Q2 2O22
INTERIM FINANCIAL REPORT
16 August 2022 | Company Announcement No. 735
2
HIGHLIGHTS
02 Executive Summary
03 Financial Highlights
4
BUSINESS UPDATE
04 Business Update
07 Revenue Review
12 Profitability
15 Cash Flow & Balance Sheet
16 Financial Guidance
19 Sustainability
20 Other Events
22 Contact
23
FINANCIAL STATEMENTS
23 Financial Statements
27 Accounting Notes
37 Disclaimer
Our equity story
Pandora is a cross-generational brand with unmatched recognition that gives a voice to
people’s loves. Our jewellery is crafted and hand-finished to the highest ethical and
environmental standards at our state-of-the-art crafting facilities in Thailand and made to
inspire women to collect, create and combine genuine jewellery at affordable prices.
Pandora’s strategy focuses on delivering sustainable and profitable revenue growth
building on the vast untapped opportunities within our existing core business. A strong
cash generation and attractive cash return will remain.
CONTENTS
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
2 | 37
EXECUTIVE SUMMARY
Growth continues – 3
rd
straight quarter with record revenue
- Diamonds by Pandora to be launched in North America on 25 August
Highlights
• Organic growth of 3% in Q2 2022 (17% growth vs Q2 2019). On track to deliver on the guidance for 2022
• High quality growth underpinned by solid performance in our core Moments platform, supported by a
continued strong performance in Collabs and in particular the new Marvel collection
• US was down 12% compared with Q2 2021, as the market is comping the unusual effects from last year’s
stimulus cheques. US delivered strong organic growth of 59% vs Q2 2019 - in line with Q1 2022.
• Key European markets delivered double digit organic growth vs 2021. Other larger markets like Spain and
Mexico also delivered double digit growth
• China was negatively impacted by COVID-19, dragging down group organic growth by 4pp vs 2021 and 7pp
vs 2019
• Online continued to perform well with organic growth of almost 100% vs Q2 2019
• The EBIT margin remains strong with Q2 2022 ending at 22.1%
• Free cash flow ended at DKK 0.5 billion. A further deliberate increase in inventories temporarily impacts cash
conversion negatively in the quarter
• During Q2 2022, DKK 0.7 billion was distributed to shareholders (year to date DKK 3.5 billion). In total, Pandora
plan to distribute DKK 5.3 billion to its shareholders in 2022, equivalent to around 10% of market cap
• Leverage remains low (NIBD to EBITDA at 1.0x) and Pandora has a strong liquidity and funding position
• Diamonds by Pandora to be launched in North America on 25 August
Pandoras guidance for full year 2022 is unchanged. Organic growth is expected to end in the range of 4-6% and EBIT
margin in the range of 25-25.5%. The macroeconomic outlook is associated with elevated uncertainty.
Alexander Lacik, President and CEO of Pandora, says:
“We are very pleased to see our efforts continuing to pay off as we deliver yet another record revenue quarter. We
maintained solid growth vs pre-pandemic levels, despite negative impacts by lockdowns in China and a tough US
comparison due to the stimulus cheques last year. Execution of the Phoenix strategy is progressing well, initiatives like
network expansion, new store concept development and introduction of a new customer loyalty program to mention
a few are on track. We remain optimistic and encouraged by the growth opportunities ahead of us. We are thrilled to
announce the launch of our Diamonds by Pandora collection in North America on 25 August. Another important
milestone on our mission to democratise the jewellery market.”
Financial overview:
DKK million
Q2 2022
Q2 2021
H1 2022
H1 2021
FY 2021
FY 2022
guidance
Revenue
5,655
5,155
11,344
9,655
23,394
Organic growth, %
3%
84%
11%
42%
23%
4-6%
Sell-out growth incl. temporarily closed stores, %
2%
62%
9%
41%
20%
Operating profit (EBIT)
1,249
1,301
2,559
2,204
5,839
EBIT margin, %
22.1%
25.2%
22.6%
22.8%
25.0%
25-25.5%
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
3 | 37
FINANCIAL HIGHLIGHTS
DKK million
Q2 2022
Q2 2021
H1 2022
H1 2021
FY 2021
Financial highlights
Revenue
5,655
5,155
11,344
9,655
23,394
Organic growth, %
3%
84%
11%
42%
23%
Sell-out growth incl. temporarily closed stores, %
1
2%
62%
9%
41%
20%
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
1,737
1,762
3,509
3,178
7,838
Operating profit (EBIT)
1,249
1,301
2,559
2,204
5,839
EBIT margin, %
22.1%
25.2%
22.6%
22.8%
25.0%
Net financials
-27
-21
-37
-113
-461
Net profit for the period
934
992
1,929
1,621
4,160
Financial ratios
Revenue growth DKK, %
10%
79%
17%
37%
23%
Revenue growth, local currency, %
4%
85%
12%
43%
24%
Gross margin, %
76.4%
77.1%
76.2%
76.8%
76.1%
EBITDA margin, %
30.7%
34.2%
30.9%
32.9%
33.5%
EBIT margin, %
22.1%
25.2%
22.6%
22.8%
25.0%
Effective tax rate, %
23.5%
22.5%
23.5%
22.5%
22.6%
Equity ratio, %
27%
44%
27%
44%
38%
NIBD to EBITDA
1.0
0.4
1.0
0.4
0.4
Return on invested capital (ROIC), % of last 12 months EBIT
46%
44%
46%
44%
59%
Cash conversion incl. lease payments, %
40%
98%
-37%
31%
88%
Net working capital, % of last 12 months revenue
5.8%
-0.3%
5.8%
-0.3%
-5.0%
Capital expenditure, % of revenue
5.4%
2.7%
4.1%
2.3%
2.7%
Stock ratios
Total pay-out ratio (incl. share buyback), %
77%
76%
180%
46%
115%
Dividend per share, proposed, DKK
-
-
-
-
16
Dividend per share, paid, DKK
-
5
16
5
15
Earnings per share, basic, DKK
9.9
10.0
20.5
16.3
42.1
Earnings per share, diluted, DKK
9.8
9.9
20.3
16.2
41.7
Consolidated balance sheet
Total assets
20,503
18,277
20,503
18,277
18,542
Invested capital
13,543
11,136
13,543
11,136
9,884
Net working capital
1,451
-57
1,451
-57
-1,181
Net interest-bearing debt (NIBD) incl. capitalised leases
7,926
3,005
7,926
3,005
2,882
Equity
5,617
8,130
5,617
8,130
7,001
Consolidated statement of cash flow
Cash flow from operating activities
928
1,586
-183
1,270
6,228
Capital expenditure – total
306
138
464
225
641
Capital expenditure - property, plant and equipment
236
64
319
98
341
Free cash flow incl. lease payments
506
1,278
-936
693
5,137
1
Sell-out growth only include sell-out from all concept stores including partner owned, and Pandora online. Other points of sales are not included in sell-out growth.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
4 | 37
BUSINESS UPDATE
Another record revenue quarter as the Phoenix strategy further unfolds
Pandora continued the good start to the year delivering another record revenue quarter in Q2 2022. Organic growth
was 3% vs Q2 2021, equal to 17% vs Q2 2019 and keeping up the momentum from Q1 2022. The growth was strong
across the majority of markets with key European markets delivering double digit organic growth vs Q2 2021. The
performance in Europe was impacted by the temporary COVID-19 store closures in Q2 of last year. At Group level,
Pandora had 15% temporary store closures due to COVID-19 in Q2 2021. China represent a significant headwind in
Q2 2022, dragging down organic growth by 4pp vs Q2 2021 and 7pp vs Q2 2019. As expected, US ended Q2 2022
with organic growth of -12% vs Q2 2021, following the tough comp from stimulus packages, which kicked in in March
last year. Growth in the US remained strong vs Q2 2019 at 59%.
Pandora’s biggest product platform, Moments, delivered 4% sell-out growth vs Q2 2021. The performance was
supported by strong Mother’s Day trading, as Pandora continue to see solid traction during key gifting periods. This
is encouraging, as it shows the relevance of the Brand during key gifting occasions.
