC since 2017 where it was 69%. The improved
underlying performance combined with the lapse of Pro-
gramme NOW one-off restructuring costs as well as lower
invested capital are all positively impacting ROIC. The high
ROIC is evidence of Pandora’s attractive business model.
Balance Sheet
Total non-current assets decreased to DKK 12.6 billion
at the end of 2021 (2020: DKK 13.0 billion), mainly due to
amortisation and depreciation.
BALANCE SHEET AND
CASH FLOW
Net interest-bearing debt amounted to DKK 2.9 billion
at the end of 2021 (2020: DKK 3.2 billion), corresponding
to a financial leverage of 0.4x (2020: 0.5x). The decrease
in net interest-bearing debt was driven by a strong cash
conversion, ending 2021 with a financial leverage slightly
below the capital structure policy range of NIBD to EBITDA
between 0.5 and 1.5x.
By the end of 2021, equity in Pandora amounted to
DKK 7.0 billion, compared to DKK 7.4 billion in 2020. The
decrease was primarily driven by payout of DKK 4.8 billion
to its shareholder through a combination
of extraordinary dividends and share buybacks,
partly offset by profit for the year. Pandora paid out
DKK 1.5 billion in extraordinary dividends in 2021 and
bought back own shares for a total of DKK 3.3 billion.
Read more about cash distribution in 2022 on page 42.
ANNUAL REPORT 2021 FINANCIAL REVIEW
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER
CONSOLIDATED INCOME STATEMENT
DKK million Notes 2021 2020
Revenue 21 23,394 19,009
Cost of sales 23 31 32 -5,590 -4,634
Gross prot 17,803 14,375
Sales, distribution and marketing expenses 23 31 32 -9,939 -9,155
Administrative expenses 23 31 32 -2,026 -2,536
Operating prot 21 5,839 2,684
Finance income 46 152 316
Finance costs 46 -613 -507
Prot before tax 5,378 2,494
Income tax expense 25 -1,218 -556
Net prot for the year 4,160 1,938
Earnings per share, basic (DKK) 42 42.1 20.0
Earnings per share, diluted (DKK) 42 41.7 19.9
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million Notes 2021 2020
Net prot for the year 4,160 1,938
Other comprehensive income:
Items that may be reclassied to prot/loss for the year
Exchange rate adjustments of investments in subsidiaries 370 -609
Commodity hedging instruments:
- Realised in net cost of sales -4 11
- Realised in net nancials -16 -31
- Realised in inventories -141 -234
- Fair value adjustments -219 490
Foreign exchange hedging instruments:
- Realised in net nancials 249 -49
- Fair value adjustments -287 21
Tax on other comprehensive income, income/expense 25 83 -13
Items that may be reclassied to prot/loss for the year, net of tax 36 -416
Items not to be reclassied to prot/loss for the year
Actuarial gain/loss on dened benet plans, net of tax 23 10 6
Items not to be reclassied to prot/loss for the year, net of tax 10 6
Other comprehensive income, net of tax 46 -410
Total comprehensive income for the year 4,206 1,528
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
ASSETS
DKK million Notes 2021 2020
Goodwill 4,418 4,247
Brand 1,057 1,057
Distribution 1,080 1,110
Other intangible assets 538 529
Total intangible assets 31 7,094 6,943
Property, plant and equipment 32 1,816 2,054
Right-of-use assets 33 2,532 3,007
Deferred tax assets 25 891 764
Other nancial assets 222 244
Total non-current assets 12,555 13,012
Inventories 35 2,991 1,949
Trade receivables 36 1,009 870
Right-of-return assets 38 70 62
Derivative nancial instruments 44 45 69 351
Income tax receivable 25 68 83
Other receivables 738 745
Cash 1,043 2,912
Total current assets 5,988 6,972
Total assets 18,542 19,984
EQUITY AND LIABILITIES
DKK million Notes 2021 2020
Share capital 41
Treasury shares 41 -3,416 -93
Reserves 795 750
Retained earnings 9,523 6,632
Total equity 7,001 7,389
Provisions 37 416 370
Loans and borrowings 43 44 2,765 2,066
Deferred tax liabilities 25 113 368
Total non-current liabilities 3,295 2,804
Provisions 37 26 29
Refund liabilities 38 724 654
Contract liabilities 38 163 82
Loans and borrowings 43 44 1,161 3,996
Derivative nancial instruments 44 45 209 119
Trade payables 39 44 3,267 3,211
Income tax payable 25 1,003 382
Other payables 44 1,694 1,317
Total current liabilities 8,246 9,790
Total liabilities 11,541 12,595
Total equity and liabilities 18,542 19,984
CONSOLIDATED BALANCE SHEET
AT DECEMBER
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
DKK million
Notes
Share
capital
Treasury
shares
Translation
reserve
Hedging
reserve
Dividend
proposed
Retained
earnings
Total
equity
2021
Equity at 1 January 100 -93 535 215 - 6,632 7,389
Net prot for the year - - - - - 4,160 4,160
Other comprehensive income, net of tax - - 370 -325 - 1 46
Total comprehensive income for the year - - 370 -325 - 4,161 4,206
Share-based payments 23 24 - 1 - - - 209 210
Purchase of treasury shares 41 - -3,325 - - - - -3,325
Dividend paid 42 - - - - -1,481 2 -1,479
Dividend proposed 42 - - - - 1,481 -1,481 -
Equity at 31 December 100 -3,416 905 -110 - 9,523 7,001
The Board of Directors will propose at the Annual General
Meeting that a dividend of DKK 16 per share, corresponding
to DKK 1.6 billion (2020: DKK 0 million), be distributed
for 2021.
In 2021, an extraordinary dividend of DKK 15 per share was
paid, corresponding to DKK 1.5 billion.
In 2021, Pandora initiated share buyback programmes,
which resulted in repurchases of 3,943,797 treasury shares,
corresponding to DKK 3.3 billion.
For further shareholder information on dividend payments,
see page 42.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER
2020
Equity at 1 January 100 -1,964 1,112 54 836 5,110 5,249
Net prot for the year - - - - - 1,938 1,938
Other comprehensive income, net of tax - - -577 161 - 6 -410
Total comprehensive income for the year - - -577 161 - 1,944 1,528
Share-based payments 23 24 - 14 - - - 76 90
Purchase of treasury shares 41 - -431 - - - - -431
Sale of treasury shares
1
41 - 2,288 - - - -509 1,779
Dividend paid 42 - - - - -836 11 -825
Dividend proposed 42 - - - - - - -
Equity at 31 December 100 -93 535 215 - 6,632 7,389
On 5 May 2020, Pandora initiated an accelerated bookbuild for the sale of 8 million treasury shares, which was completed on the same day, generating approximately DKK 1.8 billion in net proceeds.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
DKK million Notes 2021 2020
Operating prot 5,839 2,684
Depreciation and amortisation 1,999 2,315
Share-based payments 24 166 70
Change in inventories -799 -96
Change in receivables -77 869
Change in payables and other liabilities 327 724
Other non-cash adjustments 47 70 -155
Interest etc. received 3 3
Interest etc. paid -468 -247
Income tax paid 25 -832 -192
Cash ows from operating activities, net 6,228 5,975
Acquisition of subsidiaries and activities, net of cash acquired 34 -66 -12
Purchase of intangible assets -289 -130
Purchase of property, plant and equipment -296 -374
Change in other non-current assets 17 19
Proceeds from sale of property, plant and equipment 2 13
Cash ows from investing activities, net -631 -484
Acquisition of non-controlling interests - -42
Dividend paid 42 -1,479 -825
Purchase of treasury shares 41 -3,325 -431
Sale of treasury shares 41 - 1,778
Proceeds from loans and borrowings 43 1,315 5,861
Repayment of loans and borrowings 43 -3,004 -9,073
Repayment of lease commitments 43 -991 -839
Cash ows from nancing activities, net -7,484 -3,571
Net increase/decrease in cash -1,887 1,920
DKK million Notes 2021 2020
Cash at 1 January
1
Exchange gains/losses on cash 18 -62
Net increase/decrease in cash -1,887 1,920
Cash at 31 December
1
Cash ows from operating activities, net 6228 5975
- Interest etc. received 3 3
- Interest etc. paid 468 247
Cash ows from investing activities, net 631 484
- Acquisition of subsidiaries and activities, net of cash acquired 66 12
Free cash ow excl. lease payments 6128 5747
Free cash ow incl. lease payments 5137 4908
Unutilised committed credit facilities 44 6023 6998
1
Cash comprises cash at bank and in hand.
The above cannot be derived directly from the income statement and the balance sheet.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER
ACCOUNTING POLICIES
Cash flows from operating activities are presented using the
indirect method.
Cash flows in currencies other than the functional currency
are translated at the average exchange rates for the month
in question, unless these differ significantly from the rates at
the transaction dates.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Notes
The notes are grouped into five sections related to key
figures. The notes contain the relevant financial information
as well as a description of accounting policies applied for the
topics of the individual notes.
SECTION
BASIS OF PREPARATION
1.1 Principal accounting policies 56
1.2 New accounting policies and disclosures 57
1.3 Management’s judgements and
estimates under IFRS 58
SECTION
RESULTS FOR THE YEAR
2.1 Segment and revenue information 60
2.2 Government grants 62
2.3 Sta costs 63
2.4 Share-based payments 64
2.5 Taxation 66
SECTION
INVESTED CAPITAL AND
WORKING CAPITAL ITEMS
3.1 Intangible assets 71
3.2 Property, plant and equipment 74
3.3 Leases 75
3.4 Business combinations 77
3.5 Inventories 78
3.6 Trade receivables 78
3.7 Provisions 79
3.8 Contract assets and liabilities 79
3.9 Trade payables 80
SECTION
CAPITAL STRUCTURE AND
NET FINANCIALS
4.1 Share capital 82
4.2 Earnings per share and dividend 83
4.3 Net interest-bearing debt 84
4.4 Financial risks 85
4.5 Derivative nancial instruments 88
4.6 Net nancials 89
4.7 Other non-cash adjustments 89
SECTION
OTHER DISCLOSURES
5.1 Contingent liabilities 91
5.2 Related parties 91
5.3 Fees to independent auditor 91
5.4 Events occurring after
the reporting period 91
5.5 Companies in the Pandora Group 92
5.6 Financial denitions 93
CONTENTS
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
This section introduces Pandora’s accounting policies and
signicant accounting estimates.
A more detailed description of accounting policies and
signicant estimates related to specic reported amounts is
presented in the respective notes. The purpose is to provide
transparency on the disclosed amounts and to describe
the relevant accounting policy, signicant estimates and
numerical disclosure for each note.
BASIS OF
PREPARATION
SECTION
ANNUAL REPORT 2021 FINANCIAL STATEMENTS ANNUAL REPORT
Pandora A/S is a public limited company with its registered
office in Denmark.
The Annual Report for the period 1 January – 31 December
2021 comprises the consolidated financial statements of
Pandora A/S and its subsidiaries (the Group).
The Annual Report has been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted
by the EU and additional requirements of the Danish Financial
Statements Act.
The Annual Report has been prepared on a historical cost
basis, except for derivative financial instruments, which have
been measured at fair value.
The Annual Report is presented in Danish kroner (DKK) and all
amounts are in millions unless otherwise stated. Due to round-
ing, numbers presented throughout this report may not add
up precisely to the totals, and percentages may not precisely
reflect the absolute figures.
Apart from changes due to the implementation of new or
amended standards and interpretations as described in note
1.2 New accounting policies and disclosures , accounting
policies are unchanged from last year.
iXBRL reporting
Pandora A/S has filed the Annual Report in 2021 in the new
European Single Electronic Format (ESEF), XHTML format that
NOTE .
PRINCIPAL ACCOUNTING POLICIES
can be displayed in a standard browser. The primary state-
ments in the consolidated financial statements are tagged
using eXtensible Business Reporting Language (iXBRL), which
comply with the ESEF taxonomy included in the ESEF Regu-
lation. The Annual Report submitted to the Danish Financial
Supervisory Authority consists of the XHTML document to-
gether with certain technical files, all included in a file named
PAND-2021-12-31.zip.
Alternative performance measures
Pandora presents financial measures in the Annual Report
that are not defined according to IFRS. Pandora believes these
non-GAAP measures provide valuable information to investors
and Pandora’s management when evaluating performance.
Since other companies may calculate these differently from
Pandora, they may not be comparable to the measures used
by other companies. These financial measures should there-
fore not be considered to be a replacement for measures de-
fined under IFRS. For definitions of the performance measures
used by Pandora, see note 5.6 Financial definitions.
ACCOUNTING POLICIES
The overall accounting policies applied to the Annual
Report as a whole are described below. The accounting
policies related to specific line items are described in the
notes to which they relate.
The description of accounting policies in the notes forms
part of the overall description of Pandora’s accounting
policies.
Consolidated financial statements
The consolidated financial statements comprise the financial
statements of the Parent Company and its subsidiaries. Sub-
sidiaries are fully consoli dated from the date of acquisition,
being the date on which Pandora obtains control, until the date
that such control ceases. All intercompany balances, income
and expenses, unrealised gains and losses and dividends re-
sulting from intercompany transactions are eliminated in full.
Functional and presentation currency
The consolidated financial statements are presented in DKK,
which is also the functional currency of the Parent Company.
Each subsidiary determines its own functional currency, and
items recognised in the financial statements of each entity
are measured using that functional currency.
Transactions and balances
Transactions in foreign currencies are initially recognised in
the Group entities at their respective functional currency
rates prevailing at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rate of exchange
ruling at the reporting date. All adjustments are recognised
in the income statement.
Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are trans-
Notes
2.1 Segment and revenue
information
2.2 Government grants
2.3 Staff costs
2.4 Share-based
payments
2.5 Taxation
3.1 Intangible assets
3.2 Property, plant and
equipment
3.3 Leases
3.4 Business
combinations
3.5 Inventories
3.6 Trade receivables
3.7 Provisions
3.8 Contract assets and
liabilities
4.2 Earnings per share and
dividend
4.3 Net interest-
bearing debt
4.5 Derivative financial
instruments
4.6 Net financials
The Annual Report for the period 1 January – 31 December
2021 comprises the consolidated financial statements of
Pandora A/S and its subsidiaries (the Group) as well as separate
financial statements for the Parent Company, Pandora A/S.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
lated using the exchange rates at the date when the fair value
is determined.
Group companies with another functional currency
than DKK
The assets and liabilities of foreign subsidiaries are translat-
ed into DKK at the rate of exchange prevailing at the report-
ing date, and their income statements are translated at the
exchange rates prevailing at the dates of the transactions.
Exchange rate adjustments arising on translation are rec-
ognised in other comprehensive income. On disposal of a
foreign subsidiary, the component of other comprehensive
income relating to that particular foreign operation is rec-
ognised in the income statement.
Consolidated income statement
The consolidated income statement is presented based on
costs classified by function. Cost of sales comprises direct
and indirect expenses incurred to generate revenue for the
year, comprising raw materials, consumables, production staff,
depreciation, amortisation and impairment losses in respect
of production equipment.
Sales, distribution and marketing expenses comprise ex-
penses related to the distribution of goods sold and sales
campaigns, including packaging materials, brochures, wages
and salaries and other expenses related to sales and distribu-
NOTE .
PRINCIPAL ACCOUNTING POLICIES CONTINUED
NOTE .
NEW ACCOUNTING POLICIES
AND DISCLOSURES
Implementation of new or amended
standards and interpretations
Pandora has adopted all new or amended standards (IFRS)
and interpretations (IFRIC) as adopted by the EU and which
are effective for the financial year 1 January – 31 December
2021. The implementation of these new or amended stan-
dards and interpretations had no material impact on the
financial statements for the year apart from the amendment
in IFRS 16.
Amendment to IFRS 16 Leases
In March 2021, the IASB issued COVID-19-Related Rent
Concessions beyond 30 June 2021, an amendment to IFRS
16 Leases. The IASB extended the period of relief for leases
arising as a direct consequence of the COVID-19 pandemic
from 30 June 2021 to 30 June 2022.
As a practical expedient, a lessee may elect not to assess
whether a COVID-19 pandemic-related rent concession
from a lessor is a lease modification. A lessee that makes this
election accounts for any change in lease payments resulting
from the COVID-19 pandemic-related rent concession the
same way it would account for the change under IFRS 16 if
the change was not a lease modification. The extension of the
practical expedient applies only to rent concessions occur-
ring as a direct consequence of the COVID-19 pandemic and
only if all of the following conditions are met:
• the change in lease payments results in revised consider-
ation for the lease that is substantially the same as, or less
tion staff as well as depreciation, amortisation and impair-
ment losses in respect of distribution equipment.
Administrative expenses comprise expenses incurred in the
year to manage Pandora, including expenses related to admin-
istrative staff and depreciation, amortisation and impairment
losses in respect of assets used in the administration.
The allocation of amortisation and impairment losses from in-
tangible assets is presented in note 3.1 and the allocation
of depreciation and impairment losses from property, plant
and equipment in note 3.2.
Financial statements of the Parent Company
Under section 149 of the Danish Financial Statements Act,
these consolidated financial statements represent an ex-
tract of Pandora’s complete Annual Report. In order to focus
on the overall, consolidated results for Pandora, we publish
Group consolidated financial statements without the financial
statements of the Parent Company, Pandora A/S. The Annual
Report of the Parent Company is an integrated part of the full
Annual Report and available at cvr.dk following approval at the
Annual General Meeting.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
MANAGEMENT’S JUDGEMENTS AND ESTIMATES UNDER IFRS
SIGNIFICANT ACCOUNTING ESTIMATES
In preparing the consolidated financial statements, manage-
ment makes various accounting estimates and assumptions that
form the basis of the presentation, recognition and measure-
ment of Pandora’s assets and liabilities.