Furthermore, Moments were supported by Collaborations, which continued the very strong traction from Q1 2022
and was up 34% vs Q2 2021. Growth was supported by the new Marvel collaboration. The Marvel collaboration builds
on Pandora’s strong relationship with Disney and has proved a solid contributor to revenue growth. Marvel has a solid
fan base across geographies and fits well into Pandora’s universe of self-expression. Marvel alone accounted for 2%
share of business in the quarter. More products from the Marvel universe is planned to be launched later in 2022.
Pandora also introduced new Pixar designs in Q2 2022, which also supported the strong performance.
Style had -4% sell-out growth vs Q2 2021. The growth was dragged down by both Timeless and Signature. Both
platforms had no newness during the first half of 2022, but new products will be added to these platforms later in
2022 and 2023. This is a deliberate decision and follows Pandoras merchandising plan, as all platforms will not be
supported by new products each quarter. Pandora ME grew 72% vs Q2 2021 ending at 3% share of revenue in the
quarter. Pandora ME has gained good traction in most of the continental European markets, but still need to gain
stronger traction in for example US and UK.
Pandora steps into the diamond market - launch of Diamonds by Pandora in North America
Pandora has previously communicated that a global sequential launch of Diamonds by Pandora (previously called
Pandora Brilliance) would be initiated in 2022. Today, Pandora confirms that the first market in the global sequential
launch is North America. North America is the biggest market for lab grown diamonds. Diamonds by Pandora will be
available for consumers from 25 August across 269 Pandora stores in US and Canada as well as online. The price range
will start at USD 300 with stone ranges from 0.15 to one carat. The collection will include 33 pieces consisting of rings,
bangles, necklaces and earrings, each featuring a solitary lab-created diamond hand-set within sterling silver, solid
14K yellow gold or solid 14K white gold.
The introduction of Diamonds by Pandora in North America follows a UK test launch in 2021. At the time of initiating
the UK test launch, Pandora also announced that it would stop using mined diamonds. Launching Diamonds by
Pandora in North America is a key element in the Phoenix strategy and one of the essential new potential sources of
growth. Today, 75% of Pandoras revenue is generated by the Moments platform, and it is Pandoras ambition to
continue to grow this platform, however simultaneously fuel its product offering with more platforms. Diamonds by
Pandora is a unique opportunity to drive incremental revenue growth and it has the potential to become a new
meaningful platform for Pandora over time. With this platform, Pandora is tapping into the DKK ~600 billion diamond
market (BAIN 2022, The Global Diamond Industry 2021–22) in which lab grown jewellery diamonds are expected to
grow.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
5 | 37
REVENUE BY SEGMENTS
DKK million
Q2 2022
Q2 2021
Sell-out
growth
vs 2021
Share of
revenue
H1 2022
H1 2021
Sell-out
growth
vs 2021
Share of
Revenue
Moments incl. Collabs
4,223
3,722
4%
75%
8,420
6,973
11%
74%
- Moments
3,680
3,376
1%
65%
7,281
6,242
8%
64%
- Collabs
543
346
34%
10%
1,138
732
38%
10%
Style
1,432
1,433
-4%
25%
2,924
2,682
3%
26%
- Timeless
895
886
-7%
16%
1,840
1,712
-1%
16%
- Signature
368
447
-13%
7%
764
811
-5%
7%
- ME
159
82
72%
3%
301
140
95%
3%
- Diamonds by Pandora
10
18
-22%
0%
19
18
59%
0%
Total revenue
5,655
5,155
2%
100%
11,344
9,655
9%
100%
New loyalty programme and new store concept show promising results
One of the growth pillars in the Phoenix strategy is Personalisation, which aim to drive a more seamless and
personalised customer experience. In Q1 2022, Pandora soft launched its new loyalty programme, My Pandora, in
France and will roll it out to more markets in 2023. The soft launch in France has so far showed strong results and
roughly 250,000 consumers have so far signed up and more than 60% of the consumers enrolled into the programme
have made a purchase. My Pandora represents a significant opportunity for Pandora, as it enables a more emotional
connection with the consumers. Furthermore, it provides the possibility to target consumers directly and thereby
drive a higher frequency of repeat purchase. Through My Pandora, Pandora gets access to quality consumer data
more effectively than today. Consumers are willingly sharing interests and style preferences when signing up, allowing
Pandora to personalise marketing campaigns when engaging with them. My Pandora is a key enabler for Pandora to
complete a true omni-channel experience both online and in-store, as the programme allows store staff to easily
identify consumer interests and purchase history.
Another enabler in completing and succeeding with a true omni-channel experience is the new store concept called
Evoke, which Pandora is currently testing across its key markets. So far, 12 stores have been opened across five
markets in US, China, UK, Italy and Germany. The initial results of the launch are positive, and Pandora expects to open
more than 35 new Evoke stores during Q3 and Q4 2022 with more to come in 2023. Pandora sees that consumers
have more interaction with perimeter walls in the Evoke stores and dwell time has increased roughly 40%. This allows
consumers to be more inspired by the various collections and open up for new possibilities to engage with consumers
for store staff. Evoke has furthermore outperformed during peak periods, indicating that it operationally works very
well. This is a key parameter for success. On average, Pandora has seen Evoke delivering a slightly higher sell-out
growth than comparable stores.
Network expansion supporting growth and margins
In Q2 2022, Pandora saw an incremental revenue contribution of DKK 190 million coming from new store openings
and forward integration. Of the DKK 190 million, roughly DKK 75 million is accounted for as acquisitions (goodwill
paid) and thereby not included in organic growth. On average, Pandora see a revenue markup of roughly 1.8-2.0x
when converting wholesale revenue to retail revenue.
Pandora sees significant opportunities ahead when it comes to adding value creation through network development.
Both through new store openings, but also potential takeovers or acquisition of franchise partners where it make
sense for both parties. Regarding new store openings, Pandora has identified roughly 600 locations across its top
markets where it sees a potential for opening up a new store. Of these 600 stores, 50% are in US and China, and 80%
are concept stores. During 2022 and 2023, Pandora plan to start capitalising on these locations by opening up net
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
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& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
6 | 37
100-150 concept stores. Opening of new stores is EBIT margin accretive, has a short payback on the initial CAPEX
investment of roughly one year and an attractive, low-risk profile. New lease contracts are in most cases quite flexible
and include regular break clauses. In 2022, Pandora expects to open net 50-100 concept stores and net 75-100
Pandora owned other points of sales. Other points of sales has roughly the same margin profile as concept stores,
but revenue is lower.
Franchise takeovers are based on potential, performance, operational set-up and scale and is assessed on a case-by-
case basis. Since Q2 2021, Pandora has added 109 owned and operated concept stores through forward integration
of which 64 stores are accounted for as takeovers (included in organic growth as no goodwill is paid). When Pandora
takes over or acquire a store from a franchise partner it is roughly EBIT margin neutral, as Pandora takes on the full
operational expenses but at a revenue markup of around 1.8 to 2. Additionally, Pandora recognises a temporary drag
on gross margin from inventory buybacks as Pandora for a 3-6 months period has the gross margin of a wholesaler
while the inventory bought back is sold. The drag was 1pp in Q2 2022 and is expected to continue in Q3 and Q4.
Production and pandemic in Thailand
The pandemic continues to require extraordinary measures in Thailand to protect both employees and the
production. By the end of March 2022, Pandora had 1,200 employees in COVID-19 related quarantine in Thailand.
During Q2 2022, the situation improved significantly and today around 600 employees are in quarantine. During the
quarter, Pandora deliberately invested in building further inventories and production capacity to mitigate the risk of
potential future disruptions to the supply chain as well as to support revenue growth. Inventories are now roughly at
the targeted level but as part of normal seasonality ahead of the Q4 peak season, inventories will build up further
during Q3.