Determining the carrying amounts of some assets and liabil-
ities requires estimates and assumptions concerning future
events. Estimates and assumptions are based on historical
experience and other factors, which management assesses to
be reasonable, but which by their nature involve uncertainty
and unpredictability. These assumptions may have to be
revised, and unexpected events or circumstances may occur.
Pandora is subject to risks and uncertainties that may lead to
actual results differing from these estimates, both positively
and negatively.
Climate change
In preparing the Consolidated Financial Statements, manage-
ment has considered the impact of climate change, particularly
in the context of sustainability targets. These considerations did
not have a material impact on management’s judgements and
estimates, consistent with the assessment that climate change is
not expected to have a significant impact on the Group’s future
cash flow or going concern assessment.
In addition, consideration has been given to the potential
financial impacts of climate-related risks on the carrying value
of goodwill through qualitative review of the Group’s climate
change risk assessment. This review did not identify any material
reporting impacts.
COVID-19
COVID-19 continues to affect the global economy, and Pandora
continues to assess the value of intangible assets and property,
plant and equipment, and internal forecasts have considered
the ongoing impacts of the pandemic on income and expenses.
Changes in selling prices and direct costs are based on past
experience and management’s expectation of future changes in
the markets where the Group operates.
Specific risks for Pandora are discussed in the relevant sections
of the Management’s review and in the notes.
The areas that involve a high degree of judgement and estima-
tion and are material to the financial statements are described
in more detail in the related notes.
NOTE .
NEW ACCOUNTING POLICIES AND DISCLOSURES
CONTINUED
than, the consideration for the lease immediately
preceding the change;
• any reduction in lease payments affects only payments
originally due on or before 30 June 2022 (for example, a rent
concession would meet this condition if it results in
reduced lease payments before 30 June 2022 and increased
lease payments that extend beyond 30 June 2022);
• there is no substantive change to other terms and
conditions of the lease.
Pandora decided to apply the practical expedient issued by
IASB for all contracts with rent concessions occurring as a
direct consequence of COVID-19 and where it meets all
conditions of the practical expedient. The effect of the
amendment and its impact on financial statements are
presented in note 3.3 Leases.
Notes
2.1 Segment and revenue
information
2.5 Taxation
3.3 Leases
3.5 Inventories
3.8 Contract assets
and liabilities
5.1 Contingent
liabilities
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
This section comprises notes related to the results for the year,
including reporting segment disclosures, and provides additional
information related to two of Pandora’s performance measures:
revenue and EBIT.
A detailed description of the results for the year is given in the
Financial review section of the Management’s review.
RESULTS FOR
THE YEAR
SECTION
Net prot
DKK million
2020: 1,938
4,160
Eective tax rate
2020: 22.3%
22.6%
EBIT margin
2020: 20.4% excl.
restructuring costs
25.0%
Revenue
DKK million
2020: 19,009
23,394
ANNUAL REPORT 2021 FINANCIAL STATEMENTS ANNUAL REPORT
NOTE .
SEGMENT AND REVENUE INFORMATION
Pandora’s activities are segmented into two reportable seg-
ments (Global Business Units), each responsible for the end-
to-end performance of products. One Global Business Unit is
responsible for Moments and Collabs, while the other drives
the newer collections and innovations.
The two operating segments include all channels relating to
the distribution and sale of Pandora products.
Management monitors the profitability of operating seg-
ments separately for the purpose of making decisions about
resource allocation and performance management. Segment
results are measured as gross profit.
As Programme NOW restructuring costs for 2020 cannot be
meaningfully allocated to segments, segment performance
for 2020 was measured and reported excluding restructuring
costs. Segment information is recognised and measured in
accordance with IFRS.
INCOME STATEMENT BY GLOBAL BUSINESS UNIT
DKK million
Moments
and Collabs
Style and
Upstream Innovation Group
2021
Revenue 16610 6784 23394
Cost of sales 4106 1485 5590
Gross prot 12504 5300 17803
Operating expenses 11965
Consolidated operating prot (EBIT) 5839
Prot margin (EBIT margin) 250%
2020
Revenue 13562 5447 19009
Cost of sales 3359 1275 4634
Gross prot 10204 4172 14375
Operating expenses 11691
Consolidated operating prot (EBIT) 2684
Prot margin (EBIT margin) 141%
Restructuring costs 1197
Prot margin (EBIT margin) excl. restructuring costs 204%
1
The ‘Garden’ collection was reallocated from Style and Upstream Innovation to Moments and Collabs in Q2 2021. Comparative
gures for 2020 were restated accordingly.
2
Programme NOW was completed in 2020, thus no restructuring cost was recorded in 2021. Restructuring costs in 2020 amounted
to DKK 1.2 billion, comprising mainly cost of sales (DKK 0.2 billion, primarily related to optimisation in production) and operating
expenses (DKK 1.0 billion, primarily related to organisational restructuring, IT transformation and consultancy expenses).
Restructuring costs impacted marketing expenses by DKK 0.1 billion, sales and distribution expenses by DKK 0.1 billion and
administrative expenses by DKK 0.8 billion.
REVENUE BY GLOBAL BUSINESS UNIT
DKK million 2021 2020
Moments and Collabs 16610 13562
- Moments 14699 11660
- Collabs 1911 1902
Style and Upstream Innovation 6784 5447
- Timeless 4091 3318
- Signature 1990 1739
- Me 656 390
- Brilliance 48
Total revenue 23394 19009
Goods transferred at a point in time 23321 18939
Services transferred over time 73 70
Total revenue 23394 19009
The use of sales channels for the distribution of Pandora
jewellery depends on the underlying market maturity and
varies within markets but is consistent when viewed between
segments.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
GEOGRAPHIC INFORMATION, REVENUE
DKK million 2021 2020
UK 3314 2960
Italy 2443 2021
France 1122 1154
Germany 1191 1014
Denmark 32 30
US 7026 4505
Australia 1131 1120
China 1126 1261
Other 6009 4943
Total revenue 23394 19009
GEOGRAPHIC INFORMATION, ASSETS
DKK million 2021 2020
Germany 602 645
Denmark 1983 1952
US 1754 1701
Australia 453 443
Thailand 516 535
Other 1785 1669
Total intangible assets
1
7,094 6,943
Property, plant and equipment
2
1816 2054
Right-of-use assets
3
2532 3007
Deferred tax assets 891 764
Other non-current nancial assets 222 244
Current assets 5988 6972
Total consolidated assets 18542 19984
1
The allocation of intangible assets in the table above reects the country in which the assets were acquired, including goodwill,
in the functional currency in which it is denominated. This is dierent from the presentation in note 3.1 Intangible assets, where
goodwill is allocated in accordance with management reporting and monitoring.
2
The crafting facilities in Thailand accounted for DKK 1,025 million (2020: DKK 1,130 million), corresponding to 56.4% of property,
plant and equipment (2020: 55.0%).
3
Right-of-use assets mainly relate to stores and oces.
REVENUE BY SALES CHANNEL
DKK million 2021 2020
Pandora physical stores 9945 7943
Pandora online stores 5977 5483
Wholesale and third-party distribution 7472 5583
Total revenue 23394 19009
NOTE .
SEGMENT AND REVENUE INFORMATION CONTINUED
SIGNIFICANT ACCOUNTING ESTIMATES
Recognition and measurement of revenue is based on estimates and judgements relating to
expected sales returns allowed to customers in most countries. These judgements can have a
material impact on the timing and measurement of recognised revenue as well as the level of the
refund liability. Reductions in revenue from expected sales returns is calculated based on histori-
cal return patterns and on a case-by-case basis for commercial reasons.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
SEGMENT AND REVENUE INFORMATION CONTINUED
ACCOUNTING POLICIES
Retail sales – products
Revenue from the sale of products through Pandora
owned and operated stores is recognised when a
store sells a product to the customer. Payment is
usually due when the customer picks up the prod-
uct in the store or the product is delivered from an
online store. However, in some instances collection
is delayed and a receivable recognised, see note 3.6
Trade receivables.
A refund liability and a right-of-return asset are recog-
nised for products expected to be returned, see
note
3.8 Contract assets and liabilities.
The estimate for
returned products is based on historical experience
and expectations. Based on knowledge of the nature
of returns, it is considered highly probable that a
significant reversal of cumulative revenue recognised
will not occur. Rebates and discounts granted to cus-
tomers are recognised as a reduction in revenue.
The Group’s obligation to repair or replace faulty
products is part of the standard terms and is there-
fore recognised as a contract liability, see note 3.8
Contract assets and liabilities. Revenue is further
measured excluding sales taxes and duties when
these are passed on to customers. Sales taxes and
duties incurred on sales that are not recoverable
from the local taxation authorities are reported
gross as part of revenue and cost of sales.
Wholesale and third-party distributors – products
Pandora manufactures and sells jewellery to
wholesalers and third-party distributors. Revenue is
recognised when control of the products has been
transferred to the wholesaler or third-party distrib-
utor. Change of control of the products occurs when
the products have been delivered to the wholesaler
or distributor and no further obligation exists that
can affect the transfer of control. Delivery has taken
place when the products have been shipped to
the location of the wholesaler or distributor and
control of the goods has been transferred to the
buyer. Revenue from the sale is recognised based
on the price specified in the contract. Revenue is
only recognised to the extent it is highly probable
that a significant reversal will not occur. A refund
liability and a right-of-return asset are recognised
for products expected to be returned, see
note 3.8
Contract assets and liabilities.
The estimate for
returned products is based on historical experience
and expectations. Based on knowledge of the nature
of returns in the wholesale and distributor channels,
it is considered highly probable that a significant
reversal of cumulative revenue recognised will not
occur. Provisions for rebates and discounts granted
to wholesalers and franchisees are recognised as a
reduction in revenue.
The Group’s obligation to repair or replace faulty
products is recognised on a gross basis in the
income statement as both a reduction in revenue
and a decrease in cost of goods sold. This is due
to the handling of warranty claims, which leads to
replacements instead of repairs. Revenue is further
measured excluding sales taxes and duties when
these are passed on to customers. Sales taxes and
duties incurred on sales that are not recoverable
from the local taxation authorities are reported
gross as part of revenue and cost of sales.
When control has been transferred, a receivable is
recognised as the consideration to be paid is condi-
tional only on the passage of time. The price speci-
fied in the contract is not adjusted for any financing
element as payment terms never exceed 12 months.
Pandora received government subsidies of DKK 152 million
(2020: DKK 225 million) as a result of the COVID-19 pan-
demic for operations mainly in Europe. The majority of the
subsidies were related to employee retention and facility
cost and included the government programmes “Coronavirus
Job Retention Scheme” and “Business Rates Relief” in the UK,
“Unemployment Benefits” and “Tax Credit Rental” in Italy,
and “Short-Time Work Subsidy” in Germany. There are no
unfulfilled conditions or other contingencies attached to the
subsidies recognised. During the pandemic, Pandora has re-
tained all staff, including store staff while stores were closed.
The government subsidies partially fund the associated cost,
and relate mainly to sales and distribution.
NOTE .
GOVERNMENT GRANTS
ACCOUNTING POLICIES
Government grants are recognised where there is rea-
sonable assurance that the grant will be received and all
attached conditions complied with.
Income from government subsidies as a result of the
COVID-19 pandemic has been recognised as a deduc-
tion in the expense item the subsidies are intended to
compensate.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
The Group’s pension plans are primarily defined contribution plans. Pandora has defined
benefit plans relating to employees in Thailand. The defined benefit plans are recognised at
the present value of the actuarially measured obligations. In 2021, these obligations amounted
to DKK 81 million (2020: DKK 74 million).
In 2021, the actuarial gain was DKK 10 million (2020: gain of DKK 6 million) recognised in other
comprehensive income.
DKK million 2021 2020
Total remuneration to
Board of Directors
76 78
Board members receive a fixed travel fee when attending
Board meetings abroad. Total travel fee for 2021 amounted
to DKK 0.4 million (2020: DKK 1.0 million).
For further details, see the Remuneration Report
available at pandoragroup.com.
NOTE .
STAFF COSTS
DKK million 2021 2020
Wages and salaries 4041 3581
Pensions 177 178
Share-based payments 166 70
Social security costs 256 177
Other sta costs 395 472
Total sta costs 5034 4478
Sta costs have been recognised in the consolidated income statement:
Cost of sales 1063 913
Sales, distribution and marketing expenses 3010 2572
Administrative expenses 961 993
Total sta costs 5034 4478
Average number of full-time employees during the year 22,441 22,336
DKK million Base pay Bonus Shares Benets Other Total
Total remuneration to Executive Management 162 166 266 24 619
Total remuneration to Executive Management 140 157 131 17 445
ACCOUNTING POLICIES
Wages and salaries, social security contributions, leave and
sick leave, bonuses and non-monetary benefits are recog-
nised in the financial year in which services are rendered
by employees of Pandora. Whenever Pandora provides
long-term employee benefits, the costs are accrued to
match the rendering of the services by the employees.
Termination benefits are recognised at the time an agree-
ment between Pandora and the employee is made and no
future service is rendered by the employee in exchange
for the benefits.
The 2020 remuneration includes DKK 1.2 million cost of bonus and DKK 1.0 million cost of shares related to the former
Executive Management.
The 2021 remuneration includes DKK 1.2 million cost of shares related to the former Executive Management.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Decisions to grant share-based incentive programmes are
made by the Board of Directors in accordance with general
guidelines on incentive pay for Pandora.
The total cost related to share-based payments was DKK 166
million (2020: net cost of DKK 70 million). The programmes
for 2021 and for 2020 were recorded at the maximum level
as the maximum performance is expected to be met. The
cost of share-based payments is included in staff costs. In
the remaining vesting periods, an amount of DKK 174 mil-
lion (2020: DKK 95 million) is expected to be recognised in
respect of the current programmes. The weighted average
remaining contractual life of the shares at the end of the
period was 1.5 years (2020: 2.9 years).
For shares exercised in 2021, the average share price at the
time of exercise was DKK 637.
Long-term incentive programmes
Pandora is launching annual incentive programmes targeting
Executive Management and other employees. The calculat-
ed value of each programme is recognised over the vesting
period (three years) based on the likelihood that programme
targets will be met. For Executive Management, a further
two-year holding period applies.
NOTE .
SHAREBASED PAYMENTS
SHARES OUTSTANDING
Executive
Management
Other
employees
Total
Average exercise price
per performance share, DKK
Shares outstanding at 1 January 229018 707613 936631 11
Shares granted during the year 50288 205415 255703
Shares exercised during the year 4754 4754
Shares lapsed during the year 38676 38676 08
Shares outstanding at 31 December 279306 869598 1148904 09
Shares outstanding at 1 January 188413 502386 690799 42
Shares granted during the year 115491 446854 562345
Shares exercised during the year 32061 19079 51140 41
Shares lapsed during the year 42825 222548 265373 62
Shares outstanding at 31 December 229018 707613 936631 11
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
SHAREBASED PAYMENTS CONTINUED
NUMBER OF SHARES IN PANDORA A/S
Expiry
date
Exercise
price, DKK
Shares
31 December
2021
Expected
volatility
Risk-free
interest rate
Maximum market
value at launch
(DKK million)
Accumulated cost
recognised
(DKK million)
Remaining value
to be expensed
(DKK million)
Programme start date
November 2018
1,2
2023 265 7865 43% 01% 2 2
March 2019
1,3
2022 265 249135 43% 06% 93 57
March 2019
1,2
2024 265 105662 43% 05% 27 16
July 2020 2023 000 419864 42% 06% 152 104 45
July 2020 2025 000 115491 42% 06% 36 25 10
April 2021 2024 000 200599 50% 05% 154 53 102
April 2021 2026 000 50288 50% 05% 26 9 17
Total number of shares outstanding 1148904 490 265 174
1
Although technically structured as options for legacy Danish tax treatment reasons, the awards have the characteristics of Performance Share Units because the option exercise price is 1% of the share price.
2
Programme related to Executive Management.
3
Programme related to other employees.
Assumptions
The volatility of the shares is based on the historical volatility
of the price of Pandora A/S shares. The risk-free interest rate
is based on a Danish government bond with similar maturity.
The dividend yield applied is equal to 2.2% for the 2021 pro-
gramme and is based on the assumed future dividend over
the vesting period and the share price on the date of the
grant. Actual paid dividends may differ from the assumptions
applied in the valuation of the market value. Given that the
exercise price for one performance share equals up to 1% of
the market price of one share at grant date, the fair value al-
most equals the market value of one share at grant date. The
assumptions in the table therefore have very limited impact
on the estimated fair value of the shares granted.
ACCOUNTING POLICIES
Selected Pandora employees receive remuneration in the form
of share-based payment transactions, whereby programme
participants render services as consideration for equity instru-
ments (“equity-settled transactions”).
Equity-settled transactions
The cost of equity-settled transactions with employees is
measured by reference to the fair value at the grant date. The
calculated fair values are based on either the Black-Scholes
model or the Monte Carlo model according to the performance
conditions of each programme. The cost of equity-settled
transactions is recognised as staff costs together with a
corresponding increase in equity over the period in which the
performance and/or service conditions are fulfilled.
The cumulative expense recognised for equity-settled transac-
tions at each reporting date until the vesting date reflects the
extent to which the vesting period has expired and manage-
ment’s best estimate of the number of equity instruments that
will ultimately vest. The income statement expense or income
for a period represents the movement in cumulative expenses
recognised at the beginning and end of that period.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
INCOME TAX EXPENSE
DKK million 2021 2020
Current income tax charge for the year 1500 604
Change in deferred tax for the year 201 66
Impact of change in tax rates 1 2
Adjustment to current tax for prior years 42 52
Adjustment to deferred tax for prior years 40 68
Total income tax expense 1218 556
Deferred tax on other comprehensive income 92 45
Income tax on other comprehensive income 9 32
Total tax on other comprehensive income 83 13
Income taxes
Income tax expense
Income tax expense was DKK 1,218 million in 2021,
corresponding to an effective tax rate of 22.6% (2020: DKK
556 million, 22.3%) for the Group. The tax rate of 22.6% was
negatively impacted by non-capitalised tax assets, paid
withholding taxes on dividend and other payments, and
non-deductible expenses from limitation in deduction for
marketing expenses in China and other expenses with no
tax deduction. The effective tax rate was reduced by
non-taxable income in Thailand as part of the investment
agreement with the Thai government, Board of Investment,
and further reduced by adjustments to tax for prior years.
The corporate income tax rate in Pandora’s key markets is
higher than the Danish tax rate of 22%, except for the UK
and Thailand.
RECONCILIATION OF EFFECTIVE
TAX RATE AND TAX
2021 2020
%
(DKK
million) %
(DKK
million)
Prot before tax 5378 2494
Corporate tax rate in Denmark, 22% 220% 1183 220% 549
Deviation in foreign subsidiaries’ tax rates
compared with the Danish rate 03% 17 02% 5
Deferred tax impact of change in tax rates 00% 1 01% 2
Non-deductible expenses 31% 166 27% 68
Tax incentives 29% 157 39% 98
Adjustment to tax for prior years 16% 82 07% 16
Non-capitalised tax assets, net 06% 30 01% 2
Withholding taxes/other taxes 11% 60 07% 17
Eective income tax rate/income tax expense 226% 1218 223% 556
NOTE .
TAXATION
SIGNIFICANT ACCOUNTING ESTIMATES
Pandora is subject to income tax in the countries in which
the Group operates, comprising various tax rates world-
wide. Significant judgements are required in determining
the accrual for income taxes, deferred tax assets and liabil-
ities, and provision for uncertain tax positions. Provision for
uncertain tax positions is measured according to IFRIC 23.
As part of Pandora conducting business globally, tax and
transfer pricing disputes with tax authorities may occur.
Any unresolved disputes with local tax authorities are
recognised as income tax payable/receivable based on the
expected value method or the most likely amount. Man-
agement believes that the provision made for uncertain tax
positions is adequate. However, the actual obligation may
deviate from this and is dependent on the result of litiga-
tions and settlements with the relevant tax authorities.
ACCOUNTING POLICIES
Income tax expense for the year comprises current tax
and changes in deferred tax, including changes in tax rate,
adjustment to prior years and changes in provision for
uncertain tax positions. Tax is recognised in the income
statement, except to the extent that it is related to items
recognised in equity or othercomprehensive income. The
tax rates and tax laws used to compute the amounts are
those enacted or substantively enacted, by the report-
ing date, in the countries in which Pandora operates and
generates taxable income.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
TAXATION CONTINUED
Deferred tax
At the end of 2021, deferred tax assets amounted to DKK
891 million (2020: DKK 764 million) and deferred tax liabilities
amounted to DKK 113 million (2020: DKK 368 million). Net
deferred tax assets amounted to DKK 778 million (2020:
DKK 396 million).
Of the total deferred tax assets recognised, DKK 23 million
(2020: DKK 14 million) related to tax loss carryforwards,
the utilisation of which depends on future positive taxable
income exceeding realised deferred tax liabilities. It is
management’s opinion that these tax loss carryforwards
can be utilised.
Tax assets not recognised were DKK 62 million (2020: DKK 33
million), of which DKK 36 million (2020: DKK 28 million) relate
to tax loss carryforwards that are not expected to be utilised
in the foreseeable future. Tax losses that can expire amount-
ed to DKK 18 million (2020: DKK 14 million).
No deferred tax has been recognised in respect of entities’
earnings that are intended for distribution in the short term,
as no material tax expense will be payable on distribution.
Only insignificant latent tax liabilities remained at 31 Decem-
ber 2021. These liabilities are not recognised as the Group is
able to control this liability and it is considered probable that
the liability will not crystallise in the foreseeable future.
DEFERRED TAX
DKK million 2021 2020
Deferred tax at 1 January 396 440
Exchange rate adjustments 6 15
Recognised in the income statement 241 2
Recognised in other comprehensive income 92 45
Recognised in equity, share-based payments 44 20
Impact of change in tax rates 1 2
Deferred tax at 31 December 778 396
Deferred tax assets 891 764
Deferred tax liabilities 113 368
Deferred tax, net 778 396
BREAKDOWN OF DEFERRED TAX
DKK million 2021 2020
Intangible assets 633 612
Property, plant and equipment 7 6
Right-of-use assets 16 11
Current assets 999 792
Non-current assets and liabilities 366 197
Tax loss carryforwards 23 14
Deferred tax, net 778 396
ACCOUNTING POLICIES
Deferred tax on all temporary differences between the
carrying amounts for financial reporting purposes and
the tax base of assets and liabilities is measured using
the balance sheet liability method. No deferred tax is
recognised on temporary differences that arise from the
initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the
time of the transaction, affects neither accounting profit
nor taxable profit or loss.
The recognition of deferred tax assets includes the
expected tax value of tax loss carryforwards to the extent
that these tax assets can be offset against positive taxable
income in the foreseeable future. The same applies to
deferred tax assets related to investments in subsidiaries.
Management has considered future taxable income and
applied judgements to determine whether deferred tax
assets should be recognised.
Deferred tax assets and liabilities are measured according
to current tax rules and at the tax rates expected to be
effective on elimination of the temporary differences.
Deferred tax assets and liabilities are offset if the Group
has a legally enforceable right to offset current tax assets
against current tax liabilities and the deferred tax relates
to the same taxable entity and the same tax authority.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
TAXATION CONTINUED
Our approach to taxes and taxes paid
Sustainability and responsible business practices have been
part of Pandora’s way of doing business since the very begin-
ning. Our sustainability strategy is reflected in our approach
to taxes and we aim to pay a fair tax in all markets where we
operate. Pandora is committed to ensure compliance with
the letter and spirit of tax law in the markets where we oper-
ate, while striving to maximise shareholder value in a respon-
sible way. The Group tax policy, which has been approved by
the Board of Directors of Pandora, is available at pandora-
group.com/investor/corporate-governance/tax-information
and includes more information on our approach to taxes.
Pandora A/S is the principal value driver and also assumes the
majority of business risks. Pandora allocates a profit margin,
based on benchmark studies, to all entities in the Group, and
the residual profit (or loss) in the value chain remains with
Pandora A/S. With a principal tax model, Pandora by nature
has a significant number of intercompany transactions. In-
tercompany transactions are based on arm’s length standard
and therefore priced on a basis consistent with the way unre-
lated parties would have priced such transactions. This im-
pacts the taxes we pay in the countries in which we do busi-
ness. Pandora understands the need for more transparency
by both taxpayers and tax administrations, and the need to
provide more clarity about Pandora’s position on tax. In doing
so we provide insight in accordance with the EU Directive
to be adopted, which introduces public country-by-country
reporting for our key markets. The full country-by-country
report for all markets is available at pandoragroup.com/in-
vestor/corporate-governance/tax-information.
In 2021, we paid corporate taxes in the amount of DKK 832
million (2020: DKK 192 million). The increased tax payments
mainly relate to Denmark and the US as the profit in these
markets has increased significantly and as last year was im-
pacted by tax refunds in both markets. The major part of the
taxes paid is attributable to Pandora’s key markets and most
of the tax payments relate to the current year.
COUNTRYBYCOUNTRY
OVERVIEW FOR KEY MARKETS
1
DKK million
Business
activities
Total revenue
incl. related
party
2
Third-party
revenue
in P&L
Prot
before tax
Tax
paid
Current income
tax charge
for the year
Employees
(FTE)
Accumulated
earnings
UK 3583 3314 198 10 42 887 172
Italy 2639 2443 108 14 32 758 93
France 1237 1122 64 22 44 509 119
Germany 1601 1191 88 14 26 908 99
Denmark 14729 32 6282 480 1011 823 11018
USA 14091 7026 348 153 148 1497 275
Australia 1370 1131 212 58 74 271 36
China 1140 1126 18 19 35 1228 46
Thailand 6010 918 20 28 11767 448
Rest of world 6394 6009 233 41 81 3793 1367
IFRS eliminations 604 3093 22 1293
Total Group 23394 5378 832 1500 22441 12378
1
The country-by country overview for key markets is based on IFRS principles.
2
Total revenue includes third-party revenue, related party revenue, other income and nancial income.
Headquarters Production DistributionWarehouse
CASH INCOME TAX PAID
DKK million 2021 2020
Income tax expense in income statement 1218 556
Tax on other comprehensive income 9 32
Adjustments regarding deferred taxes 240 4
Movement in income tax receivable/payable 635 328
Income tax paid in the year 832 192
- of which relates to prior years 9 81
- of which relates to current year 841 273
Income tax paid in the year 832 192
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
9
42
NOTE .
TAXATION CONTINUED
Paid income tax
Income tax paid reflects the cash tax payments made in the
year and relates to taxes on account for the current year as
well as payments regarding prior years. For the majority of
the countries, the final taxes are paid in the year following
the financial year, creating a timing difference in cash tax
payments.
At the beginning of the year, net income tax payable by
Pandora amounted to DKK 299 million. The net income
tax payable increased to DKK 934 million during the year,
as shown in the bridge “Movement in net tax payable”.
The increase reflects the higher profit before tax in 2021
compared to 2020, which is due for payment in 2022.
The difference between income tax expense in the income
statement and income tax paid is explained in the bridge
“From income tax expense to tax paid”. The income tax
expense in the income statement for 2021 has been calcu-
lated at DKK 1,218 million. The income tax expense includes
taxes on other income posted on equity and adjustments
to taxes for timing differences. Adding the tax payable from
2020 of DKK 299 million, we have a total tax payable of DKK
1,766 million. Of this amount DKK 934 million is due to be
paid in 2022 or later, and the remaining DKK 832 million
were settled as cash tax payments in 2021.
FROM INCOME TAX EXPENSE TO TAX PAID
DKK million
Income tax
expense in income
statement
Income tax on
comprehensive
income
Adjustments
regarding
deferred taxes
Net tax payable,
start of year
Net tax payable,
year-end
1,218 9
240
299 934
832
MOVEMENT IN NET TAX PAYABLE
DKK million
Net tax payable,
start of year
Current income
tax charge for
the year
Income tax on
comprehensive
income
Adjustments to
current tax in
prior years
Income tax paid
in the year as
reected in our
cash ow
Net tax payable,
year-end
299
1,500
832
934
Income tax paid in
the year as reected
in our cash ow
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
The notes in this section describe the assets that form the
basis for the activities of Pandora and the related liabilities.
Financial risks are described in note 4.4.
INVESTED CAPITAL
DKK million Notes 2021 2020
Intangible assets 31 7094 6943
Property, plant and equipment 32 1816 2054
Right-of-use assets 33 2532 3007
Other non-current nancial assets 222 244
Non-current provisions 37 416 370
Net working capital 1181 1447
Deferred tax, net 25 778 396
Currency derivatives, net 27 12
Income tax receivables/payable, net 935 299
Invested capital 9884 10540
WORKING CAPITAL
DKK million Notes 2021 2020
Inventories 35 2991 1949
Trade receivables 36 1009 870
Trade payables 39 3267 3211
Operating working capital 732 391
Other receivables 808 807
Current provisions 37 38 750 683
Commodity derivatives, net 113 221
Contract liabilities 163 82
Other payables 1694 1317
Net working capital 1181 1447
INVESTED CAPITAL
AND WORKING
CAPITAL ITEMS
SECTION
Invested capital
DKK million
2020: 10,540
Net working
capital/ revenue
2020: -7.6%
CAPEX
DKK million
2020: 491
9,884-5.0%641
ANNUAL REPORT 2021 FINANCIAL STATEMENTS ANNUAL REPORT
DKK million
Goodwill
Brand
Distri-
bution
Other
intangible
assets
Total
Cost at 1 January 4247 1057 1601 1747 8652
Acquisition of subsidiaries and activities 12 13 25
Additions 300 300
Disposals 6 6
Exchange rate adjustments 161 5 18 173
Cost at 31 December 4418 1057 1609 2059 9143
Amortisation and impairment losses at 1 January 491 1218 1708
Amortisation for the year 33 219 251
Impairment loss for the year 85 85
Disposals 5 5
Exchange rate adjustments 1 5 4 8
Amortisation and impairment losses at 31 December 1 528 1521 2049
Carrying amount at 31 December 4418 1057 1080 538 7094
The majority of the intangible assets have been acquired through business combinations.
The impairment loss of DKK 85 million relates to write-down of software applications. The loss is mainly recognised as sales, distribution and marketing
expenses in the income statement.
NOTE .
INTANGIBLE ASSETS
DKK million
Goodwill
Brand
Distri-
bution
Other
intangible
assets
Total
Cost at 1 January 4416 1057 1881 1705 9060
Acquisition of subsidiaries and activities 2 2
Additions 122 122
Disposals 274 17 291
Exchange rate adjustments 170 6 64 240
Cost at 31 December 4247 1057 1601 1747 8652
Amortisation and impairment losses at 1 January 741 874 1615
Amortisation for the year 30 296 326
Impairment loss for the year 82 82
Disposals 274 5 281
Exchange rate adjustments 6 28 33
Amortisation and impairment losses at 31 December 491 1218 1708
Carrying amount at 31 December 4247 1057 1110 529 6943
The impairment loss of DKK 82 million relates to scrapped software applications and design rights, the value in use of which has been estimated to be
lower than the carrying amount. The loss is mainly recognised as cost of sales in the income statement.
DKK million 2021 2020
Amortisation and impairment losses have been recognised in the income statement
as follows:
Cost of sales 46 105
Sales, distribution and marketing expenses 146 104
Administrative expenses 144 199
Total 337 408
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Goodwill
Additions in 2021 relate to acquisitions of activities.
Note 3.4 Business combinations includes an overview
of acquired goodwill for the year.
Brand
The ‘Pandora’ brand is the only brand of the Group that is
capitalised in the financial statements. It comprises a group
of complementary intangible assets relating to the brand,
domain name, products, image and customer experience
related to products sold under the Pandora brand. The brand
was acquired as part of the Pandora core business in 2008.
Distribution
Distribution includes distribution network and
distribution rights.
The distribution network covers Pandora’s relations with its
distributors. The main part of the distribution network was
acquired with the Pandora core business in 2008.
Distribution rights mainly relate to the distribution rights for
Pandora products in North America. These were acquired
with the American distributor in 2008 and the carrying
amount at 31 December 2021 was DKK 1,034 million (2020:
DKK 1,034 million).
Other intangible assets
Other intangible assets mainly comprise software.
NOTE .
INTANGIBLE ASSETS CONTINUED
ACCOUNTING POLICIES
All intangible assets are tested for impairment if there
is any indication of impairment. Intangible assets with
indefinite useful life are tested at least annually.
Goodwill
Goodwill is initially recognised at the amount by
which the purchase price for a business combination
exceeds the recognised value of the identifiable
assets and liabilities acquired. Goodwill comprises
future growth expectations, buyer-specific synergies,
the workforce in place and know-how. Subsequent
to initial recognition, goodwill is measured at cost
less accumulated impairment losses. Goodwill is not
amortised, but is tested for impairment annually or
if impairment indication arises. Impairment losses
charged in previous years cannot be reversed.
Brand
Brand is initially recognised at cost based on the “Relief
from Royalty” method, which is considered to have an
indefinite useful life and is impairment tested annually.
Distribution
The distribution network is initially recognised at fair val-
ue based on an estimation of the costs the entity avoids
by owning the intangible assets and therefore does not
need to rebuild the network (the cost approach).
The distribution network is amortised over an expect-
ed useful life of 15 years.
The distribution rights for Pandora products in the
North American market are measured based on a
residual model, since the distribution agreement
underlying the distribution rights is non- terminable.
Consequently, the distribution rights are considered
to have an indefinite usefullife.
Other acquired distribution rights are initially
recognised at cost based on the “Multi-period Excess
Earnings” model and amortised over their expected
useful lives.
Other intangible assets
Software is initially recognised at cost and amortised
over 2-5 years.
Amortisation is allocated to segments on a pro rata
basis based on the standard cost per segment.
Impairment
At each reporting date, Pandora assesses whether
there is any indication that an asset may be impaired.
If any such indication exists, or when annual impair-
ment testing of an asset is required, Pandora esti-
mates the recoverable amount of the asset.
The recoverable amount of an asset is the higher
of the fair value of the asset or cash-generating
unit (CGU) less costs to sell and its value in use. The
recoverable amount is determined for the smallest
group of assets that is independent from other assets
or groups of assets. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the
asset is written down to its recoverable amount.
In assessing the value in use, the estimated future
cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. In determining fair value less
costs to sell, an appropriate valuation model is used.
The most significant factors when assessing the po-
tential need for impairment are:
— decreasing revenue;
— decreasing brand value;
— changes to the product mix.
The indicators above should be viewed in the
context of Pandora’s relatively high margins and low
asset base.
The brand is applied and supported globally in all
of the Group’s entities. The brand is maintained and
preserved through common strategy and product
development at Group level and marketing in the indi-
vidual sales entities. The brand is consequently tested
for impairment at Group level.