As previously communicated, Pandora will increase production capacity by building two new production sites, one in
Northern Thailand and one in Vietnam. The two new sites will increase total capacity to more than 200 million pieces
a year by 2026 vs roughly 130 million today. The new sites also serve to strengthen business continuity plans. Total
CAPEX investment for the two factories are currently estimated at around USD 200 million towards 2026.
Performance metrics
COVID-19 continues to impact performance KPI’s. When comparing vs Q2 2021, the performance needs to be
interpreted with care as temporary store closures distort the year over year performance. On average around 15%
of the stores were temporarily closed in Q2 2021, mainly in European markets. In Q2 2022, Pandora therefore provide
details vs 2019 to provide a cleaner view of the underlying performance. Furthermore, it should be highlighted that
the US performance is distorted by stimulus packages which supported revenue growth in Q2 2021 creating an
elevated comp base.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
7 | 37
REVENUE REVIEW
Historical high Q2 revenue
The revenue growth development can be illustrated as follows (supplementary comments follows below):
Q2 2022 growth composition vs Q2 2021
Organic growth was up 3% in Q2 2022 (17% vs Q2 2019) of which sell-out growth accounted for 2%. The growth was
further fuelled by network expansion of around 1% and takeovers of franchise stores where no goodwill was paid of
1%.
Q2 2022 was negatively impacted by around -1% by the ceasing of the business in Russia and Belarus as well as other
smaller impacts such as lower revenue from online freight, which is not included in sell-out.
Forward integration supported total revenue growth in local currency with 1% driven by store acquisitions, mainly in
US. This is in line with the full year guidance. Finally, Pandora saw a foreign exchange tailwind of 6%, mainly from a
favourable USD development leading to a total revenue growth of 10% in Q2 2022.
*Sell-out growth incl. temporarily closed stores, %
**This only includes the part of forward integration where goodwill is paid (acquisitions)
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
8 | 37
REVIEW OF REVENUE BY CHANNEL
Growth driven by physical stores following COVID-19 lockdowns in Q2 2021
The growth composition between channels have changed compared to Q2 2021. In Q2 2021, Pandora saw an average
of 15% temporary store closures, which drove consumers from the physical network into the online channel. In Q2
2022 the pattern changed, and consumers returned to the physical stores. In Q2 this year, Pandora only had
temporary store closures due to COVID-19 in China. Pandora’s own and operated concept stores delivered organic
growth of 21% vs Q2 2021, while owned and operated other points of sales delivered 75% growth.
Online continued to perform strongly vs 2019 levels, but as expected the revenue level was down vs Q2 2021 due to
the COVID-19 lockdowns last year. Online organic growth was 100% vs Q2 2019. Across most markets, Pandora sees
a greater acceptance of the online store as a path to purchase, but are also seeing consumers returning to stores as
COVID-19 restrictions are lifted.
Organic growth in Pandora’s wholesale business was down -13% vs Q2 2021, while third-party distribution was down
-8%. The organic growth in the wholesale channel was negatively impacted by the takeovers of wholesale stores where
Pandora does not pay goodwill, as these stores are accounted for as retail revenue in Q2 2022 and wholesale revenue
in Q2 2021. The wholesale channel is furthermore dragged down by market mix, as overall US revenue is down in Q2
and US accounts for roughly 40% of the global wholesale revenue. Russia, Ukraine and Belarus dragged down organic
growth in third party distribution, as Pandora has ceased its business with Russia and Belarus, while Ukraine is in a state
of emergency. Excluding these markets, third-party distribution would have been up 18% vs Q2 2021 driven by not
least a strong performance in some of the Asian markets.
REVENUE DEVELOPMENT BY CHANNEL
DKK million
Q2 2022
Q2 2021
Organic
growth vs
Q2 2021
Share of
Revenue
H1 2022
H1 2021
Organic
growth vs
H1 2021
Share of
Revenue
Pandora owned
1
retail
4,101
3,399
10%
73%
8,026
6,355
17%
71%
- of which concept stores
2,724
2,027
21%
48%
5,169
3,408
39%
46%
- of which online stores
1,098
1,222
-16%
19%
2,317
2,639
-17%
20%
- of which other points of sale
279
150
75%
5%
540
308
68%
5%
Wholesale
1,406
1,599
-13%
25%
2,972
2,964
0%
26%
- of which concept stores
767
912
-13%
14%
1,600
1,601
2%
14%
- of which other points of sale
639
687
-12%
11%
1,373
1,363
-4%
12%
Third-party distribution
148
157
-8%
3%
346
336
1%
3%
Total revenue
5,655
5,155
3%
100%
11,344
9,655
11%
100%
1
Pandora does not own any of the premises (Land and buildings) where stores are operated. Pandora exclusively operates stores from leased premises.
Executive
summary
Financial
highlights
Business
update
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review
Profitability
Cash Flow &
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statements
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notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
9 | 37
REVIEW OF NETWORK DEVELOPMENT
Network expansion starting to be visible in the numbers
As mentioned in Q1 2022, Pandora has ceased all business with the distributors in Russia and Belarus following the
Russian invasion of Ukraine. Pandora had 153 concept stores and 66 other points of sale in those markets at the time
the decisions was taken, and they are no longer considered part of Pandora.
Pandora has opened net 15 concept stores in Q2 2022 vs Q1 2022, mainly in US and China. This is the first step in
Pandoras ambition to expand its network. The expansion comes with a significant opportunity for further value
creation, please refer to the section Network expansion supporting growth and margins above.
In July, Pandora furthermore acquired the Portuguese distributor and from 20 July the market is being operated as a
Pandora owned market. The acquisition will convert 25 concept stores and nine shop-in-shops from third-party
distribution stores to Pandora-owned stores. The acquisition will add roughly DKK 100 million of revenue on a full
year basis, converting third-party distributor revenue to retail revenue.
In Q2, a total of 25 Pandora owned shop-in-shops have furthermore been opened. These 25 points of sale are
opened in Latin America of which 13 were opened in Mexico.
Number of points of sale
1
Q2 2022
Q1 2022
Q2 2021
Growth
Q2 2022
/Q1 2022
Growth
Q2 2022
/Q2 2021
Concept stores
2,447
2,432
2,450
15
-3
- of which Pandora owned
2
1,500
1,464
1,379
36
121
- of which franchise owned
618
637
745
-19
-127
- of which third-party distribution
329
331
326
-2
3
Other points of sale
4,001
4,006
4,014
-5
-13
- of which Pandora owned
2
382
357
257
25
125
- of which franchise owned
3,141
3,168
3,274
-27
-133
- of which third-party distribution
478
481
483
-3
-5
Total points of sale
3
6,448
6,438
6,464
10
-16
1
Please refer to note 14 in the accounting notes section for more details.
2
Pandora does not own any of the premises (Land and buildings) where stores are operated. Pandora exclusively operates stores from leased premises.
3
As of Q1 2022, Pandora has excluded 153 concept stores and 66 other points of sales from third-party distribution related to Russia and Belarus. Pandora has also
excluded 180 concept stores and 81 other points of sales from third-part distribution in the Q2 2021 comparison figures related to Russia and Belarus.
Executive
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highlights
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16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
10 | 37
REVIEW OF REVENUE BY KEY MARKET
Growth in Europe remains strong, while US and China drag down total growth
Pandora’s biggest market, the US, was down -12% vs Q2 2021, however still very strong vs 2019, delivering 59%
organic growth. The US performance in Q2 is in line with the expectations laid out in the guidance for 2022. As
previously communicated, a slowdown of the US market was expected in 2022 following the impact from the stimulus
cheques implemented by the US government in 2021. The stimulus cheques were initiated in March 2021 and Q2
2021 was the strongest quarter in Pandora US last year with an organic growth of 80% vs 2019 thereby representing
an elevated comparison base.