Like the brand described above, goodwill is reported
and managed internally at Group level. Due to the con-
straint in IAS 36, goodwill is allocated to the grouped
CGUs in the two operating segments for impairment
testing purposes. It is management’s opinion that this
best reflects Pandora’s value creation.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
INTANGIBLE ASSETS CONTINUED
DISCOUNT RATES AND GROWTH RATES IN TERMINAL
PERIOD
Discount rate
before tax
Growth rate in
terminal period
Moments and Collabs 117% 2%
Style and Upstream Innovation 117% 2%
Group 117% 2%
Moments and Collabs 112% 2%
Style and Upstream Innovation 113% 2%
Group 113% 2%
DKK million Goodwill Brand Distribution
Moments and Collabs 3204 766 783
Style and Upstream Innovation 1214 291 298
Total 4418 1057 1080
Moments and Collabs 2981 742 779
Style and Upstream Innovation 1265 315 331
Total 4247 1057 1110
The ‘Garden’ collection was reallocated from Style and Upstream Innovation to Moments and Collabs in Q2 2021. Comparative
gures for 2020 were restated accordingly.
Assumptions
The calculations of the recoverable amounts of CGUs or
groups of CGUs are based on the following key assumptions.
Discount rates reflect the current market assessment of
the risks specific to each CGU or group of CGUs. The Group
discount rates have been estimated based on a weighted
average cost of capital for the industry. The rates have also
been adjusted to reflect the market assessment of any risk
specific to each group of CGUs.
The EBIT figures used in the impairment test are based on
the budget for next year, prepared and approved by manage-
ment, and a forecast for the two subsequent years.
The 2% growth rate applied is an estimate of the expected
average inflation in the terminal period. As such, no real
growth is applied to the terminal period when calculating the
recoverable amounts.
The EBIT margin in the budget of each group of CGUs is based
on historical experience and expectations concerning:
• revenue development taking into account development in
network (stores, retail/wholesale share), product mix and
market share as well as the COVID-19 impact on temporari-
ly closed stores and online revenue growth;
• cost of sales based on raw materials consumption affected
by mix of materials (stones, gold and silver), salaries and
average lagged hedge commodity prices at the time the
budget is prepared;
• development in operating expenses;
• currency rates are based on actual rates at the time the
budget is prepared.
Net working capital in the budget for next year, relative to the
revenue of each group of CGUs, is based on historical expe-
rience and is maintained for the remainder of the expected
useful economic lives. Net working capital thus increases on a
linear basis as the level of activity increases.
The impairment test of the brand at Group level is based on
the "Relief from Royalty" method.
The impairment tests did not identify any need for impair-
ment losses to be recognised. Based on sensitivity analysis,
it is management’s opinion that no probable change in any
key assumptions would cause the carrying amounts of Global
Business Units or at Group level to exceed the recoverable
amounts.
Even with a significant reduction in growth rate and an in-
crease in discount rate, management has not identified any
likely impairment.
Method for impairment testing
In the impairment test, the recoverable amount is compared with the carrying amount. The
recoverable amount is based on a calculation of the value in use using cash flow estimates based
on the budget for 2022 and a forecast for the two subsequent years. The long-term growth rate
in the terminal period has been set so that it equals the expected long-term rate of inflation.
ALLOCATION OF INTANGIBLE ASSETS TO CGUS
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
DKK million 2021 2020
Depreciation has been recognised in the income statement as follows:
Cost of sales 176 241
Sales, distribution and marketing expenses 364 416
Administrative expenses 42 42
Total 582 699
NOTE .
PROPERTY, PLANT AND EQUIPMENT
DKK million
Land and
buildings
Plant and
equipment
Assets under
construction
Total
Cost at 1 January 1238 3461 44 4742
Acquisition of subsidiaries and activities 11 11
Additions 11 129 199 339
Disposals 40 249 289
Transfers 14 150 164
Exchange rate adjustments 30 91 2 64
Cost at 31 December 1193 3582 91 4866
Depreciation and impairment losses at 1 January 323 2366 2689
Depreciation for the year 90 492 582
Disposals 38 242 280
Exchange rate adjustments 8 68 59
Depreciation and impairment losses at 31 December 366 2684 3050
Carrying amount at 31 December 827 898 91 1816
Cost at 1 January 1287 3591 33 4912
Acquisition of subsidiaries and activities
Additions 4 111 247 362
Disposals 34 146 180
Transfers 102 130 232
Exchange rate adjustments 121 225 5 351
Cost at 31 December 1238 3461 44 4742
Depreciation and impairment losses at 1 January 246 2081 2326
Depreciation for the year 136 563 699
Disposals 34 136 170
Exchange rate adjustments 25 142 167
Depreciation and impairment losses at 31 December 323 2366 2689
Carrying amount at 31 December 915 1095 44 2054
ACCOUNTING POLICIES
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumu-
lated impairment losses. Depreciation is calculated on a straight-line basis over the estimated
useful life according to the table below.
Asset Useful life
Land Indenite
Buildings 20-50 years
Leasehold improvements Lease term
Plant and equipment 3-5 years
Other xtures and ttings 3-5 years
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
LEASES
RIGHTOFUSE ASSETS
DKK million 2021 2020
Property 2507 2975
IT 3 5
Cars 14 18
Other 8 10
Total right-of-use assets 2532 3007
Assets and liabilities related to leases. Amounts recognised
in the balance sheet:
Pandora leases stores, various offices, office equipment and cars.
DKK million 2021 2020
Property
1
1066 1190
IT 1 1
Cars 9 11
Other 4 5
Total depreciation and impairment losses on right-of-use assets for the period 1081 1208
1
Including impairment losses of DKK 128 million in 2020 due to revaluation of right-of-use assets in connection with COVID-19.
LEASE LIABILITIES
DKK million 2021 2020
Non-current 1724 2066
Current 886 993
Total lease liabilities 2610 3059
Additions of right-of-use assets were DKK 690 million in 2021
(2020: DKK 817 million).
Amounts recognised in the income statement:
Costs recognised in the period for short-term and low-value leases were DKK 39 million
(2020: DKK 33 million). Expenses are recognised on a straight-line basis.
OTHER ITEMS RELATING TO LEASES
DKK million 2021 2020
Interest income from subleases 1
Interest expense 99 97
Total interest for the period 99 96
COVID-19-related rent concessions of DKK 56 million (2020:
DKK 112 million) were recognised within sales and distribution
expenses in the income statement in 2021. In addition, repay-
ment of certain fixed leases was negotiated and a cash settle-
ment was agreed with landlords and deferred with immaterial
effect (2020: DKK 52 million). Overall financing cash flow was
positively impacted by DKK 56 million (2020: DKK 164 million)
due to rent relief and rent deferrals.
Total cash outflow for the year relating to leases was DKK 1,377
million (2020: DKK 1,164 million), comprising of fixed lease
payments in scope of IFRS 16 of DKK 991 million (2020: DKK
839 million), variable lease payments of DKK 248 million (2020:
DKK 196 million), interest paid of DKK 99 million (2020: DKK 96
million), and short-term and low-value leases of DKK 39 million
(2020: DKK 33 million).
Many of the Group’s property leases contain variable payment
terms that are linked to the volume of sales made from leased
stores according to normal market practice. In 2021, around
18% (2020: 17%) of the lease payments recognised in the in-
come statement were variable rent. Pandora has estimated that
a 1% increase in annual physical store revenue would conse-
quently result in a 0.5% (2020: 0.7%) increase in lease payments.
The average standard store leases are three to five years with
a three to five-year option to extend in approximately 18%
(2020: 23%) of current leases, typically with one or more break
options. Approximately 27% of current leases are up for rene-
gotiation in 2022. The estimated value of lease extensions that
Pandora is not reasonably certain to exercise is around DKK 0.4
billion (2020: DKK 0.6 billion).
RECOGNISED DEPRECIATION AND IMPAIRMENT LOSSES ON RIGHTOFUSE ASSETS CHARGED TO
THE INCOME STATEMENT FOR THE PERIOD JANUARY DECEMBER:
Lease liabilities are recognised in loans and borrowings.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
LEASES CONTINUED
ACCOUNTING POLICIES
Pandora applies a single recognition and measure-
ment approach to all leases, except for short-term
leases and low-value leases.
Pandora recognises right-of-use assets at the
commencement date of the lease when the asset is
available for use. Right-of-use assets are measured at
cost, less any accumulated depreciation and impair-
ment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised,
initial direct costs incurred, lease payments made at
or before the commencement date, key money, less
any lease incentives received. Key money is meas-
ured at cost and amortised over the term of the
contract. Right-of-use assets are depreciated over
the shorter of the asset’s useful life and the lease
term on a straight-line basis. At each reporting date
Pandora assesses whether there is any indication
that a right-of-use asset may be impaired. If any such
indication exists, Pandora carries out impairment
testing for the relevant CGU.
Pandora recognises lease liabilities at the com-
mencement date of the lease, measured at the pres-
ent value of lease payments to be made over the
lease term. Lease payments include fixed payments
less any lease incentives receivable. Some leases
are exposed to potential future increases in variable
lease payments based on an index or rate, which
are not included in the lease liability until they take
effect. Payments relating to services are not included
in lease liabilities. Some property leases contain
variable payment terms that are linked to sales
generated from a store. Variable lease payments that
depend on sales are recognised in profit or loss in
the period in which the condition that triggers those
payments occurs and are not included in the lease
liability.
In calculating the present value of lease payments,
Pandora uses its incremental borrowing rate at the
lease commencement date because the interest
rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the
lease term or a change in the lease payments. Lease
payments are classified in financial activities in the
cash flow statement.
Pandora applies the short-term lease recognition
exemption to its short-term leases.
Payments related to short-term leases and leases
of low-value assets continue to be recognised on a
straight-line basis as an expense in the income state-
ment. Short-term leases are leases with a lease term
of 12 months or less. Low-value assets comprise
some IT equipment and other office equipment.
In March 2021, the IASB issued COVID-19-Related
Rent Concessions beyond 30 June 2021 - amend-
ment to IFRS 16 Leases. The IASB extended the
period of the relief for lessees arising as a direct
consequence of the COVID-19 pandemic from 30
June 2021 to 30 June 2022. As a practical expedient,
a lessee may elect not to assess whether a COVID-19
pandemic-related rent concession from a lessor
is a lease modification. A lessee that makes this
election accounts for any change in lease payments
resulting from the COVID-19 pandemic-related rent
concession the same way it would account for the
change under IFRS 16, if the change was not a lease
modification.
Pandora applied the extension of the practical expe-
dient to all contracts with rent concessions occurring
as direct consequence of COVID-19 and where they
meet all conditions of the practical expedient.
SIGNIFICANT ACCOUNTING ESTIMATES
When assessing the lifetime of leases, Pandora considers
the non-cancellable lease term and options to extend the
lease where Pandora is reasonably certain to extend. Leas-
es in Pandora mainly comprise stores, office buildings, cars,
IT and other office equipment. Most lease contracts for
stores average three to five years with a three to five-year
option to extend in approximately 18% of current leases,
typically with one or more break options. The lease term for
stores has been assessed to be up to ten years, depending
on location, revenue and earnings. For office buildings, the
lease term is usually five to fifteen years. For other assets,
the life is equal to the non-cancellable lease term, and
extensions are not considered for these.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
BUSINESS COMBINATIONS
The contributions to Group revenue and net prot from
acquisitions for the period 1 January - 31 December 2021
were DKK 307 million and DKK 93 million respectively.
On a pro forma basis, if the acquisitions had been eective
from 1 January 2021, the impact on Group revenue and net
prot for the period 1 January - 31 December 2021 would
have been approximately DKK 358 million and DKK 112
million respectively.
Acquisitions in 2020
No acquisitions, to an extent of significance to Pandora,
were completed during 2020.
Acquisitions after the reporting period
No acquisitions, to an extent of significance to Pandora,
took place after the reporting period.
ACCOUNTING POLICIES
Business combinations are accounted for in accord-
ance with the IFRS 3 acquisition method. The cost of an
acquisition is measured as the aggregate of the consider-
ation transferred, measured at acquisition date fair value,
and the amount of any non-controlling interests in the
acquiree.
For each business combination, the acquirer measures the
non-controlling interests in the acquiree either at fair val-
ue or at the proportionate share of the acquiree’s identi-
fiable net assets. Acquisition costs incurred are expensed.
Subsequent to initial recognition, goodwill is measured at
cost less any accumulated impairment losses.
As goodwill is reported and managed internally at Group
level, goodwill acquired should also be allocated to the
Group. However, goodwill acquired is allocated to the
grouped CGUs in the two operating segments for impair-
ment testing purposes due to the constraint in IAS 36.
If any part of the cost of an acquisition is contingent on
future events or performance, the cost is recognised at
fair value at the time of acquisition. Changes to the fair
value of the contingent payment are recognised in net
financials in the income statement.
Any changes to the fair value of obligations to acquire
non-controlling interests (put options) are recognised
directly in equity.
ACQUISITIONS
DKK million 2021 2020
Distribution rights 13
Property, plant and equipment and right-of-use assets 84 4
Inventories 34 4
Assets acquired 131 8
Non-current liabilities 50 2
Other current liabilities 27 1
Liabilities assumed 77 3
Total identiable net assets acquired 54 5
Goodwill arising on acquisitions 12 2
Purchase consideration 66 7
Cash movements on acquisitions:
Consideration transferred regarding previous years
5
Net cash ows on acquisitions 66 12
Acquisitions in 2021
In 2021, Pandora took over 29 concept stores in the US in two business combinations. Net
assets acquired mainly consist of store properties, inventories and related liabilities. The total
purchase price for the acquisitions was DKK 66 million. Based on the purchase price alloca-
tions, goodwill was DKK 12 million. Goodwill from the acquisitions is mainly related to the
synergies from converting the stores from wholesale to Pandora owned retail. Of the goodwill
acquired, DKK 12 million is deductible for income tax purposes.
Cost relating to the acquisitions was immaterial and is recognised as operating expenses in the
income statement.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
DKK million 2021 2020
Raw materials and consumables 779 358
Work in progress 148 119
Finished goods 1911 1392
Point-of-sale materials 153 80
Total inventories at 31 December 2991 1949
Inventory write-downs at 1 January 740 837
Write-downs during the year 154 361
Utilised in the year 129 458
Inventory write-downs at 31 December 765 740
Write-downs
Inventory write-downs primarily relate to finished goods and
are recognised in cost of sales, DKK 141 million (2020: DKK
312 million), and operating expenses, DKK 13 million (2020:
DKK 49 million). Write-downs include mainly the cost of
remelting obsolete jewellery.
Remelting of goods (realised and unrealised) negatively
impacted gross profit by DKK 103 million (2020: DKK 110
million).
Production overheads
Production overheads are calculated using a standard cost
method, which is reviewed regularly to ensure relevant
assumptions concerning capacity utilisation, lead times and
other relevant factors.
NOTE .
INVENTORIES
ACCOUNTING POLICIES
Inventories are valued at the lower of cost and net realis-
able value. Costs are accounted for on a first-in, first-out
basis (FIFO). Besides raw materials, costs include labour
and a proportion of production overheads based on nor-
mal operating capacity, but excluding borrowing costs.
Point-of-sale materials comprise purchase costs regarding
equipment, displays and packaging materials etc. and are
also accounted for on a FIFO basis.
SIGNIFICANT ACCOUNTING ESTIMATES
Estimates relating to write-downs are impacted by fore-
casting accuracy in the number of obsolete products that
will need to be remelted. The impact from remelt is also
influenced by fluctuations in the market prices of silver
and gold.
Net realisable value
Net realisable value is based on the estimated selling price
less estimated costs of completion and distribution. Alter-
natively, for inventories that are not expected to be sold, net
realisable value is based on the remelt value of the reusable
raw materials (primarily silver and gold).
DKK million 2021 2020
Receivables related to third-party distribution and wholesale 672 600
Receivables related to retail revenue sales 337 270
Total trade receivables at 31 December 1009 870
Ageing of trade receivables at 31 December
Not past due 850 746
Up to 30 days 159 124
Between 30 and 60 days
Between 60 and 90 days
Over 90 days
Total past due, not impaired 159 124
Total trade receivables at 31 December 1009 870
Development in impairment losses on trade receivables
Impairment at 1 January 121 129
Additions 12 53
Utilised 20 11
Unused amounts reversed 30 44
Exchange rate adjustments 3 5
Impairment at 31 December 86 121
NOTE .
TRADE RECEIVABLES
Trade receivables are amounts due from the sale of goods sold to wholesalers and distribu-
tors, or due from landlords, malls or e-commerce providers responsible for the collection of
cash on behalf of Pandora related to retail sales.
While realised losses are immaterial and remain low, Pandora continued to apply an increased
risk factor in light of COVID-19. The impairment on receivables decreased by DKK 35 million for
the year. Realised losses remained within the expected range.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Management continues to assess credit risks in order to
ensure credit risk never exceeds the recognised write-down
on trade receivables. For a further description of credit risk,
see note 4.4 Financial risks . Changes in impairment are
presented in the table on the previous page.
ACCOUNTING POLICIES
Trade receivables are initially recognised at the amount
of consideration that is unconditional unless they contain
significant financing components, and consequently rec-
ognised at fair value. The Group holds trade receivables
with the objective of collecting the contractual cash flows
and therefore measures them subsequently at amortised
cost using the effective interest method.
Pandora applies the simplified approach to measure
expected credit losses, using a lifetime expected loss
allowance.
NOTE .
PROVISIONS
DKK million 2021 2020
Provisions at 1 January 399 332
Additions in the year 127 142
Utilised in the year 11 26
Unused provisions reversed 77 33
Exchange rate adjustments 5 16
Provisions at 31 December 442 399
Provisions are recognised in the consolidated balance sheet
as follows:
Current 26 29
Non-current 416 370
Provisions at 31 December 442 399
Our provisions are liabilities of uncertain timing or amount and consist of defined benefit
pension plans of DKK 81 million (2020: DKK 74 million), obligations to restore leased property
of DKK 132 million (2020: DKK 124 million), and other legal and constructive obligations of DKK
203 million (2020: DKK 172 million). See note 5.1 Contingent liabilities for estimates relating
to litigation.
ACCOUNTING POLICIES
Provisions are recognised when Pandora has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources embodying economic ben-
efits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation. The expense relating to any provision is recognised in the income statement
net of any reimbursement.
NOTE .
TRADE RECEIVABLES CONTINUED
NOTE .
CONTRACT ASSETS AND
LIABILITIES
DKK million 2021 2020
Contract assets
Receivables from sale of products,
see note 3.6 1009 870
Right-of-return assets 70 62
Total contract assets 1078 932
Contract liabilities
Prepayments from customers 11 10
Coupons, gift cards etc. 92 72
Loyalty programme 60
Refund liabilities 724 654
Total contract liabilities 887 736
SIGNIFICANT ACCOUNTING ESTIMATES
In most countries, Pandora has provided return and war-
ranty rights to customers. The handling of warranty claims
leads to replacements instead of repairs. The recognised
refund liability relating to return and warranty rights is
assessed to a large extent on the basis of historical return
patterns.
In view of the low historical loss rates on receivables, ad-
justing these rates to reect current and forward-looking
information on macroeconomic factors such as GDP and
the unemployment rate that aects the ability of custom-
ers to settle receivables will not increase the risk of losses
signicantly.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
TRADE PAYABLES
ACCOUNTING POLICIES
Pandora recognises a refund and warranty liability related
to return rights provided to customers in most countries. A
corresponding right-of-return asset is also included as part
of contract assets. The value of the right-of-return asset is
determined by how many of the returned products are ex-
pected to be sold. Remaining products are written down to
remelt value together with returns covered by warranties.
The refund liability for estimated sales returns is recognised
when there is historical experience or when a reasonably
accurate estimate of expected future returns can other-
wise be made. The income effect recognised is the gross
margin of the expected returns and the potential effect of
writing down parts of the returned goods to remelt value.
Changes to the right-of-return asset and refund liability
are recognised gross in the income statement, i.e. as both
revenue and cost of sales.
Refund liability to cover warranty claims is based on ex-
pected replacements provided for products still covered
by warranty at the end of the period. The liability is recog-
nised gross in the income statement, as both a reduction
in revenue and in cost of goods sold. This is due to the
handling of warranty claims, which lead to replacements
instead of repairs.
As a common practice in Pandora, no costs to obtain
contracts with customers have been capitalised in 2021
or previous years.
DKK million Refund Warranty Total
Liability at 1 January 382 273 654
Performance obligations to which
consideration has been received 1238 218 1456
Revenue recognised, included in the contract liability 974 171 1145
Contract liabilities reversed 189 80 269
Exchange rate adjustments 21 6 27
Refund and warranty liability at 31 December 478 246 724
Liability at 1 January 428 325 753
Performance obligations to which
consideration has been received 936 281 1217
Revenue recognised, included in the contract liability 845 238 1084
Contract liabilities reversed 109 85 194
Exchange rate adjustments 27 10 38
Refund and warranty liability at 31 December 382 273 654
The Group generally accepts that vendors sell off their
receivables arising from the sale of goods and services
to the Group to a third party. Pandora has established a
supply chain financing programme where vendors can sell
off their receivables from Pandora on attractive terms,
based on invoices approved by Pandora, but at the bank's
sole discretion. Pandora is not directly or indirectly a party
to these agreements. The amounts payable to suppliers
included in the supply chain financing programme are
classified as trade payables in the balance sheet as well
as in the cash flow statement (working capital within cash
flow from operations) and amounts to DKK 24 million at 31
December 2021 (DKK 26 million at 31 December 2020).
NOTE .
CONTRACT ASSETS AND LIABILITIES CONTINUED
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NET INTERESTBEARING DEBT
DKK million 2021 2020
Loans and borrowings, non-current 1041
Lease liabilities, non-current 1724 2066
Loans and borrowings, current 274 3003
Lease liabilities, current 886 993
Cash 1043 2912
Net interest-bearing debt 2882 3151
CAPITAL STRUCTURE
AND NET FINANCIALS
SECTION
This section includes notes related to Pandora’s capital structure and net
nancials, including nancial risks (see note 4.4 ). As a consequence of its
operations, investments and nancing, Pandora is exposed to a number of
nancial risks that are monitored and managed by Pandora’s Group Treasury.
Pandora uses a number of derivative nancial instruments to hedge its expo-
sures to uctuations in commodity prices and currencies. Derivative nancial
instruments are described in note 4.5.
Pandora’s capital structure policy is to maintain a leverage ratio (NIBD to
EBITDA ratio) between 0.5 and 1.5 (excluding restructuring costs and including
leases in accordance with IFRS 16). At 31 December 2021, the ratio was 0.4x,
reecting Pandora’s continued strong cash generation. In 2021, cash conversion
was 88% and Pandora continued to operate with negative net working capital.
Undrawn committed
facilities of DKK 6 billion,
out of DKK 7 billion
with maturity in 2026,
underpin Pandora’s
strong liquidity position.
6bn
DKK
ANNUAL REPORT 2021 FINANCIAL STATEMENTS ANNUAL REPORT
At 31 December 2021, the share capital comprised
100,000,000 shares with a par value of DKK 1. No shares have
special rights.
In 2021, Pandora launched two share buyback programmes
under which Pandora expects to buy back own shares to a
value of DKK 4.0 billion. In 2021, Pandora bought 3,943,797
treasury shares, corresponding to a total purchase price of
DKK 3.3 billion. At 31 December 2021, Pandora had yet to
repurchase own shares at a total purchase price of DKK 0.7
billion as part of the share buyback programmes.
Own shares of DKK 0.7 billion have been repurchased after
31 December 2021.
Treasury shares
All treasury shares are owned by Pandora A/S. Treasury shares
include hedges for share-based incentive plans granted to
the Executive Management and other employees.
NOTE .
SHARE CAPITAL
SHARE CAPITAL Number of shares Nominal value (DKK)
Balance at 1 January 100000000 100000000
Balance at 31 December 100000000 100000000
Balance at 1 January 100000000 100000000
Balance at 31 December 100000000 100000000
TREASURY SHARES
Number
of shares
Nominal
value (DKK) Purchase price
% of shares
Balance at 1 January 322839 322839 92742356 03%
Used to settle performance shares 4754 4754 1264761 00%
Purchase of treasury shares 3943797 3943797 3324724241 39%
Balance at 31 December 4261882 4261882 3416201836 43%
Balance at 1 January 7070524 7070524 1964356664 71%
Used to settle performance shares 51140 51140 14363322 01%
Purchase of treasury shares 1303455 1303455 430511739 13%
Sale of treasury shares 8000000 8000000 2287762725 80%
Balance at 31 December 322839 322839 92742356 03%
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
EARNINGS PER SHARE AND DIVIDEND
DKK million 2021 2020
Prot attributable to equity holders 4160 1938
Weighted average number of ordinary shares 98775946 97048768
Eect of performance shares 898708 374286
Weighted average number of ordinary shares adjusted for the eect of dilution 99674654 97423054
Basic earnings per share, DKK 421 200
Diluted earnings per share, DKK 417 199
There have been no transactions between the reporting date
and the date of completion of the Annual Report involving
shares that would have significantly changed the number of
shares or potential shares in Pandora A/S.
Dividend
The Board of Directors will propose at the Annual General
Meeting that a dividend of DKK 16 per share (2020: DKK 0),
corresponding to DKK 1.6 billion, be distributed for 2021.
In 2021, extraordinary dividend of DKK 1.5 billion in total was
paid. Dividend paid had no effect on the Group’s tax expense
for the year.
For further shareholder information on dividend payments,
see page 42.
ACCOUNTING POLICIES
Dividend proposed is recognised as a liability at the date
of the adoption at the Annual General Meeting (decla-
ration date). Extraordinary dividend is recognised as a
liability at the declaration date.
Distributable reserves
Cash distribution to the shareholders are, by law, limited to
the amount of the free reserves of the Parent Company. As
of 31 December 2021, free reserves in the Parent Company
amounted to DKK 7.5 billion. When calculating the amount
available for distribution of dividend and share buyback,
treasury shares are deducted from distributable reserves.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
TOTAL LIABILITIES FROM FINANCING ACTIVITIES
DKK million
Financial liabilities
1 January Cash ows, net New leases, etc. Other
Foreign exchange
adjustments
Financial liabilities
31 December
Non-current borrowings 1315 273 1041
Non-current lease liabilities 2066 495 899 61 1724
Current borrowings 3003 3004 274 1 274
Current lease liabilities 993 991 215 637 32 886
Total liabilities from nancing activities 6063 2680 710 262 94 3926
Non-current borrowings 5157 2182 2976
Non-current lease liabilities 2804 588 1225 101 2066
Current borrowings 1057 1028 2976 1 3003
Current lease liabilities 1012 839 261 608 49 993
Total liabilities from nancing activities 10031 4050 849 617 150 6063
Includes the eect of the reclassication of the non-current portion of interest-bearing loans and borrowings to current due to the passage of time. Further, it includes the eect of accrued but not yet paid interest on interest-bearing loans and borrowings, upfront prepayment of lease liabilities and the eect of the
lease modication and reassessment. The Group classies interest paid as cash ows from operating activities.
NOTE .
NET INTERESTBEARING DEBT
ACCOUNTING POLICIES
On initial recognition, interest-bearing debt and borrowings are measured at fair value less trans-
action costs. Subsequent to initial recognition, interest-bearing loans and borrowings are meas-
ured at amortised cost using the effective interest rate method. Gains and losses are recognised
in the income statement when the liabilities are derecognised and through the effective interest
rate method. Amortised cost is calculated by taking into account any discount or premium at
inception, and fees and other costs.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
the general policy is for Group Treasury to hedge at least 70%
of the Group’s expected purchases.
Purchases are hedged from 1 to 12 months forward with a
hedge ratio target that decreases with time to maturity as
illustrated to the right. Any deviation from the policy must
be approved by the Audit Committee.
Commodity hedging is updated at the end of each month or
in connection with revised 12-month rolling production plans.
Actual production may deviate from the 12-month rolling
production plan. In case of deviations, the realised commodity
hedge ratio may deviate from the estimated hedge ratio. The
effective portion of the realised gain or loss from commodity
hedging is recognised in Group inventories and subsequently
in cost of sales. For the fair value of hedging instruments,
see note 4.5 Derivative financial instruments.
Foreign currency risk
Pandora’s presentation currency is DKK, but the majority of
Pandora’s activities and investments are denominated in
other currencies. Consequently, exchange rate fluctuations
may have a substantial impact on Pandora’s cash flows, profit
(loss) and/or financial position in DKK.
As a consequence of its operations, investments and finan-
cing, Pandora is exposed to a number of financial risks that
are monitored and managed by Pandora’s Group Treasury.
To manage financial risks, Pandora may use a number of finan-
cial instruments, such as forward contracts, silver and gold
swaps, currency and interest rate swaps, options and similar
instruments within the framework of its current policies.
Financial risks are divided into commodity price risk, foreign
currency risk, credit risk, liquidity risk and interest rate risk.
It is Pandora’s policy to hedge at least 50% of the combined
commodity, exchange rate and interest rate risk. However, at
least 70% of estimated commodity purchases for the next 12
months must be hedged.
The table to the right illustrates the sensitivity on 2021 reve-
nue, EBIT and EBIT margin from exchange rates and commod-
ity price movements. In addition, the sensitivity of assets and
liabilities as of 31 December from currency movements is
illustrated on the next page.
Commodity price risk
Raw material risk is the risk of fluctuating commodity prices
resulting in additional production costs. The most important
raw materials are silver and gold, which are priced in USD.
It is the policy of Pandora to ensure stable, predictable raw
material prices. Based on a rolling 12-month production plan,
NOTE .
FINANCIAL RISKS
2021 2020
SENSITIVITY ANALYSIS ON EXCHANGE RATES AND
COMMODITY PRICES
1
DKK million
Change in
exchange rate and
commodity prices Revenue EBIT
EBIT
margin
impact Revenue EBIT
EBIT
margin
impact
USD 10% 748 350 07% 480 138 03%
CAD 10% 65 38 01% 57 36 01%
AUD 10% 127 81 02% 123 83 03%
GBP 10% 333 235 06% 299 209 09%
EUR 1% 62 39 01% 53 30 01%
CNY 10% 111 7 01% 125 30 01%
THB 10% 238 10% 227 12%
GOLD and SILVER 10% 182 08% 124 07%
1
Revenue and EBIT would have been impacted by the above amounts if exchange rates and commodity prices in 2021 had been higher than the realised exchange rates and commodity prices. The impact would have been
the opposite if exchange rates and commodity prices had been decreasing by similar percentages. The analysis is based on the transaction currency. The analysis excludes the eects of hedging and time lag of inventory.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Min Max
COMMODITY HEDGE
RATIO TARGET %
%
MONTHS AHEAD
%
MONTHS AHEAD
%
MONTHS AHEAD
%
MONTHS AHEAD
Exchange rate fluctuations may lead to a decrease in revenue
and an increase in costs and thus declining margins. In addition,
exchange rate fluctuations affect the translated value of the
profits or losses of foreign subsidiaries and the translation of
foreign currency assets and liabilities.
It is Pandora’s policy to hedge foreign currency risks related
to the risk of declining net cash flows resulting from exchange
rate fluctuations. Pandora does not hedge balance sheet items
or ownership interests in foreign subsidiaries. For 2021, 70%
of the cash flows from the main currencies have been hedged
based on a rolling 12-month liquidity forecast. Cash flows are
hedged from 1 to 12 months forward with a hedge ratio that
decreases with time to maturity. Foreign currency hedging
is updated at the end of each month or in connection with
revised 12-month rolling cash forecasts. The realised profit
(loss) from exchange rate hedging is taken to financial items.
The table below illustrates the currency revaluation impact
in DKK million on net profit and changes in equity resulting
from a change in the Group’s primary foreign currencies
after the effect of hedge accounting.
Credit risk
Credit risk is primarily related to trade receivables, cash and
unrealised gains on financial contracts. The maximum credit
risk related to financial assets corresponds to the carrying
amounts recognised in the consolidated balance sheet.
It is Pandora’s policy for subsidiaries to be responsible for
credit evaluation and credit risk on their trade receivables.
Any deviations from standard agreements must be approved
by Group Treasury and/or the Chief Financial Officer.
Note 3.6 Trade receivables includes an overview of
the credit risk related to trade receivables. Rating of trade
receivables does not differ materially either by type of
customer or geographic location. The risk of further
impairment is considered to be limited.
Credit risks related to Pandora’s other financial assets mainly
include cash and unrealised gains on financial contracts.
NOTE .
FINANCIAL RISKS CONTINUED
CURRENCY EXPOSURE FROM
ASSETS AND LIABILITIES
DKK million
31 December 2021 31 December 2020
Change in
exchange rate
Prot (loss)
before tax
Equity
Prot (loss)
before tax
Equity
USD 10% 38 188 118 36
CAD 10% 28 8 14 4
AUD 10% 8 43 2 35
GBP 10% 47 159 43 54
EUR 1% 3 3 2 31
THB 10% 71 170 52 121
CNY 10% 21 35 60 36
The movements in the income statement arise from monetary items (cash, borrowings, receivables and payables) where the functional currency of the entity diers from the cur-
rency that the monetary items are denominated in. The movements in equity arise from monetary items and hedging instruments where the functional currency of the entity diers
from the currency that the hedging instruments or monetary items are denominated in. The impact would have been the opposite if exchange rates had been decreasing by similar
percentages. The analysis is based on the transaction currency.
The majority of Pandora’s revenue is denominated in USD, CAD,
AUD, GBP, CNY and EUR. The functional currency of subsidiar-
ies is generally the local currency, and a substantial portion of
Pandora’s costs relates to raw materials purchased in USD. In
addition, Pandora incurs costs denominated in THB. Changes in
the exchange rate of these currencies versus DKK will result in
changes to the translated value of future EBIT and cash flows.
Pandora finances the majority of its subsidiaries’ cash re-
quirements via intercompany loans denominated in the
local currency of the individual subsidiary. A devaluation of
these currencies against DKK will in general result in a foreign
exchange loss in the Parent Company.
REVENUE BREAKDOWN
BY CURRENCY %
Other
USD
GBP
EUR
CAD
CNY
AUD
%
%
%
%
%
%
%
%
%
%
%
%
%
%
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
LIABILITIES FALL DUE AS FOLLOWS
DKK million
Falling due
within
1 year
Falling due
between
1 and 5 years
Falling due
after more
than 5 years
Total
Non-derivatives
Loans and borrowings 274 1050 1324
Lease liabilities 977 1600 275 2851
Trade payables 3267 3267
Other payables 289 289
Derivatives
Derivative nancial instruments 209 209
Total at 31 December 5016 2650 275 7941
1
Non-derivatives
Loans and borrowings 3033 3033
Lease liabilities 1079 1863 356 3298
Trade payables 3211 3211
Other payables 293 293
Derivatives
Derivative nancial instruments 119 119
Total at 31 December 7735 1863 356 9954
Items not classied as nancial instruments were excluded in 2020.
NOTE .
FINANCIAL RISKS CONTINUED
The credit risk is related to default of the counterparty with a
maximum exposure corresponding to the carrying amount of
the assets. Group Treasury is responsible for managing these
credit risks.
Liquidity risk
Pandora’s cash conversion is high and Pandora maintains an
adequate level of cash and unutilised credit facilities to meet
financial obligations when due. Pandora’s liquidity risk is
considered to be low.
Pandora has a new revolving credit facility of DKK 7,065 mil-
lion committed until April 2026
1
. Pandora has uncommitted
credit facilities to ensure efficient and flexible local liquidity
management. The credit facilities are managed by Group
Treasury.
Interest rate risk
Interest rate risk is the risk of interest rate fluctuations
resulting in changed interest rate payments and market
value of the net borrowings. At the reporting date, all inter-
est-bearing loans and borrowings were based on floating
interest rates.