Pandora has recognised additional 4% of revenue growth (DKK 70 million) from forward integration in US coming from
the acquisition of franchise partners. This includes the impact from the acquisition of the franchise partner Ben Bridge
announced end of Q1 2022. The acquired Ben Bridge stores had sell-out of around USD 50 million in 2019, which all
else equal should drive roughly DKK 170 million incremental revenue on a full year basis, converting wholesale revenue
to retail revenue. Pandoras long-term aim is to double the US business vs 2019. In the first half of 2022, Pandora has
delivered a 60% organic growth vs 2019 and in absolute value the US business has grown DKK 1.5 billion in revenue
from H1 2019 to H1 2022.
Key European markets had a strong performance in Q2 2022 with all four markets delivering double digit organic
growth vs Q2 2021. Pandora is pleased to see its established markets, UK and Italy, continue to deliver solid
performance with double digit growth rates vs both 2021 and 2019. Both markets enjoy a strong market position and
a high market share.
France was up 13% vs Q2 2021 not least supported by the loyalty programme which was launched in March 2022,
while Germany was up 18%. Both markets continue its strong traction and Q2 2022 is the fourth quarter in a row
where Germany deliver organic growth of more than 20% vs 2019. France was down 4% vs 2019, mainly driven by the
wholesale channel following a weaker Mother’s Day than anticipated. France and Germany both represents a solid
opportunity as Pandoras market share is well below that of Italy and UK.
The performance in China continues to be unsatisfactory and negatively impacted by COVID-19 with the entire
network either being closed or severely impacted. Traffic into stores was down -60% vs 2021, as many stores are
located in cities impacted by the pandemic and China’s “zero-COVID policy”. Additionally, Pandoras online
distribution warehouse is located in Shanghai and for a period of time, Pandora was not able to serve Chinese
consumers online either. Performance in China in Q2 2022 therefore was weak and organic growth ended at -58% vs
Q2 2021, translating into -68% vs Q2 2019. Note that Q2 2021 was the strongest quarter last year. Pandora expects
China to remain a drag on performance for the rest of the year, however the drag should be lower in the second half
than in Q2 2022. On a longer term, Pandora has high ambitions for China and see the market as a big opportunity for
future growth. Pandora’s long term ambition is to triple the China business vs 2019 and first steps in this plan is to
reposition the brand. However this ambition has been postponed until market conditions stabilise, which currently
looks more likely to happen in 2023. The purpose of the investment is among others to drive traffic to the stores,
which makes little sense under current COVID-19 conditions.
Australia was up 3% vs Q2 2021. Australia is expected to be a bigger source of growth in the second half of 2022, as
Australia was severely impacted by COVID-19 during the second half of 2021 and thereby represents an easier comp.
Pandora’s business outside the seven key markets continue to be strong and in Q2 2022 these markets delivered a
combined 26% organic growth vs Q2 2021. The two biggest markets in Rest of Pandora are Spain and Mexico, and
both markets are on a strong growth trajectory. Spain had a 32% organic growth in Q2 2022 vs Q2 2021 while Mexico
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was up almost 50%. In Q2 2022, Spain had a revenue the size of France while Mexico accounted for roughly DKK 210
million. Spain was acquired from a distributor in 2017, while Mexico has been an owned and operated market since it
started in 2016. In 2021, Spain ended the year with revenue of DKK 900 million, while Mexico ended at DKK 565
million.
REVENUE DEVELOPMENT BY KEY MARKET
DKK million
Q2 2022
Q2 2021
Organic
growth
vs 2021
Share of
revenue
H1 2022
H1 2021
Organic
growth
vs 2021
Share of
revenue
US
1,841
1,771
-12%
33%
3,490
3,161
-3%
31%
China
179
390
-58%
3%
433
671
-41%
4%
UK
665
569
15%
12%
1,473
1,156
23%
13%
Italy
595
515
15%
11%
1,181
955
24%
10%
Australia
246
226
3%
4%
490
469
2%
4%
France
237
210
13%
4%
498
403
23%
4%
Germany
285
241
18%
5%
559
432
29%
5%
Total top-7 markets
4,048
3,922
-5%
72%
8,125
7,248
5%
72%
Rest of Pandora
1,607
1,233
26%
28%
3,219
2,407
31%
28%
Total revenue
5,655
5,155
3%
100%
11,344
9,655
11%
100%
Please refer to note 3 in the accounting notes section for details on sell-out growth per key market.
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PROFITABILITY
Strong profitability continues
The EBIT margin development vs Q2 2021 is impacted by a number of non-recurring factors. While the reported EBIT
margin is down roughly 3pp vs Q2 2021, the underlying EBIT margin in Q2 2022 is slightly up vs Q2 2021, as illustrated
above.
In Q2 2021, the EBIT margin was impacted by a few non-recurring items. Pandora received DKK 70 million from
government support and rent concessions related to COVID-19, supporting the EBIT margin last year by 1.4pp. The
EBIT margin last year was further impacted by 1) negative impact from temporary store closures and 2) stimulus
money in US supporting the EBIT margin as it drove elevated growth last year at little incremental cost. The net impact
is estimated at roughly 1pp, but should be viewed as directional.
In Q2 this year, the EBIT margin was temporarily dragged down by 1.0pp due to inventories bought back in connection
with forward integration.
Furthermore rising commodity prices (mainly silver) lead to a headwind of around -1.6pp. This was almost fully offset
by favourable foreign exchange rate developments (mainly USD and Thai baht) of around 1.4pp. The headwinds from
rising commodity prices are expected to impact H1 2022 the hardest, and gradually ease off during Q3 and Q4. The
year to go net impact on EBIT margin from foreign exchange rates and commodities combined is expected to be
slightly positive vs 2021, please also see section “2022 guidance other parameters”.
As can be seen in the bridge above, the underlying development of the EBIT margin is positive vs Q2 2021, as
operating leverage combined with a stronger underlying gross margin support the EBIT margin with 1.1pp. For further
details on gross margin, please see the next section. Offsetting some of the positive impacts are an overall higher
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marketing spend across most of the Pandora markets, also outside US as well as continued investments into the
organisation and digital journey.
GROSS MARGIN
In Q2 2022, the gross margin remained strong and ended at 76.4%. The underlying gross margin is up vs Q2 2021,
despite net headwinds from foreign exchange and commodity prices.
The gross margin was positively impacted by a favourable channel mix with more sales coming through physical O&O
stores as well as overall efficiencies in the production. Increasing commodity prices had a negative impact of -1.6pp,
mainly related to silver. The drag from commodities were partly offset by favourable foreign exchange development,
mainly from Thai baht and USD of 0.8pp. The gross margin was additionally impacted by a temporary drag from
inventory buybacks of around -1.0pp due to take-over of inventory at wholesale value in connection with forward
integration.
GROSS MARGIN AND GROSS PROFIT
DKK million
Q2 2022
Q2 2021
Growth in
constant FX
H1 2022
H1 2021
Growth in
constant FX
Revenue
5,655
5,155
4%
11,344
9,655
12%
Cost of sales
-1,337
-1,180
10%
-2,702
-2,244
19%
Gross profit
4,318
3,975
2%
8,642
7,410
10%
Gross margin
76.4%
77.1%
-0.8pp
76.2%
76.8%
-0.6pp
OPERATING EXPENSES
Total operating expenses was DKK 3,069 million in Q2 2022, up 10% in constant foreign exchange rates vs Q2 2021.
Marketing expenses increased 11% in constant foreign exchange rates vs Q2 2021, as overall activity level is up
following the store closures in Q2 2021. As a share of revenue marketing expenses are up 1pp. The increase is the
result of a deliberate decision to spend more on marketing in an environment that is tougher than last year and
Pandora see increased competition for the same marketing spots. Furthermore, the share of revenue in Q2 2021 was
supported by the stimulus money in US, as the revenue came with little incremental marketing spend.
Sales and distribution expenses was up 15% in constant foreign exchange rates vs Q2 2021. In Q2 2021, Pandora
received government support and rent concessions of DKK 70 million. Pandora has not received any significant
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government support or rent concessions in Q2 2022. Adjusting for government and rent concessions, sales and
distribution expenses are up roughly 10% or DKK 150 million in constant foreign exchange rates. The increase is mainly
related to the expansion of the Pandora Owned store network.