All else being equal, it is estimated that a general increase in
interest rates by one percentage point would lead to a DKK 6
million decrease in profit before tax and equity, excluding tax
effect (2020: no impact).
Contractual maturities of nancial liabilities
The table to the right breaks the Group’s financial liabilities
down into relevant maturity groupings based on contractual
maturities for:
• all non-derivative financial liabilities;
• net and gross settled derivative financial instruments for
which the contractual maturities are essential for an under-
standing of the timing of the cash flows.
The amounts disclosed in the table are the contractual
undiscounted cash flows. Balances due within 12 months
equal their carrying amounts as the impact of discounting is
insignificant.
Based on the Group’s expectations for the future operation
and the Group’s current cash resources, no significant liquidi-
ty risks have been identified.
Two year extension option (1+1) subject to bilateral consent between Pandora and
bank group.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Pandora uses a number of derivative financial instruments to hedge its exposure to fluctua-
tions in commodity prices and exchange rates.
Derivative financial instruments include silver and gold swaps and foreign exchange forward
contracts.
DKK million
Assets
Liabilities
Carrying
amount
Hedge reserve,
net of tax
2021
Commodities 8 121 113 90
Foreign exchange 61 88 27 20
Total derivative nancial instruments 69 209 140 110
2020
Commodities 231 10 220 206
Foreign exchange 120 108 12 9
Total derivative nancial instruments 351 119 232 215
Classication according to the fair value
hierarchy
The fair value at 31 December 2021 and 2020 of Pandora’s
derivative financial instruments was measured in accordance
with level 2 in the fair value hierarchy (IFRS 13). Level 2 is based
on non-quoted prices, observable either directly (i.e. as prices)
or indirectly (i.e. derived from prices). Pandora uses input from
third-party valuation specialists to quote prices for unrealised
derivative financial instruments. The value of unrealised silver
and gold instruments is tested against the prices observable
at London Bullion Market Association (LBMA). The value of
unrealised foreign exchange instruments is tested against
observable foreign exchange forward rates.
The value of financial instruments recognised in other com-
prehensive income is recycled from equity at the time the
instrument is settled, i.e. within 12 months.
NOTE .
DERIVATIVE FINANCIAL INSTRUMENTS
It is Pandora’s policy to hedge at least 70% of the Group’s expected gold and silver consump-
tion based on a rolling 12-months production plan. The table to the right illustrates the timing
of the hedges related to the purchase of silver for production, i.e. excluding the time-lag effect
from inventory to cost of sales (when the product is sold). The time-lag from use in production
to impact on cost of sales is usually 2-7 months.
Derivative nancial instruments that qualify
for cash ow hedge accounting
The hedges are expected to be highly effective due to the
nature of the economic relation between the exposure and
the hedge.
The effective portion of the unrealised gain or loss on all hedg-
ing instruments is recognised directly as other comprehensive
income in the equity hedging reserve. The ineffective portion
is recognised in net financials.
The effective portion of the realised gain or loss on a com-
modity hedging transaction is recognised in Group inventories
and subsequently in cost of sales whereas the ineffective
portion is realised in net financials.
The realised gain or loss on all foreign exchange contracts is
recognised in net financials.
HEDGED AND REALISED PURCHASE PRICES
At use of the silver and gold for production
Realised in
2021
Hedged
Q1 2022
Hedged
Q2 2022
Hedged
Q3 2022
Hedged
Q4 2022
Gold price 1785 1806 1802 1794 1807
Silver price 2372 2565 2559 2372 2344
Commodity hedge ratio, % Realised 70100% 7090% 5070% 3050%
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
ACCOUNTING POLICIES
Derivative financial instruments are initially recognised at
fair value at the date on which a contract is entered into
and are subsequently measured at fair value. For derivative
financial instruments not traded in an active market, the fair
value is determined using appropriate valuation methods.
Such methods may include comparison with recent arm’s
length market transactions, reference to the current fair
value of another instrument that is substantially the same, or
discounted cash flow analysis.
Pandora has designated certain derivative financial instru-
ments as cash flow hedges as defined under IFRS 9. Hedge
accounting is classified as a cash flow hedge when the
hedges of a particular risk is associated with the cash flows
of recognised assets and liabilities and highly probable
forecast transactions.
Pandora designates and documents all hedging relationships
between commodity contracts and purchase transactions.
OTHER NONCASH ADJUSTMENTS
DKK million 2021 2020
Eects from exchange rate adjustments 129 52
Eects from derivative nancial instruments 91
Eects from IFRS16 rent concessions 56 112
Other, including gains/losses from the sale of
property, plant and equipment 4 4
Total other non-cash adjustments 70 155
NOTE .
OTHER NONCASH
ADJUSTMENTS
FINANCE INCOME
DKK million 2021 2020
Reclassied from equity hedge reserves 53 149
Total nance income from derivative nancial instruments 53 149
Finance income from loans and receivables measured at amortised cost:
Foreign exchange gains 78 160
Interest income, bank 19 6
Interest income, loans and receivables 2 1
Total nance income from loans and receivables 99 167
Total nance income 152 316
FINANCE COSTS
DKK million 2021 2020
Reclassied from equity hedge reserves 286 68
Total nance costs from derivative nancial instruments 286 68
Finance costs from nancial liabilities measured at amortised cost:
Foreign exchange losses 116 186
Interest on loans and borrowings 34 61
Interest on lease liabilities 99 97
Other nance costs 78 95
Total nance costs from loans and borrowings 327 439
Total nance costs 613 507
NOTE .
NET FINANCIALS
ACCOUNTING POLICIES
Finance income and costs comprise interest income and
expenses, realised and unrealised gains and losses on pay-
ables/receivables and transactions in foreign currencies.
For all financial instruments measured at amortised cost,
interest income or expense is recognised using the effec-
tive interest rate, which is the rate that discounts the esti-
mated future cash payments or receipts over the expected
life of the financial instrument or a shorter period, where
appropriate, to the net carrying amount of the financial
asset or liability.
The ineffectiveness impact in net financials was a gain
of DKK 16 million (2020: gain of DKK 31 million).
For information about risk management strategy,
see note 4.4 Financial risks.
NOTE .
DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
NOTE .
CONTINGENT LIABILITIES
Litigation
Pandora is a party to various legal proceedings with current
business partners, authorities and other third parties, related
to copyrights, marketing conduct and pricing. None of these
proceedings is expected to have a material effect on
Pandora’s financial position or future earnings.
Related parties with signicant interests
At 31 December 2021, treasury shares accounted for 4.3% of
the share capital (2020: 0.3%), see note 4.1 Share capital.
Other related parties of Pandora with significant influence
include the Board, Executive Management and their close
family members. Related parties also include companies in
which the aforementioned persons have control or signifi-
cant interests.
Transactions with related parties
As part of the share buyback carried out in 2021, Pandora
purchased own shares from major shareholders. The shares
were purchased at the volume-weighted average purchase
price for the shares purchased under the share buyback
programme in the market on the relevant day of trading.
Pandora did not enter into any significant transactions with
members of the Board or the Executive Management, except
for compensation and benefits received as a result of their
membership of the Board, employment with Pandora or
shareholdings in Pandora. See notes 2.3 Staff costs and
2.4 Share-based payments.
NOTE .
RELATED PARTIES
SIGNIFICANT ACCOUNTING ESTIMATES
The factors taken into account when estimating a potential
liability in connection with litigation include the nature of
the litigation or claim. Other factors taken into account
are the development of the case, the judgements and
recommendations of legal or other advisers, experience
from similar cases, and management’s decision on how the
Group will react to the litigation or claim.
DKK million 2021 2020
Fee for statutory audit 10 11
Other assurance engagements 1 1
Total audit related services 11 12
Tax consultancy
Other services 1
Total non-audit services 1
Total fees to independent auditor 11 13
The costs are recognised in the consolidated income statement as administrative expenses.
Pandora has implemented a policy regarding non-audit services provided by the auditor
appointed at the Annual General Meeting. The policy states which services are allowed
or prohibited.
Other non-audit services include fees for advisory services, including Programme NOW.
All non-audit services have been approved according to the policy for non-audit services.
NOTE .
FEES TO INDEPENDENT AUDITOR
NOTE .
EVENTS OCCURRING AFTER THE REPORTING
PERIOD
No subsequent events have occurred after the balance sheet date that required adjustment
to or disclosure in the consolidated financial statements.
Contractual obligations
Pandora has entered into a number of long-term purchase,
sales and supply contracts in the course of the Group’s ordi-
nary business. Contractual obligations amounted to DKK 500
million at 31 December 2021 (2020: DKK 462 million).
Apart from the liabilities already recognised in the balance
sheet, no significant financial losses are expected to be
incurred as a result of these contracts.
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
The table below shows information about the Group entities at 31 December 2021.
Company Ownership Registered oce Date of consolidation
OWNED BY PANDORA A/S
Pandora Jewelry Argentina SRL 100% Argentina 27 September 2017
Pandora Österreich GmbH 100% Austria 23 May 2012
Pandora Jewellery Belgium NV 100% Belgium 13 April 2017
Pandora do Brasil Participações Ltda. 100% Brazil 24 October 2013
Pandora Jewelry Ltd. 100% Canada 7 March 2008
Pandora Jewelry Chile SpA 100% Chile 7 May 2017
Pandora Jewelry Colombia S.A.S 100% Colombia 17 January 2019
Pandora Int. ApS 100% Denmark 1 October 2009
Pan Me A/S 100% Denmark 16 January 2015
Pandora Jewelry Taiwan A/S 100% Denmark 18 May 2018
Pandora Jewellery DMCC 100% Dubai 8 October 2014
Pandora Jewellery UK Limited 100% England 1 December 2008
Pandora Jewelry Finland Oy 100% Finland 1 January 2012
Pandora France SAS 100% France 25 February 2011
Pandora Jewelry GmbH 100% Germany 5 January 2010
Pandora EMEA Distribution Center GmbH 100% Germany 5 December 2011
Pandora Jewelry Asia-Pacic Limited 100% Hong Kong 1 November 2009
Pandora Jewelry Limited 100% Ireland 10 January 2018
Pandora Italia SRL 100% Italy 23 May 2012
Pandora Jewelry Mexico Import, S.A. de C.V. 100% Mexico 4 April 2018
Pandora Jewelry Mexico, S.A. de C.V. 100% Mexico 8 March 2017
Pandora Jewelry Mexico Servicios, S.A. de C.V. 100% Mexico 8 March 2017
Pandora Jewelry Panama S.A. 100% Panama 5 July 2016
Pandora Jewelry Peru S.A.C 100% Peru 10July 2018
Pandora Jewelry Shared Services Sp. z.o.o. 100% Poland 7 February 2012
Pandora Jewelry CEE Sp. z.o.o. 100% Poland 1 March 2009
Pandora Jewelry Slovakia s.r.o. 100% Slovakia 6 September 2016
Pandora Jewellery South Africa Pty Ltd. 100% South Africa 31 January 2017
Pandora Jewellery Spain S.L 100% Spain 28 September 2017
Pandora Sweden AB 100% Sweden 4 November 2013
Company Ownership Registered oce Date of consolidation
Pandora Schweiz AG 100% Switzerland 6 December 2011
Pandora Production Co. Ltd. 100% Thailand 7 March 2008
Pandora Services Co. Ltd. 100% Thailand 15 October 2010
Pandora Jewelry Mücevherat Anonim Şirketi 100% Turkey 4 November 2013
Pandora Jewelry Inc. 100% USA 1 July 2008
Pandora Jewelry Latam LLC 100% USA 20 October 2021
OWNED BY OTHER COMPANIES IN THE PANDORA GROUP
AD Astra Holdings Pty Ltd. 100% Australia 1 July 2009
Pandora Retail Pty Ltd. 100% Australia 1 July 2009
Pandora Jewelry Pty Ltd. 100% Australia 1 July 2009
Pandora do Brasil Comércio e Importação Ltda. 100% Brazil 24 October 2013
Pandora Franchise Canada Ltd. 100% Canada 19 January 2011
Pandora Retail Canada Ltd. 100% Canada 4 February 2014
Pandora Jewelry (Shanghai) Company Ltd. 100% China 4 February 2015
Pandora Jewelry Design (Beijing) Company Ltd. 100% China 1 March 2016
Pandora Jewelry CR s.r.o. 100% Czech Republic 2 December 2009
Panmeas Jewellery LLC 100% Dubai 16 January 2015
Pandora Jewelry Hong Kong Company Ltd. 100% Hong Kong 4 February 2015
Pandora Jewelry Hungary Ltd. 100% Hungary 2 June 2010
Pandora Jewelry Japan Ltd. 100% Japan 29 October 2014
Pandora Jewelry Macau Company Ltd. 100% Macau 1 January 2016
Pandora Jewelry B.V. 100% Netherlands 20 September 2010
Pandora Norge AS 100% Norway 17 August 2010
Pandora Jewelry Romania SRL 100% Romania 18 August 2011
Pandora Jewelry Singapore Pte. Ltd.. 100% Singapore 1 January 2016
Pandora ECOMM LLC 100% USA 21 August 2014
Pandora Jewelry LLC 100% USA 7 March 2008
Pandora Franchising LLC 100% USA 1 November 2009
Pandora Ventures LLC 100% USA 10 May 2012
Pandora Group has four dormant companies, which have been omitted from the table.
Pandora A/S has no dormant companies.
NOTE .
COMPANIES IN THE PANDORA GROUP
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Forward-looking statements
This Annual Report contains forward-looking statements, including, but not limited to, guidance, expectations, strategies, objectives and
statements regarding future events or prospects with respect to the Company’s future nancial and operating results. Forward-look-
ing statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or
achievements, and may contain words such as “expect”, “estimate”, “intend”, “will be”, “will continue”, “will result”, “could”, “may”, “might”
or any variations of such words or other words with similar meanings. Forward-looking statements are subject to risks and uncertain-
ties that could cause the Company’s actual results to dier materially from the results discussed in such forward-looking statements.
Prospective information is based on management’s then current expectations or forecasts. Such information is subject to the risk that
such expectations or forecasts, or the assumptions underlying such expectations or forecasts, may change. The Company assumes
no obligation to update any such forward-looking statements to reect actual results, changes in assumptions or changes in other
factors aecting such forward-looking statements. Some important risk factors that could cause the Company’s actual results to
dier materially from those expressed in its forward-looking statements include, but are not limited to: economic and geopolitical
uncertainty (including interest rates and exchange rates), nancial and regulatory developments, general changes in market trends and
end-consumer preferences, demand for the Company’s products, competition, the availability and pricing of materials used by the
Company, production- and distribution-related issues, IT failures, litigation, pandemics, and other unforeseen factors. The nature of the
Company’s business means that risk factors and uncertainties may arise, and it may not be possible for management to predict all such
risk factors, nor to assess the impact of all such risk factors on the Company’s business or the extent to which any individual risk factor,
or combination of factors, may cause results to dier materially from those contained in any forward-looking statement. Accordingly,
forward-looking statements should not be relied on as a prediction of actual results.
Key figures and financial ratios stated in the consolidated financial statements have been
calculated in accordance with the CFA Society Denmark guidelines.
Pandora presents the following alternative performance measures not defined according to IFRS (non-GAAP measures) in
the Annual Report:
Furthermore, a breakdown of ‘Operating working capital’, ‘Net working capital’ and ‘Invested capital’ is given on the section 3 divider.
NOTE .
FINANCIAL DEFINITIONS
Revenue growth, % (The current year’s revenue - last year’s revenue)
Last year’s revenue
Revenue growth,
local currency, %
(The current year’s revenue at last year’s exchange rates - last year’s revenue)
Last year’s revenue
Gross margin, % Gross prot / revenue
Eective tax rate, % Income tax expense / prot before tax
Equity ratio, % Equity / total assets
Payout ratio, % Dividends paid for the year / net prot
Total payout ratio, % Dividends paid for the year plus value of share buyback / net prot
EPS basic Net prot / average number of shares outstanding
EPS diluted Net prot / average number of shares outstanding, including the dilutive
eect of share options ‘in the money’
Total like-for-like
sales-out growth, %
Sell-out revenue from concept stores and
eSTOREs across all channels that have been
operated for more than 12 months relative
to the same period last year
Sell-out
growth, %
Like-for-like incl. temporarily closed
stores
Organic
growth, %
Growth in revenue in local currency
relative to the same period last year
adjusted for the acquisition/divestment
of distributors and franchisee stores (the
eect of converting wholesale to retail
revenue and vice versa)
Restructuring
costs
Costs related to Programme NOW
includes inventory buyback, optimisation
of product portfolio and product quality,
brand restructuring, external consultants,
IT transformation, etc.
EBIT excl.
restructuring costs
Earnings before interest and tax (operating
prot) excl. restructuring costs
EBIT margin excl.
restructuring costs,
%
EBIT excl. restructuring costs / revenue
EBIT margin, % EBIT / revenue
EBITDA Earnings before interest, tax, depreciation
and amortisation
EBITDA margin, % EBITDA / revenue
Capital expenditure
(CAPEX)
Purchase of intangible assets and
property, plant and equipment for the
year, excl. acquisitions of subsidiaries
Days sales
outstanding (DSO)
Last three months of wholesale and
third-party distribution revenue relative
to trade receivables from these channels
and not adjusted for VAT
Return on invested
capital (ROIC), %
EBIT / invested capital incl. goodwill
NIBD Loans, borrowings, capitalised leases and
other liabilities relating to obligations to
acquire non-controlling interests (current
and non-current) less cash
NIBD to EBITDA excl.
restructuring cost
NIBD / EBITDA excl. restructuring cost
(rolling 12 months)
Cash conversion
incl. lease
payments, %
Free cash ow before acquisitions / EBIT
ANNUAL REPORT 2021 FINANCIAL STATEMENTS
Executive
Management
Board of
Directors
ANNUAL REPORT MANAGEMENT STATEMENT
Independence
We are independent of the Group in accordance with the Inter-
national Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (IESBA Code) and
the additional ethical requirements applicable in Denmark,
and we have fulfilled our other ethical responsibilities in accor-
dance with these requirements and the IESBA code.