Administrative expenses decreased by 9% in constant foreign exchange rates compared with Q2 2021. In Q2 2022
administrative expenses are lower than the run rate, however this is partly due to phasing between quarters.
Total operating expenses as a share of revenue in H1 2022 was down 0.3pp from H1 2021.
OPERATING EXPENSES
DKK million
Q2 2022
Q2 2021
Growth in
constant
FX
Share of
revenue
Q2 2022
Share of
revenue
Q2 2021
H1 2022
H1 2021
Growth in
constant
FX
Share of
revenue
H1 2022
Share of
revenue
H1 2021
Sales and distribution
expenses
-1,701
-1,402
15%
30.1%
27.2%
-3,461
-2,872
16%
30.5%
29.8%
Marketing expenses
-914
-784
11%
16.2%
15.2%
-1,659
-1,362
17%
14.6%
14.1%
Administrative expenses
-454
-488
-9%
8.0%
9.5%
-964
-972
-3%
8.5%
10.1%
Total operating expenses
-3,069
-2,673
10%
54.3%
51.9%
-6,083
-5,206
13%
53.6%
53.9%
FINANCIAL EXPENSES AND TAX
Net financials in Q2 2022 ended at a cost of DKK 27 million, related to interest on loans and IFRS 16 related interest
on lease payments, partly offset by net foreign exchange adjustments and losses on foreign exchange rate hedges of
DKK 46 million.
The effective tax rate ended at 23.5% for Q2 2022, in line with guidance of 23-24% for the full year 2022, and above
the Q2 2021 level mainly due to non-deductible costs in China and Panama (cluster head office for Latin America).
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CASH FLOW & BALANCE SHEET
Net working capital increases as the deliberate inventory build-up continues
The net working capital ended at 5.8% of the last 12 months revenue in Q2 2022 compared with -0.3% in Q2 2021
and 3.5% in Q1 2022. The increase was mainly driven by a deliberate inventory build-up. Pandora has deliberately
been increasing inventories during 2021 and continued this into the first half of 2022. This has been done to
accommodate supply chain risks related to the pandemic, reducing risk of stock-outs as well as to support revenue
growth. The higher inventories also impacts free cash flow negatively in Q2 2022. The inventories are now broadly at
the right level, but as part of normal seasonality ahead of the Q4 peak season, inventories will build up further during
Q3.
Trade receivables continue to be at a healthy level and in absolute amounts at same level as Q2 2021. Wholesale Days
Sales Outstanding (DSO) ended at 24 days, same as in Q2 2021. Total DSO, including retail receivables, ended at 11
days by the end of Q2 2022, which is 1 day less than Q2 2021.
Free cash flow incl. lease payments ended at DKK 0.5 billion corresponding to a cash conversion of 40% in Q2 2022.
The cash conversion was negatively impacted by the above mentioned inventory build-up and a higher CAPEX level,
as planned. CAPEX ended at 5.4% of revenue in Q2 2022 vs 2.7% in Q2 2021. Pandora expects CAPEX to increase
during the rest of 2022, targeting full year CAPEX at around 6% of revenue. The increase is a function of investments
into opening new stores, store refits, investments in new and existing production facilities and IT.
ROIC continue to be strong and ended at 46% in Q2 2022, up 2pp vs Q2 2021.
NET WORKING CAPITAL AS A SHARE OF THE LAST 12 MONTHS’ REVENUE
Share of preceding 12 months' revenue
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Inventories
16.9%
14.4%
12.8%
14.4%
11.8%
Trade receivables
2.6%
3.2%
4.3%
3.6%
3.2%
Trade payables
-9.5%
-10.2%
-14.0%
-11.0%
-10.3%
Other net working capital elements
-4.2%
-3.9%
-8.2%
-6.7%
-4.9%
Total
5.8%
3.5%
-5.0%
0.2%
-0.3%
Pandora has lifted EPS by 26% in the first half of 2022 vs first half of 2021 to DKK 20.5. This is driven by the solid
organic growth seen in the first half of 2022 of 11%.
Balance Sheet
Total non-current assets increased to DKK 13.5 billion at the end of Q2 2022 (Q2 2021: DKK 12.6 billion), mainly due
to an increase in deferred tax assets, higher CAPEX investment in property plant and equipment as well as slightly
higher right-of-use-assets as a result of new leases and lease renewals.
During the second quarter, Pandora improved the funding and liquidity position with a EUR 100 million eight-year
sustainability-linked loan from Nordic Investment Bank. Further, after Q2, Pandora secured a DKK 1.25 billion term
loan from Danske Bank which matures in March 2023. The new facilities diversify Pandora’s funding structure and
sources, and further strengthens the liquidity position.
By the end of Q2 2022, equity in Pandora amounted to DKK 5.6 billion compared to DKK 7.0 billion in 2021. The
decrease was primarily driven by payout of DKK 3.5 billion to its shareholders through a combination of dividends and
share buybacks, partly offset by the profit in H1 2022.
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FINANCIAL GUIDANCE
Guidance unchanged
Q2 performance was in line with the guidance and the expectations for the second half of 2022 remain unchanged.
As such, Pandora’s financial guidance for 2022 is unchanged with “organic growth of 4-6%” and “EBIT margin of 25-
25.5%”.
The macro-economic outlook is associated with elevated uncertainty.
The guidance is based on certain directional assumptions for organic growth, as illustrated below:
REVENUE GUIDANCE
The organic growth guidance can be illustrated as follows:
The guidance assumes no revenue related to Russia, Belarus and Ukraine since the outbreak of the war between Russia
and Ukraine and for the remainder of 2022.
The implied guidance for the second half of 2022 is -1% to +2% organic growth (12-16% vs H2 2019). The low end
of the guidance is more likely to materialize if a worsening of the macroeconomic environment occur in H2 2022.
Also, it should be noted that, similar to H2 2021, organic growth vs 2019 will expectedly be lower in Q3 2022 than in
Q4 2022.
* This only includes the part of forward integration where goodwill is paid (acquisitions)
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Pandora expects a shift in the sources of growth in the second half of 2022 compared to the first half. The Australian
market is expected to be a bigger source of growth in the second half of 2022, as they were negatively impacted by
COVID-19 in especially Q3 2021 seeing roughly 50% of stores temporarily closed. Also China is expected to continue
to be a drag in the second half, but less than in the first half. On the other hand, the European markets will be comping
on a “normal” second half of 2021 without major disruptions from COVID-19.
The guidance assumes around 2pp organic growth from network expansion (previously 1-2%), partially offset by
slightly lower sell-in growth to the partner channel in the second half.
PROFITABILITY GUIDANCE
The 2022 EBIT margin guidance of 25.0-25.5% is unchanged.
Pandora continues to see inflationary pressure across the value chain compared to 2021. At current levels, Pandora
still expects to mitigate these incremental costs within the EBIT margin guidance.
Current foreign exchange rates, if unchanged, are estimated to have a favourable impact on the EBIT margin in 2022
of approximately 1.0% vs 2021. This corresponds to a 20 basis point tailwind vs the original guidance assumptions.
Silver and gold prices, are expected to negatively impact the EBIT margin in 2022 with -1.0% (unchanged).
In line with previous years, Q4 2022 is expected to be the most profitable quarter of the year. Due to phasing on
both revenue and cost, the Q4 EBIT margin is expected to be relatively stronger than in 2021 and Q3 correspondingly
lower.
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2022 GUIDANCE - OTHER PARAMETERS
The guidance of 50-100 net concept store openings remains unchanged from previous guidance and excludes Russia
and Belarus. To give a more clear and consistent picture of the development in other points of sales, we have changed
the guidance to include Pandora owned other points of sales only. Pandora expects to open 75-100 owned and
operated other points of sales. CAPEX is unchanged from previous guidance and expected to end at around 6% share
of revenue following investments into opening new stores, store refits, investments in the production facilities in
Thailand and IT. The effective tax rate is expected to be 23-24%, up from 22-23% in prior years and unchanged from
previous guidance.
FOREIGN EXCHANGE AND COMMODITY ASSUMPTIONS AND IMPLICATIONS – As of July 29, 2022
Average 2021
Average 2022
2022 Y-Y
Financial Impact
USD/DKK
6.29
7.05
THB/DKK
0.20
0.20
GBP/DKK
8.65
8.85
CNY/DKK
0.98
1.07
AUD/DKK
4.72
4.99
Silver/USD (per ounce)
21.1
24.9
REVENUE (DKK million)
Approx. 1.300
EBIT (DKK million)
Approx. 350
EBIT margin (FX)
Approx. 1.0%
EBIT margin (Commodities)
Approx. -1.0%
CAPITAL STRUCTURE POLICY AND CASH DISTRIBUTION
At the end of June 2022, Pandora’s leverage was 1.0x NIBD to EBITDA, in the middle of the capital structure policy of
0.5-1.5x, and slightly up from 0.9x at the end of March 2022 and 0.4x at the end of December 2021. Pandora has
paid out DKK 3.5 billion to its shareholders year to date 2022, of which DKK 1.5 billion came from an ordinary dividend
of DKK 16 per share. The rest came from share buybacks. In total, Pandora plan to pay out DKK 5.3 billion to its
shareholders in 2022, equivalent to around 10% of market cap.
Pandora currently has a share buyback programme running under which Pandora will repurchase shares for an
aggregate maximum amount of DKK 3.3 billion. The programme will be concluded no later than 3 February 2023. The
purpose of the programme is to reduce Pandora’s share capital and to meet obligations arising from company
incentive programmes. In the beginning of April, Pandora reduced the Company’s share capital with a nominal amount
of DKK 4,500,000 by cancellation of 4,500,000 treasury shares of DKK 1. After reduction of the share capital, the
Company’s share capital is nominally DKK 95,500,000, divided into shares of DKK 1.
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SUSTAINABILITY
You find the company’s sustainability targets in our annual sustainability report on pandoragroup.com.
Our response to the war in Ukraine:
• We are shocked and saddened by the unprovoked attack on Ukraine, and our thoughts go to the people of
Ukraine, who are victims of this senseless act of military aggression. The war requires all businesses to act with
the utmost responsibility regarding any interactions or business dealings with Russia and Belarus.
• On February 24th, we ceased all business with Russia and Belarus. We also instructed all our suppliers and
business partners that no raw materials, products or services supplied to Pandora can come directly or
indirectly from Russia or Belarus.
• The business in Russia and Belarus was handled by local distributors. All business has since been written off
our books, and we no longer consider the distributors‘ stores part of Pandora.
• On February 27, the company donated USD 1 million to UNICEF's efforts to help children affected by the
humanitarian crisis.
• On March 30, we announced that we ended our 12-year membership with the trade association Responsible
Jewellery Council, RJC. The decision follows RJC’s failure to suspend Russian companies’ memberships and
responsible business certifications and urge its members to suspend business with Russia. Pandora had
previously requested that RJC take such actions.
• Pandora has over 800 employees in its Eastern Europe cluster including in Poland, Romania, Hungary, Slovakia.
Many are impacted by the war. We have offered financial and psychological support, training for people
managers, and additional days off for volunteering.
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OTHER EVENTS
New term loan from Danske Bank
After Q2, Pandora secured a DKK 1.25 billion term loan from Danske Bank. The new loan diversifies Pandora’s funding
structure and further strengthens the liquidity position while supporting future growth.
Acquisition of the Portuguese distributor
In June it was announced that Pandora acquired the store network in Portugal, one of the top markets in Western
Europe, and took over 34 locations from its distributor Visão do Tempo to assume full ownership of its Portuguese
business. Visão do Tempo introduced Pandora on the Portuguese market 16 years ago and today operates 25 concept
stores and nine shop-in-shops in the country. All 34 locations opened as Pandora owned and operated stores on the
20th of July. The acquisition supports Pandora’s Phoenix strategy that aims to drive growth through a number of
initiatives including strategic network expansion. By acquiring the network in Portugal, Pandora will also get better
control of its brand development and be able to build a superior omni-channel journey and improve its product
offering.
Opening of New York Hub
In July, it was announced that Pandora plan to open a New York Hub to bolster the US growth strategy. Pandora will
open an office in New York in September 2022. Located in Manhattan, the new hub will deploy as a temporary space
this fall, followed by a permanent space in the summer of 2023. The office will support approximately 150 full-time
corporate employees. A New York hub increases Pandora’s ability to recruit world class talent as the brand continues
its long-term growth ambition in the US market, which is to increase market share and double revenue in the US
compared to 2019. Pandora’s US business reached over DKK 7 billion in sales in 2021.
FINANCIAL CALENDAR 2022
The expected dates for publication of financial announcements in 2022 for Pandora A /S are as follows:
08 November 2022 Interim Financial Report for the third quarter/first nine months of 2022
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2022 YEAR-TO-DATE DEVELOPMENT
REVENUE
Total revenue increased by 12% in local currency to DKK 11,344million in H1 2022 compared with H1 2021. Organic
growth was 11% reflecting good underlying performance but also that H1 2021 was heavily impacted by COVID-19.
GROSS PROFIT AND COSTS
Gross profit was DKK 8,642 million in H1 2022 (DKK 7,410 million in H1 2021), resulting in a gross margin of 76.2% in
H1 2022 vs 76.8% in H1 2021.
Sales and distribution expenses increased to DKK 3,461 million in H1 2022 (DKK 2,872 million in H1 2021),
corresponding to 30.5% of revenue in H1 2022 (29.8% in H1 2021). The increase is the result of variable costs related
to the higher revenue, less government support and rent concessions received in H1 2022 as well the write-down of
a Russian trade receivable of DKK 55 million. Rent concessions and government support have been recognised in the
profit and loss statement under Sales and Distribution expenses.
Marketing expenses increased to DKK 1,659 million in H1 2022 (DKK 1,362 million in H1 2021), resulting in a share of
revenue of 14.6% in H1 2022 compared with 14.1% in H1 2021.
Administrative expenses are roughly flat ending at DKK 964 million in H1 2022 compared with DKK 972 million in H1
2021, corresponding to 8.5% of revenue in H1 2022 (10.1% in H1 2021).
EBIT
EBIT for H1 2022 was DKK 2,559 million, which is an increase of 16% vs H1 2021, resulting in an EBIT margin of 22.6%
in H1 2022 vs 22.8% in H1 2021.
NET FINANCIALS
Net financials amounted to a cost of DKK 37 million in H1 2022 vs a cost of DKK 113 million in H1 2021.
INCOME TAX EXPENSES
Income tax expenses were DKK 593 million in H1 2022 compared with DKK 471 million in H1 2021, implying an
effective tax rate for the Group of 23.5% for H1 2022 (22.5% in H1 2021).
NET PROFIT
Net profit in H1 2022 was DKK 1,929 million vs DKK 1,621 million in H1 2021.
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16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
22 | 37
CONTACT
CONFERENCE CALL
A conference call for investors and financial analysts will be held today at 11.00 CET and can be joined online at
www.pandoragroup.com. The presentation for the call will be available on the website before the call.
The following numbers can be used by investors and analysts:
DK: +45 78768490
SE: +46-4-0682-0620
UK: +44-203-7696819
US: +1 646-787-0157
PIN: 837462
Link to webcast: https://streams.eventcdn.net/pandora/2022q2/
ABOUT PANDORA
through more than 6,400 points of sale, including more than 2,400 concept stores.
Headquartered in Copenh agen , Den mark , Pandora employs 27,000 people worldwide and crafts its jewellery at two
LEED-certified facilities in Thailand using mainly recycled silver and gold. Pandora is committed to leadership in
sustainability and has set science-based targets to reduce greenhouse gas emissions by 50% across its own
operations and value chain by 2030. The company is listed on the Nasdaq Copenhagen stock exchange and
generated sales of DKK 23.4 billion (EUR 3.1 billion) in 2021.