To the best of our knowledge, we have not provided any
prohibited non-audit services as described in article 5(1) of
Regulation (EU) no. 537/2014.
Appointment of auditor
Subsequent to Pandora A/S being listed on Nasdaq OMX
Copenhagen, EY was appointed auditors of Pandora A/S on
8 April 2011. We have been reappointed annually at the
General Meeting for a total consecutive period of 11 years
up to and including the financial year 2021. Subsequent to a
tender process, we were re-appointed at the Annual General
Meeting on 11 March 2021.
INDEPENDENT AUDITOR’S REPORT
ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
Our procedures in relation to revenue recognition and measure-
ment of expected sales returns included considering the Group’s
accounting policies for revenue recognition, including those related
to expected sales returns, and assessing compliance of policies with
applicable accounting standards. We identified and assessed internal
controls related to the timing of revenue recognition and measure-
ment of expected sales returns. We tested the effectiveness of the
Group’s internal controls in relation to calculation of expected sales
returns and timing of revenue recognition. On a sample basis, we
tested sales transactions taking place at either side of the balance
sheet date as well as credit notes issued after the balance sheet date
to assess whether those transactions were recognised in the correct
period. We assessed the key assumptions applied by Management
regarding expected sales returns based on our knowledge of the
business and by reviewing the supporting documentation prepared
by Management. Furthermore, we evaluated the disclosures pro-
vided by Management in the consolidated financial statements and
the Parent Company financial statements to applicable accounting
standards.
Revenue and sales return
Revenue is recognised when control of the goods has been trans-
ferred to the buyer and it is measured at fair value of the expected
consideration to be received, less rebates, discounts, sales taxes,
duties and expected sales returns. Revenue recognition and
measurement of the related expected sales returns was a matter
of most significance in our audit due to the inherent risk in the es-
timates and judgements which Management makes in the normal
course of business as to timing of revenue and measurement of
expected sales returns.
Details on revenue recognition and expected sales returns are
provided in sections 2.1 and 3.8 of the consolidated financial
statements and in section 2.1 and 3.5 of the Parent Company
financial statements, to which we refer.
Taxation
The Group has extensive international operations and in the
normal course of business, Management makes judgements and
estimates in determining the recognition of income taxes, deferred
taxes and provisions for uncertain tax positions. In Thailand,
the Group is subject to Board of Investment (BOI) agreements,
where many, but not all, types of net income are tax-exempt, and
therefore, changes in profit allocation could significantly impact
the Group’s consolidated tax expense. On this basis, taxation was
a matter of most significance in our audit. Additional details on
income taxes are provided in section 2.5 of the consolidated finan-
cial statements, to which we refer.
Our procedures in relation to recognition of income taxes, de-
ferred taxes and provisions for uncertain tax positions included
assessing the Group’s processes for recording and continual re-as-
sessment of provisions for uncertain tax positions. Our procedures
also covered evaluating the assumptions applied by Management
in determining the recognition and measurement of income taxes
and deferred taxes while taking into account relevant corre-
spondence with relevant tax authorities. Our own tax specialists
performed an assessment of the Group’s recognition of income
taxes and deferred taxes, including correspondence with relevant
tax authorities to consider the completeness of the tax provi-
sions. In addition, we assessed the assumptions used, taking into
consideration our own tax specialists’ knowledge and experience.
Further, we evaluated the disclosures provided by Management
in the consolidated financial statements and the Parent Company
financial statements to applicable accounting standards.
Inventory
The Group carries inventory in the balance sheet at the lower of
cost and net realisable value. Significant management judgements
are required with regards to valuation of inventories due to the
uncertainty associated with the estimate of slow-moving items and
expected value of the reusable raw materials, as well as calculations
of elimination of internal gain. Given the level of significant manage-
ment judgements and estimates, inventory valuation was a matter of
most significance in our audit. Additional details on the valuation of
inventories are provided in section 3.5 of the consolidated financial
statements and in section 3.4 of the Parent Company financial state-
ments, to which we refer.
Our procedures in relation to inventory valuation included assess-
ing the Group’s processes related to inventory valuation including
on a sample basis testing of direct costs related to raw materials,
labour costs and attributable overhead costs incurred in the man-
ufacturing process, recording of write-downs and understanding of
the process for internal gain elimination. We challenged the basis
for write-downs and performed analytical procedures to assess
slow-moving items. We assessed the key assumptions applied by
Management regarding items life-cycle status and expected value
of the reusable raw materials based on our knowledge of the busi-
ness, and on a sample basis tested the supporting documentation.
Further, on a sample basis we tested the calculation of elimination
of internal gain at group level. Furthermore, we evaluated the
disclosures provided by Management in the consolidated financial
statements and the Parent Company financial statements to appli-
cable accounting standards.
DESCRIPTION OF
MATTER
CONSIDERATION OF THE
MATTER IN THE AUDIT
ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
CVR no. 30 70 02 28
ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
FINANCIAL REVIEW
The Parent Company operates as the principal of Pandora,
and all inventories are consequently traded from the
crafting facilities in Thailand to wholesalers and retailers
through the Parent Company. Similarly, all inventories are
returned from subsidiaries through the Parent Company for
the purpose of remelting any excess inventory. Gross prot
is therefore impacted by realised losses from remelting
activities and unrealised losses from inventory write-downs.
Fluctuations in market prices of silver and gold also have a
major impact on gross prot.
Apart from the sale of jewellery, the Parent Company
maintains and develops Group functions, including
administration, distribution, business development, retail
set up, product development and risk management, which
all determine the activity level in the Parent Company.
The risk management activities carried out by the Parent
Company include hedging the Group’s risk relating to
commodity prices and exchange rates.
Revenue was DKK 13.6 billion (2020: DKK 9.6 billion), while
net prot was DKK 5.4 billion (2020: DKK 1.6 billion). The
increase in net prot was mainly related to the business
recovery after COVID-19 as well as received dividends of
DKK 2.8 billion (2020: DKK 0.7 billion). In 2021, Pandora
A/S paid an extraordinary dividend of DKK 15 per share,
corresponding to DKK 1.5 billion.
Other events and impacts in 2021:
• In 2021, Pandora A/S launched two share buyback
programmes under which Pandora expects to buy back
own shares to a value of DKK 4.0 billion. Treasury shares
acquired in the year amount to 3,943,797, corresponding
to a total purchase price of DKK 3.3 billion.
• Pandora A/S merged with the 100% owned subsidiary
Pandora Jewelry Central Western Europe A/S in 2021
with Pandora A/S as the surviving company. The merger is
described in the notes 1.1 Principal accounting policies
and 3.3 Investments in subsidiaries and business
combinations in the Parent Company Financial
Statements 2021.
DKK billion
revenue 2021
DKK billion
net prot 2021
13.6
5.4
ANNUAL REPORT 2021 PARENT COMPANY
INCOME STATEMENT
DKK million Notes 2021 2020
Revenue 21 13583 9626
Cost of sales 6440 4932
Gross prot 7143 4693
Sales, distribution and marketing expenses 22 31 2082 1160
Administrative expenses 22 31 1259 2138
Operating prot 3802 1396
Dividends from subsidiaries 33 2848 652
Impairment of investments in subsidiaries 33 135
Finance income 45 222 379
Finance costs 45 509 511
Prot before tax 6228 1915
Income tax expense 24 808 291
Net prot for the year 5420 1624
STATEMENT OF COMPREHENSIVE INCOME
DKK million Notes 2021 2020
Net prot for the year 5420 1624
Other comprehensive income:
Items that may be reclassied to prot/loss for the year
Commodity hedging instruments:
- Realised in net cost of sales 4 11
- Realised in net nancials 4 1
- Fair value adjustments 8 2
Foreign exchange hedging instruments:
- Realised in net nancials 249 49
- Fair value adjustments 287 21
Tax on other comprehensive income, hedging instruments,
income/expense 24 8 5
Other comprehensive income, net of tax 29 16
Total comprehensive income for the year 5391 1608
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER
ANNUAL REPORT 2021 PARENT COMPANY
ASSETS
DKK million Notes 2021 2020
Intangible assets 31 3573 2963
Property, plant and equipment 31 51
Right-of-use assets 32 104 128
Investments in subsidiaries 33 5257 6350
Loans to subsidiaries 52 878 1010
Other nancial assets 12 12
Total non-current assets 9855 10514
Inventories 34 687 420
Trade receivables 13 4
Receivables from subsidiaries 52 6829 3700
Right-of-return assets 35 216 204
Derivative nancial instruments 43 44 69 351
Income tax receivable 27 90
Other receivables 116 308
Cash 142 2211
Total current assets 8099 7288
Total assets 17953 17802
EQUITY AND LIABILITIES
DKK million Notes 2021 2020
Share capital 41 100 100
Treasury shares 3416 93
Reserves 216 207
Dividend proposed
Retained earnings 10978 6830
Total equity 7877 7044
Provisions 51 34
Loans and borrowings 42 44 1124 105
Deferred tax liabilities 24 93 318
Total non-current liabilities 1269 457
Provisions 4
Refund liabilities 35 1674 1438
Loans and borrowings 42 44 298 3003
Derivative nancial instruments 43 44 209 119
Payables to subsidiaries 44 52 4937 4361
Trade payables 36 44 831 1135
Income tax payable 488 0
Other payables 44 371 242
Total current liabilities 8807 10301
Total liabilities 10076 10758
Total equity and liabilities 17953 17802
BALANCE SHEET
AT DECEMBER
ANNUAL REPORT 2021 PARENT COMPANY
DKK million Notes
Share
capital
Treasury
shares
Hedging
reserve
Other
reserves
1
Dividend
proposed
Retained
earnings
Total
equity
2021
Equity at 1 January 100 93 9 198 6830 7044
Net prot for the year 5420 5420
Other comprehensive income, net of tax 29 29
Total comprehensive income for the year 29 5420 5391
Transfers 38 38
Share-based payments 23 1 202 203
Eect of merger with subsidiary 33 45 45
Purchase of treasury shares 41 3325 3325
Dividend paid 1481 2 1479
Dividend proposed 1481 1481
Equity at 31 December 100 3416 20 236 10978 7877
The Board of Directors will propose at the Annual General
Meeting that a dividend of DKK 16 per share, corresponding
to DKK 1.6 million (2020: DKK 0 million), be distributed
for 2021.
In 2021, an extraordinary dividend of DKK 15 per share was
paid, corresponding to DKK 1.5 billion.
In 2021, Pandora initiated share buyback programmes, which
resulted in repurchases of 3,943,797 treasury shares, a total
value of DKK 3.3 billion.
For further shareholder information on dividend payments,
see note 4.1 Share capital to the consolidated nancial
statements.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER
2020
Equity at 1 January 100 1964 25 266 836 5568 4832
Net prot for the year 1624 1624
Other comprehensive income, net of tax 16 16
Total comprehensive income for the year 16 1624 1608
Transfers 68 68
Share-based payments 23 14 68 82
Purchase of treasury shares 41 431 431
Sale of treasury shares
2
41 2288 509 1779
Dividend paid 836 11 825
Dividend proposed
Equity at 31 December 100 93 9 198 6830 7044
¹ Other reserves include non-distributable reserves under Danish legislation relating to the capitalisation of projects developed in-house.
² On 5 May 2020, Pandora initiated an accelerated bookbuild for the sale of 8 million treasury shares, which was conducted on the same day, generating approximately DKK 1.8 billion in net proceeds.
ANNUAL REPORT 2021 PARENT COMPANY
DKK million Notes 2021 2020
Operating prot 3802 1396
Depreciation and amortisation 286 277
Share-based payments 23 106 43
Change in inventories 268 295
Change in intercompany receivables/payables 1629 1588
Change in receivables 171 118
Change in payables and other liabilities 97 235
Other non-cash adjustments 46 384 478
Interest etc. received 31 65
Interest etc. paid 369 120
Income tax paid 513 124
Cash ows from operating activities, net 2098 365
Acquisitions of subsidiaries and activities, net of cash acquired 33 138 24
Purchase of intangible assets 253 113
Purchase of property, plant and equipment 13
Change in other nancial non-current assets 3
Dividends received
1
858
Cash ows from investing activities, net 743 152
DKK million Notes 2021 2020
Dividend paid 1479 825
Purchase of treasury shares 41 3325 431
Sale of treasury shares 41 1778
Proceeds from loans and borrowings 42 1315 5921
Repayment of loans and borrowings 42 1412 4769
Repayment of lease commitments 42 26 22
Cash ows from nancing activities, net 4927 1651
Net increase/decrease in cash 2086 1864
Cash at 1 January 2228 347
Net increase/decrease in cash 2086 1864
Cash at 31 December
1
142 2211
Cash ows from operating activities, net 2098 365
- Interest etc. received 31 65
- Interest etc. paid 369 120
Cash ows from investing activities, net 743 152
- Acquisition of subsidiaries and activities, net of cash acquired 138 24
Free cash ow 3041 292
Unutilised committed credit facilities
2
6023 6998
1
Non-cash dividends received amounted to DKK 1,991 million (2020: DKK 652 million).
2
See note 4.4 Financial risks to the consolidated nancial statements.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER
The above cannot be derived directly from the income statement and the balance sheet.
ANNUAL REPORT 2021 PARENT COMPANY
Notes for the Parent Company
The notes are grouped into ve sections related to key
gures. The notes contain the relevant nancial information
as well as a description of accounting policies applied for the
topics of the individual notes. For some notes, reference is
made to notes in the consolidated nancial statements.
BASIS OF
PREPARATION
1.1 Principal accounting policies 106
1.2 New accounting policies and disclosures 106
1.3 Management’s judgements and
estimates under IFRS 106
RESULTS FOR THE YEAR
2.1 Revenue from contracts with customers 107
2.2 Sta costs 107
2.3 Share-based payments 107
2.4 Taxation 108
INVESTED CAPITAL AND
WORKING CAPITAL ITEMS
3.1 Intangible assets 109
3.2 Leases 109
3.3 Investments in subsidiaries
and business combinations 110
3.4 Inventories 110
3.5 Contract assets and liabilities 111
3.6 Trade payables 111
CAPITAL STRUCTURE AND
NET FINANCIALS
4.1 Share capital 111
4.2 Liabilities from nancing activities 111
4.3 Derivative nancial instruments 111
4.4 Financial risks 112
4.5 Net nancials 113
4.6 Other non-cash adjustments 113
OTHER
DISCLOSURES
5.1 Contingent liabilities 113
5.2 Related parties 114
5.3 Fees to independent auditor 114
CONTENTS
ANNUAL REPORT 2021 PARENT COMPANY
Under section 149 of the Danish Financial Statements Act, the
consolidated nancial statements of Pandora (also referred
to as the ‘Group’) represent an extract of Pandora’s complete
Annual Report. This Annual Report of the Parent Company is an
integrated part of the full Annual Report, which contains the
statement by Executive Management and the Board of Direc-
tors as well as the independent auditor’s report.
The Parent Company nancial statements show the
nancial position, results and cash ows of Pandora A/S
on a non-consolidated basis for the nancial year 1 January –
31 December 2021.
Parent Company nancial statements
The accounting policies of the Parent Company are un-
changed from last year and identical to the accounting
policies in Pandora’s consolidated nancial statements, with
the following exceptions:
Foreign currency translation
Foreign exchange adjustments of balances accounted for as
part of the total net investment in entities that have a func-
tional currency other than DKK are recognised in prot for
the year as net nancials in the Parent Company nancial
statements.
Derivative nancial instruments
The eective portion of realised and unrealised gains and
losses on all commodity hedging instruments is recog-
nised as cost of goods sold, while the ineective portion is
recognised in net nancials. Derivative nancial instruments
NOTE .
PRINCIPAL ACCOUNTING
POLICIES
NOTE .
NEW ACCOUNTING POLICIES
AND DISCLOSURES
New standards and interpretations
The description in note 1.2 New accounting policies and
disclosures to the consolidated nancial statements
regarding new standards issued eective for the Annual
Report for 2021 fully covers the Parent Company as well,
except for the amendment to IFRS 16, which has not had
any material impact on the Parent Company’s results as
lease arrangements are limited to the headquarters in
Copenhagen and leases for cars and oce equipment.
are treated as economic hedging if the hedge accounting
requirements in IFRS 9 are not met.
Dividends from subsidiaries
Dividends from investments in subsidiaries are recognised in
the nancial year in which they are declared.
Investments in subsidiaries
Investments in subsidiaries are measured at cost. Impairment
testing is carried out if there is any indication of impairment,
as described in Pandora's consolidated nancial statements.
The carrying amount is written down to the recoverable
amount whenever the carrying amount exceeds the recovera-
ble amount. If the Parent Company has a legal or constructive
obligation to cover a decit in subsidiaries, a provision for
this is recognised.
Group internal restructuring
Group internal transfer of businesses without consideration
(e.g. a merger) is accounted for at booked value based on
the consolidated accounts. As of the date of the transfer of
the business, the investment in the subsidiary is replaced by
the consolidated carrying amounts of underlying assets and
liabilities. The dierence between the consolidated carrying
amounts and investment in subsidiary is recognised in equity.
Transfer of businesses without consideration are reected
in the nancial statements of the Parent Company from
the date of transfer hence comparative information for the
transferred business has not been adjusted.
NOTE .