For more information, please contact:
INVESTOR RELATIONS
John Bäckman
VP, Investor Relations & Treasury
+45 5356 6909
jobck@pandora.net
CORPORATE COMMUNICATIONS
Mads Twomey-Madsen
VP, Corporate Communications & Sustainability
+45 2510 0403
madt@pandora.net
Kristoffer Malmgren
Director, Investor Relations
+45 3050 1174
kram@pandora.net
Johan Melchior
Director, External Relations
+45 4060 1415
jome@pandora.net
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16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q22022 | COMPANY ANNOUNCEMENT No. 735 | page
23 | 37
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
DKK million
Notes
Q2 2022
Q2 2021
H1 2022
H1 2021
FY 2021
Revenue
3
Cost of sales
-1,337
-1,180
-2,702
-2,244
-5,590
Gross profit
Sales, distribution and marketing expenses
-2,615
-2,186
-5,120
-4,234
-9,939
Administrative expenses
-454
-488
-964
-972
-2,026
Operating profit
Finance income
Finance costs
-160
-86
-258
-195
-613
Profit before tax
Income tax expense
-287
-288
-593
-471
-1,218
Net profit for the period
Earnings per share, basic, DKK
Earnings per share, diluted, DKK
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million
Q2 2022
Q2 2021
H1 2022
H1 2021
FY 2021
Net profit for the period
Other comprehensive income:
Items that may be reclassified to profit/loss for the period
Exchange rate adjustments of investments in subsidiaries
-82
Fair value adjustment of hedging instruments
-337
-39
-157
-423
-417
Tax on other comprehensive income, hedging instruments,
income/expense
Items that may be reclassified to profit/loss for the period,
net of tax
-132
-110
-239
Items not to be reclassified to profit/loss for the period
Actuarial gain/loss on defined benefit plans, net of tax
Items not to be reclassified to profit/loss for the period, net
of tax
Other comprehensive income, net of tax
-132
-110
-239
Total comprehensive income for the period
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CONSOLIDATED BALANCE SHEET
DKK million
Notes
2022
30 June
2021
30 June
2021
31 December
ASSETS
Goodwill
9
Brand
Distribution
Other intangible assets
Total intangible assets
Property, plant and equipment
Right-of-use assets
10
Deferred tax assets
Other financial assets
Total non-current assets
Inventories
Trade receivables
7
Right-of-return assets
Derivative financial instruments
5,6
Income tax receivable
Other receivables
Cash
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Treasury shares
-1,690
-344
-3,416
Reserves
Retained earnings
Total equity
Provisions
Loans and borrowings
10
Deferred tax liabilities
Total non-current liabilities
Provisions
Refund liabilities
Contract liabilities
Loans and borrowings
10
Derivative financial instruments
5,6
Trade payables
Income tax payable
Other payables
Total current liabilities
Total liabilities
Total equity and liabilities
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Treasury
shares
Translation
reserve
Hedging
Reserve
Dividend
proposed
Retained
earnings
Total
equity
2022
Equity at 1 January
-3,416
-110
Net profit for the period
Other comprehensive income, net of tax
-122
Total comprehensive income for the period
-122
Share-based payments
-157
Purchase of treasury shares
-1,958
-1,958
Cancellation of treasury shares
-5
-3,481
Proposed dividend
-1,516
Dividend paid
-1,516
-1,514
Equity at 30 June
-1,690
-233
2021
Equity at 1 January
-93
Net profit for the period
Other comprehensive income, net of tax
-330
-9
-239
Total comprehensive income for the period
-330
Share-based payments
Purchase of treasury shares
-252
-252
Proposed dividend
-498
Dividend paid
-498
-498
Equity at 30 June
-344
-115
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CONSOLIDATED STATEMENT OF CASH FLOW
1
Cash comprises cash at bank and in hand.
The above cannot be derived directly from the income statement and the balance sheet.
DKK million
Notes
Q2 2022
Q2 2021
H1 2022
H1 2021
FY 2021
Operating profit
Depreciation and amortisation
Share-based payments
Change in inventories
-594
-183
-948
-538
-799
Change in receivables
-77
Change in payables and other liabilities
-267
-2,078
-1,424
Other non-cash adjustments
-26
-29
-26
Interest etc. received
Interest etc. paid
-98
-47
-198
-108
-468
Income taxes paid
-219
-94
-952
-249
-832
Cash flows from operating activities, net
-183
Acquisitions of subsidiaries and activities, net of cash acquired
8
-2
-293
-14
-66
Purchase of intangible assets
-75
-76
-140
-126
-289
Purchase of property, plant and equipment
-198
-39
-297
-99
-296
Change in other non-current assets
-3
Proceeds from sale of property, plant and equipment
Cash flows from investing activities, net
-277
-111
-723
-228
-631
Dividend paid
-498
-1,514
-498
-1,479
Dividend paid – withholding tax
-345
Purchase of treasury shares
-719
-252
-1,958
-252
-3,325
Proceeds from loans and borrowings
Repayment of loans and borrowings
-273
-2,975
-273
-3,004
-3,004
Repayment of lease commitments
-245
-243
-519
-470
-991
Cash flows from financing activities, net
-370
-2,110
-2,366
-7,484
Net increase/decrease in cash
-635
-73
-1,324
-1,887
Cash at beginning of period
1
Exchange gains/losses on cash
Net increase/decrease in cash
-635
-73
-1,324
-1,887
Cash at end of period
1
Cash flows from operating activities, net
928
1,586
-183
1,270
6,228
- Interests etc. received
-1
-1
-2
-1
-3
- Interests etc. paid
98
47
198
108
468
Cash flows from investing activities, net
-277
-111
-723
-228
-631
- Acquisition of subsidiaries and activities, net of cash acquired
2
-
293
14
66
Free cash flow excl. lease payments
751
1,522
-417
1,163
6,128
Free cash flow incl. lease payments
506
1,278
-936
693
5,137
Unutilised committed credit facilities
1,674
5,205
1,674
5,205
6,023
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ACCOUNTING NOTES
NOTE 1 – Accounting policies
The unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34
‘Interim Financial Reporting’ as issued by the International Accounting Standards Board (IASB) and adopted by the
European Union and additional Danish disclosure requirements for interim financial reporting of listed companies.
The accounting policies applied are consistent with the accounting policies set out in the Annual Report 2021.
Due to rounding, numbers presented throughout this report may not add up precisely to the totals and percentages
may not precisely reflect the absolute figures.
Pandora presents financial measures in the interim financial report that are not defined according to IFRS. Pandora
believes that these non-GAAP measures provide valuable information to investors and Pandora’s management when
evaluating performance. Since other companies might calculate these differently from Pandora, they may not be
comparable to the measures used by other companies. These financial measures should therefore not be considered
a replacement for measures defined under IFRS. For the definitions of other alternative performance measures used
by Pandora which are not defined by IFRS, refer to note 5.6 in the consolidated financial statements in the Annual
Report 2021.
New standards, interpretations and amendments adopted by Pandora
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 beginning on 1 January 2022. The implementation of these new or amended
standards and interpretations had no material impact on the financial statements for the period.
NOTE 2 – Significant accounting estimates and judgements
In preparing the condensed consolidated interim financial statements, Management makes various accounting
estimates and assumptions, which form the basis of presentation, recognition and measurement of Pandora’s assets
and liabilities.
All significant accounting estimates and judgements are consistent with the description in the Annual Report 2021
to which we refer.
Due to the Russian invasion in Ukraine, Pandora has assessed the impact of the overall uncertainty on both markets.
As Pandora had limited presence in both markets and exited the Russia and Belarus markets earlier in 2022, the
impact on the financial statements is insignificant.
NOTE 3 – Segment and revenue information
Pandora's activities are segmented into two reportable segments, each responsible for the end-to-end performance
of products. One includes Moments, while the other covers newer collections and innovations.
The two operating segments include all channels relating to the distribution and sale of Pandora products.
The non-unit driven revenue, comprising mainly of franchise fees, is allocated to the different revenue categories
proportionately.