MANAGEMENT’S JUDGEMENTS
AND ESTIMATES UNDER IFRS
SIGNIFICANT ACCOUNTING ESTIMATES
In the process of preparing the Parent Company financial
statements, a number of accounting estimates and judge-
ments have been made that affect assets and liabilities
at the reporting date and income and expenses for the
reporting period. Management regularly reassesses these
estimates and judgements, partly on the basis of historical
experience and a number of other factors in the given
circumstances, see note 1.3 Management’s judgements
and estimates under IFRS to the consolidated financial
statements.
ANNUAL REPORT 2021 PARENT COMPANY
REVENUE BY SALES CHANNEL
DKK million 2021 2020
Third-party distribution 13583 9626
Total revenue 13583 9626
REVENUE BY GLOBAL BUSINESS UNIT
DKK million 2021 2020
Moments and Collabs 9496 7058
- Moments 8504 5741
- Collabs 992 1317
Style and Upstream Innovation 4087 2568
- Timeless 2266 1599
- Signature 1183 810
- Me 567 159
- Brilliance 70
Total revenue
1
13583 9626
Goods transferred at a point in time 13583 9626
Total revenue 13583 9626
1
Figures include franchise fees of DKK 4 million (2020: DKK 3 million), which have been
allocated to the collections.
NOTE .
REVENUE FROM CONTRACTS
WITH CUSTOMERS
ACCOUNTING POLICIES
Revenue is recognised when control of the products has
been transferred to the subsidiaries. Change of control
of the products occurs when the products have been
delivered to the subsidiary and no further obligation
exists that can affect the transfer of control. The Parent
Company provides return rights to subsidiaries, which
cover products received in subsidiaries for both returns
and warranty, based on historical return rates and current
return liabilities in subsidiaries.
DKK million 2021 2020
Wages and salaries 760 570
Pensions 54 40
Share-based payments 106 43
Social security costs 7 3
Other sta costs 65 118
Total sta costs 993 774
Sta costs have been recognised in the income statement:
Sales, distribution and marketing expenses 497 330
Administrative expenses 496 444
Total sta costs 993 774
Average number of full-time employees during the year 797 614
The performance share programmes described in note 2.4 Share-based payments to the con-
solidated nancial statements are issued by Pandora A/S. The value of shares granted to employ-
ees in the Parent Company’s subsidiaries is recognised in investments in subsidiaries. As described
in note 2.4 Share-based payments to the consolidated nancial statements, the costs related
to share-based payments were DKK 166 million (2020: DKK 70 million), of which DKK 60 million
related to subsidiaries (2020: DKK 23 million).
NOTE .
STAFF COSTS
NOTE .
SHAREBASED PAYMENTS
Revenue mainly comprises sales of jewellery to subsidiaries
carrying out the distribution. All sales are thus intra-group
sales. Contracts are generally ve-year distribution contracts.
Key management personnel at Pandora A/S represent the same persons as key management
personnel of the Pandora Group. For information regarding remuneration of key management
personnel of Pandora A/S, see note 2.3 Sta costs to the consolidated nancial statements.
ANNUAL REPORT 2021 PARENT COMPANY
INCOME TAX EXPENSE
DKK million 2021 2020
Current income tax charge for the year 1009 160
Change in deferred tax for the year 180 124
Adjustment to current tax for prior years 21 54
Adjustment to deferred tax for prior years 61
Total income tax expense 808 291
Deferred tax on other comprehensive
income 8 5
Tax on other comprehensive income 8 5
2021 2020
RECONCILIATION OF EFFECTIVE TAX RATE AND TAX % DKK million % DKK million
Prot before tax 6228 1915
Corporate tax rate in Denmark, 22% 220% 1370 220% 421
Non-taxable dividend income 101% 627 75% 143
Non-deductIble impairment expenses 05% 30
Non-deductible expenses and non-taxable income 01% 3 03% 7
Other adjustments including adjustment to tax for prior years 02% 14 01% 1
Withholding taxes 07% 46 03% 5
Eective income tax rate/income tax expense 130% 808 152% 291
NOTE .
TAXATION
ACCOUNTING POLICIES
Income tax
Pandora A/S is taxed jointly with its Danish subsidiaries.
These subsidiaries are included in the joint taxation from
the date they are recognised in the consolidated financial
statements and up to the date on which they are no longer
consolidated. The jointly taxed Danish companies are
taxed under the on-account tax scheme.
Further information is provided in note 2.5 to the
consolidated financial statements.
DEFERRED TAX
DKK million 2021 2020
Deferred tax at 1 January 318 154
Recognised in the income statement 180 185
Recognised in other comprehensive income 8 5
Recognised in equity, share-based payments 37 16
Deferred tax at 31 December 93 318
Deferred tax liabilities 93 318
Deferred tax, net 93 318
BREAKDOWN OF DEFERRED TAX
DKK million 2021 2020
Intangible assets 552 542
Property, plant and equipment 10 9
Inventories 6 39
Provisions 329 277
Other assets and liabilities 114 23
Deferred tax, net 93 318
ANNUAL REPORT 2021 PARENT COMPANY
NOTE .
INTANGIBLE ASSETS
LEASE LIABILITIES
DKK million 2021 2020
Non-current 83 105
Current 24 27
Total lease liabilities 107 132
Additions of right-of-use assets were DKK 3 million in 2021
(2020: DKK 14 million).
Lease liabilities are recognised in loans and borrowings.
Depreciation on right-of-use assets charged to the income
statement for the period was DKK 26 million (2020: DKK 23
million).
Interest expense for the period was DKK 1 million (2020: DKK
1 million). Total cash outow relating to leases was DKK 26
million in 2021 (2020: DKK 23 million).
NOTE .
LEASES
RIGHTOFUSE ASSETS
DKK million 2021 2020
Property 98 120
Cars 6 8
Total right-of-use-assets 104 128
Assets and liabilities related to leases. Amounts recognised
in the balance sheet:
DKK million
Goodwill
Brand Distribution
Other intangible
assets
Total
Cost at 1 January 549 1044 1541 1011 4144
Additions from merger 590 590
Additions 270 270
Disposals 8 8
Cost at 31 December 1139 1044 1541 1273 4997
Amortisation and impairment losses
at 1 January 427 755 1182
Amortisation for the year 30 130 160
Impairment loss for the year
1
82 82
Disposals
Amortisation and impairment losses
at 31 December
457 967 1424
Carrying amount at 31 December 1139 1044 1084 306 3573
Cost at 1 January 549 1044 1541 904 4038
Additions 114 114
Disposals 7 7
Cost at 31 December 549 1044 1541 1011 4144
Amortisation and impairment
losses at 1 January 397 551 947
Amortisation for the year 30 175 205
Impairment loss for the year
2
32 32
Disposals 3 3
Amortisation and impairment losses
at 31 December
427 755 1182
Carrying amount at 31 December 549 1044 1114 256 2963
1
The impairment loss of DKK 82 million relates to write-down of software applications. The loss is mainly recognised as sales, distri-
bution and marketing expenses in the income statement.
2
The impairment loss of DKK 32 million relates to scrapped software applications. The loss is recognised as administrative expenses.
DKK million 2021 2020
Sales, distribution and marketing
expenses 125 88
Administrative expenses 117 149
Total 242 237
Amortisation and impairment losses have been recognised in the
income statement as follows:
ANNUAL REPORT 2021 PARENT COMPANY
NOTE .
LEASES
NOTE .
INVESTMENTS IN SUBSIDIARIES
AND BUSINESS COMBINATIONS
Result of annual impairment test
As at 31 December 2021, the cost price of investments in
subsidiaries was tested for impairment where Pandora iden-
tied an impairment indicator. The impairment test identied
impairment charges for 2021 amounting to DKK 135 million
(2020: DKK 0 million). The impairment was related to invest-
ments in subsidiaries in Argentina, Brazil and Turkey.
Key assumptions
The impairment test was based on a ve-year forecast
and an applied market-specic discount rate in the range of
14%-43%.
The growth rate applied is an estimate of the expected
growth for each market in the terminal period, including the
expected average ination.
Transfer of businesses without consideration
Pandora A/S merged with the 100% owned subsidiary Pando-
ra Jewelry Central Western Europe A/S in 2021 with Pandora
A/S as the surviving company. Assets obtained through the
merger consist of goodwill (DKK 590 million), cash (DKK 17
million), other current assets (DKK 1,176 million) and total
liabilities (DKK 839 million).
INVESTMENTS IN SUBSIDIARIES
DKK million 2021 2020
Cost at 1 January 6457 6411
Additions 4 24
Disposals
1
1022
Additions relating to share-based
payments 60 23
Cost at 31 December 5499 6457
Impairment at 1 January 107 107
Impairment for the year 135
Impairment at 31 December 242 107
Carrying amount at 31 December 5257 6350
1
In 2021, DKK 899 million relates to the merger of Pandora Jewelry Central Western
Europe A/S into Pandora A/S, and DKK 114 million relates to the capital reduction in
Pandora Jewelry Mexico.
DKK million 2021 2020
Finished goods 588 340
Point-of-sale materials 99 80
Total inventories at 31 December 687 420
Inventory write-downs at 1 January 259 336
Write-downs during the year 113 328
Utilised in the year 119 405
Inventory write-downs at 31 December 253 259
NOTE .
INVENTORIES
Dividend received
In 2021, Pandora A/S received a total of DKK 2.8 billion in div-
idend, mainly from subsidiaries in Thailand (DKK 0.9 billion),
the US (DKK 0.7 billion), the UK (DKK 0.4 billion) and Spain
(DKK 0.3 billion).
In 2020, Pandora A/S received a total of DKK 0.7 billion in
dividend from subsidiaries in Thailand.
Inventory write-downs are recognised in cost of sales, DKK 99
million (2020: DKK 289 million), and operating expenses, DKK
14 million (2020: DKK 39 million).
ANNUAL REPORT 2021 PARENT COMPANY
NOTE .
LIABILITIES FROM FINANCING
ACTIVITIES
TOTAL LIABILITIES FROM
FINANCING ACTIVITIES
DKK million
Financial
liabilities
1 January
Cash
ows,
net
1
New
leases Other
2
Financial
liabilities
31 December
Non-current borrowings 1315 273 1041
Non-current lease liabilities 105 2 23 83
Current borrowings 2976 2975 273 274
Current lease liabilities 27 26 1 22 24
Total liabilities from nancing
activities
3107 1687 3 1 1423
Non-current borrowings 5157 2182 2976
Non-current lease liabilities 119 10 25 105
Current borrowings 933 933 2976 2976
Current lease liabilities 20 22 7 22 27
Total liabilities from nancing
activities
6230 3137 17 3 3107
1
Cash ows from loans and borrowings in the statement of cash ows include internal loan movements. The eect was an inow of
DKK 1,564 million in 2021 (2020: inow of DKK 4,267 million).
2
The ‘Other’ column includes the eect of the reclassication of the non-current portion of interest-bearing loans and borrowings to
current due to the passage of time. Further, it includes the eect of accrued but not yet paid interest on interest-bearing loans and
borrowings and upfront prepayment of lease liabilities. The Group classies interest paid as cash ows from operating activities.
DKK million 2021 2020
Contract assets
Receivables from sale of products 5430 2403
Right-of-return assets 216 204
Total contract assets 5646 2607
Contract liabilities
Refund liabilities 1674 1438
Total contract liabilities 1674 1438
Refund liabilities
The Parent Company recognises a refund liability related to
return rights provided to subsidiaries. A corresponding right-
of-return asset is also recognised as part of contract assets.
The value of the right-of-return asset is determined by how
many of the returned products are expected to be sold.
Remaining products are written down to remelt value.
NOTE .
CONTRACT ASSETS AND
LIABILITIES
See note 4.1 Share capital to the consolidated
nancial statements.
NOTE .
SHARE CAPITAL
NOTE .
TRADE PAYABLES
Pandora generally accepts that vendors sell o their re-
ceivables arising from the sale of goods and services to
Pandora to a third party. Pandora has established a supply
chain nancing programme where vendors can sell o their
receivables from Pandora on attractive terms, based on
invoices approved by Pandora, but at the bank's sole dis-
cretion. Pandora is not directly or indirectly a party to these
agreements. The amounts payable to suppliers included in
the supply chain nancing programme are classied as trade
payables in the balance sheet as well as in the cash ow
statement (working capital within cash ow from operations)
and amounted to DKK 24 million at December 2021 (DKK 23
million at 31 December 2020).
ANNUAL REPORT 2021 PARENT COMPANY
As a consequence of its operations, investments and nanc-
ing, Pandora A/S is exposed to a number of nancial risks that
are monitored and managed by Pandora's Group Treasury.
The company’s nancial risks and the management of these
are in all material respects identical to the disclosures made
in note 4.4 to the con solidated nancial statements,
unless otherwise stated below.
Credit risk
The company’s credit risk includes the risk related to receiv-
ables from subsidiaries.
Contractual maturities of nancial liabilities
The table to the right provides a breakdown of Pandora A/S’s
nancial liabilities similar to note 4.4 to the consolidated
nancial statements.
LIABILITIES FALL DUE AS FOLLOWS
DKK million
Falling due
less than
1 year
Falling due
between
1 and 5 years
Falling due
after more
than 5 years
Total
2021
Non-derivatives
Loans and borrowings 274 1050 1324
Lease liabilities 25 75 9 109
Payables to subsidiaries 4937 4937
Trade payables 831 831
Other payables 112 112
Derivatives
Derivative nancial instruments 209 209
Total at 31 December 6388 1125 9 7522
2020
1
Non-derivatives
Loans and borrowings 3006 3006
Lease liabilities 28 94 12 135
Payables to subsidiaries 4361 4361
Trade payables 1135 1135
Other payables 59 59
Derivatives
Derivative nancial instruments 119 119
Total at 31 December 8708 94 12 8814
1
Items not classied as nancial instruments were excluded in 2020.
NOTE .
FINANCIAL RISKS
NOTE .
DERIVATIVE FINANCIAL
INSTRUMENTS
All hedging is carried out by the Parent Company’s Treasury
department. As all instruments are also recorded in the
Parent Company, all eects from nancial instruments
are shown in note 4.5 to the consolidated nancial
statements.
ANNUAL REPORT 2021 PARENT COMPANY
NOTE .
OTHER NONCASH
ADJUSTMENTS
OTHER NONCASH ADJUSTMENTS
DKK million 2021 2020
Eects from exchange rate adjustments 5 161
Eects from derivative nancial instruments 380 318
Other, including gains/losses from sale of
property, plant and equipment 0 1
Total other non-cash adjustments 384 478
Litigation
Pandora is a party to various legal proceedings with current
business partners, authorities and other third parties, related
to copyrights, marketing conduct and pricing. None of these
proceedings is expected to have a material eect on Pandora
A/S’s nancial position or future earnings.
Contractual obligations
Pandora A/S has entered into a number of long-term pur-
chase, sales and supply contracts in the course of the com-
pany’s ordinary business. Contractual obligations amounted
to DKK 491 million as 31 December 2021 (2020: DKK 461
million). Apart from the liabilities already recognised in the
balance sheet, the company does not expect to incur any
signicant nancial losses as a result of these contracts.
Other contingent liabilities
Pandora A/S has issued letters of support in favour of certain
subsidiaries. Furthermore, the company has issued guaran-
tees totalling DKK 508 million at 31 December 2021 in favour
of certain subsidiaries related to securing local credit lines
and rental agreements (2020: DKK 580 million).
The company is jointly taxed with Danish subsidiaries. The
company is jointly and severally liable with other jointly taxed
Danish companies within the Group for income tax and with-
holding taxes due on or after 1 July 2012 in the joint taxation.
NOTE .
CONTINGENT
LIABILITIES
FINANCE INCOME
DKK million 2021 2020
Reclassied from equity hedge reserves 53 149
Total nance income from derivative nancial instruments 53 149
Finance income from loans and receivables measured at amortised cost:
Interest income from subsidiaries 31 64
Foreign exchange gains 138 165
Total nance income from loans and receivables 169 230
Total nance income 222 379
FINANCE COSTS
DKK million 2021 2020
Reclassied from equity hedge reserves 298 68
Total nance costs from derivative nancial instruments 298 68
Finance costs from nancial liabilities measured at amortised cost:
Interest costs to subsidiaries 11 5
Foreign exchange losses 120 326
Interest on loans and borrowings 34 61
Interest on lease liabilities 1 1
Other nance costs 45 50
Total nance costs from loans and borrowings 211 443
Total nance costs 509 511
NOTE .
NET FINANCIALS
ANNUAL REPORT 2021 PARENT COMPANY
TRANSACTIONS ENTERED INTO WITH RELATED PARTIES
DKK million 2021 2020
Income statement:
Sales to subsidiaries 13577 9621
Purchases from subsidiaries 5977 4726
Recharges 589 312
Dividend 2848 652
Finance income 31 64
Finance costs 11 5
Total 9880 5294
Balance sheet:
Loans to subsidiaries, non-current 878 1010
Trade receivables from subsidiaries 5418 2399
Loans to subsidiaries, current 1411 1301
Right-of-return assets, related parties 216 204
Payables to subsidiaries 4937 4361
Refund liabilities, related parties 1674 1438
Total 1312 885
Development in impairment losses on trade receivables
Impairment at 1 January 24 25
Additions 15
Unused amounts reversed 1
Impairment at 31 December 39 24
NOTE .
FEES TO INDEPENDENT
AUDITOR
NOTE .
RELATED PARTIES
In addition to the related parties disclosed in note 5.2
to the consolidated nancial statements, related parties
of Pandora A/S include the subsidiaries listed in the Group
structure in note 5.5 to the consolidated nancial
statements.
DKK million 2021 2020
Fee for statutory audit 3 3
Other assurance engagements 1 1
Total audit related services 4 4
Other services 0
Total non-audit services 0
Total fees to independent auditor 4 4
The costs are recognised in the income statement as
administrative expenses.
ANNUAL REPORT 2021 PARENT COMPANY