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Management monitors the profitability of the operating segments separately for the purpose of making decisions
about resource allocation and performance management. Segment results are measured at gross profit as presented
in the table below.
SEGMENT INFORMATION
DKK million
Moments incl.
Collabs
Style
Group
Q2 2022
Revenue
4,223
1,432
5,655
Cost of sales
-1,047
-290
-1,337
Gross profit
3,176
1,142
4,318
Operating expenses
-3,069
Consolidated operating profit (EBIT)
1,249
Profit margin (EBIT margin)
22.1%
Q2 2021
1
Revenue
3,722
1,433
5,155
Cost of sales
-881
-299
-1,180
Gross profit
2,841
1,134
3,975
Operating expenses
-2,673
Consolidated operating profit (EBIT)
1,301
Profit margin (EBIT margin)
25.2%
DKK million
Moments incl.
Collabs
Style
Group
H1 2022
Revenue
8,420
2,924
11,344
Cost of sales
-2,104
-598
-2,702
Gross profit
6,316
2,326
8,642
Operating expenses
-6,083
Consolidated operating profit (EBIT)
2,559
Profit margin (EBIT margin)
22.6%
H1 2021
1
Revenue
6,973
2,682
9,655
Cost of sales
-1,676
-568
-2,244
Gross profit
5,297
2,113
7,410
Operating expenses
-5,206
Consolidated operating profit (EBIT)
2,204
Profit margin (EBIT margin)
22.8%
1
The ‘Garden’ collection has been re-allocated from Style to Moments incl. Collabs in Q2 2021. Comparative figures for Q1 2021 were restated accordingly.
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REVENUE BY SEGMENTS
DKK million
Q2 2022
Q2 2021
1
Sell-out
growth
vs 2021
Local
currency
growth
Share of
Revenue
H1 2022
H1 2021
1
Sell-out
growth
vs 2021
Local
currency
growth
Share of
Revenue
Moments incl. Collabs
4,223
3,722
4%
8%
75%
8,420
6,973
11%
16%
74%
- Moments
3,680
3,376
1%
4%
65%
7,281
6,242
8%
12%
64%
- Collabs
543
346
34%
48%
10%
1,138
732
38%
49%
10%
Style
1,432
1,433
-4%
-5%
25%
2,924
2,682
3%
4%
26%
- Timeless
895
886
-7%
-4%
16%
1,840
1,712
-1%
3%
16%
- Signature
368
447
-13%
-22%
7%
764
811
-5%
-10%
7%
- Me
159
82
72%
87%
3%
301
140
95%
109%
3%
- Diamonds by Pandora
10
18
-22%
-47%
0%
19
18
59%
0%
0%
Total revenue
5,655
5,155
2%
4%
100%
11,344
9,655
9%
12%
100%
1
The ‘Garden’ collection has been re-allocated from Style to Moments incl. Collabs in Q2 2021. Comparative figures for Q1 2021 were restated accordingly.
Goods transferred at a point in time
5,638
5,138
11,310
9,623
Services transferred over time
17
17
34
32
Total revenue
5,655
5,155
11,344
9,655
REVENUE DEVELOPMENT IN THE KEY MARKETS
DKK million
Q2 2022
Q2 2021
Sell-out
growth vs
2021
Growth in
local currency
H1 2022
H1 2021
Sell-out
growth vs
2021
Growth in
local currency
US
1,841
1,771
-10%
-8%
3,490
3,161
-6%
0%
China
179
390
-62%
-58%
433
671
-50%
-41%
UK
665
569
7%
15%
1,473
1,156
24%
23%
Italy
595
515
16%
15%
1,181
955
24%
24%
Australia
246
226
3%
3%
490
469
0%
2%
France
237
210
16%
13%
498
403
24%
23%
Germany
285
241
42%
18%
559
432
61%
29%
Total top-7 markets
4,048
3,922
-5%
-3%
8,125
7,248
3%
6%
Rest of Pandora
1,607
1,233
29%
27%
3,219
2,407
31%
31%
Total revenue
5,655
5,155
2%
4%
11,344
9,655
9%
12%
REVENUE BY CHANNEL
DKK million
Q2 2022
Q2 2021
Growth in
local currency
H1 2022
H1 2021
Growth in
local currency
Retail physical stores
1
3,003
2,177
32%
5,709
3,716
48%
Retail online stores
1,098
1,222
-16%
2,317
2,639
-17%
Wholesale and third-party distribution
1,554
1,756
-17%
3,318
3,300
-5%
Total revenue
5,655
5,155
4%
11,344
9,655
12%
1
Pandora does not own any of the premises (Land and buildings) where stores are operated. Pandora exclusively operates stores from leased premises.
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.
NOTE 4 – Seasonality of operations
Due to the seasonal nature of the jewellery business, higher revenue and profits are historically realised in the fourth
quarter.
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NOTE 5 – Financial risks
Pandora’s overall risk exposure and financial risks, including risks related to commodity prices, foreign currency, credit,
liquidity and interest rates, are described in the disclosures in note 4.4 in the consolidated financial statements in the
Annual Report 2021.
Net interest-bearing debt (NIBD), incl. capitalised leases amounted to DKK 7.9 billion at the end of Q2 2022 (Q1
2022: DKK 7.2 billion) corresponding to a financial leverage of 1.0x (Q1 2022: 0.9x). The increase in NIBD is mainly
driven by cash returns to shareholders (DKK 0.7 billion) and an increase in net working capital (DKK 0.6 billion).
Outstanding committed loan facilities (end of June 2022)
Available facilities
DKK million
Maturity date
Drawn amount
DKK million
Available
liquidity
Revolving Credit Facilities
7,067
April 2027
5,394
1,673
Term Loan
744
May 2030
744
0
Total
7,811
6,138
1,673
NOTE 6 – Derivative financial instruments
Derivative financial instruments are measured at fair value and in accordance with level 2 in the fair value hierarchy
(IFRS 13).
See note 4.5 to the consolidated financial statements in the Annual Report 2021.
NOTE 7 – Trade receivables
NOTE 8 – Business combinations
During the first half of 2022, Pandora took over 38 concept stores in US, Canada and Italy in 3 business combinations
(37 stores were taken over in Q1 2022 and 1 in Q2 2022). Net assets acquired mainly consist of store properties,
inventories and related liabilities. The total purchase price for the acquisitions was DKK 294 million. Based on the
purchase price allocations, goodwill was DKK 195 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 195
million is deductible for income tax purposes.
Cost relating to the acquisitions was immaterial and has been recognised as operating expenses in the income
statement.
Excluding the temporary drag on gross margin from inventory buybacks, contribution to Group revenue and net
earnings from acquisitions for the period 1 January – 30 June 2022 was DKK 162 million and DKK 59 million
respectively. On a pro forma basis, if the acquisitions had been effective from 1 January 2022, the impact on Group
revenue and net earnings for the period 1 January – 30 June 2022 would have been approximately DKK 189 million
and DKK 67 million.
DKK million
2022
30 June
2021
31 December
Receivables related to third-party distribution and wholesale
410
672
Receivables related to retail revenue sales
253
337
Total trade receivables
663
1,009
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ACQUISITIONS
DKK million
H1 2022
FY 2021
Distribution rights
-
13
Property, plant and equipment
90
84
Inventories
80
34
Assets acquired
170
131
Non-current liabilities
43
50
Payables
2
-
Other current liabilities
27
27
Liabilities assumed
72
77
Total identifiable net assets acquired
98
54
Goodwill arising on the acquisitions
195
12
Purchase consideration
294
66
Cash movements on acquisitions:
Deferred payment (including earn-out)
-1
-
Cash acquired
0
-
Net cash flow on acquisitions
293
66
Business combinations after the reporting period
In July 2022, Pandora acquired the distribution in Portugal from the previous distributor, Visão do Tempo. The
acquisition comprised of inventories and non-current assets and liabilities relating to 34 stores. The total purchase
price was approximately DKK 99 million and the purchase price allocation has not been finalised at the time of the
reporting.
In July 2022, Pandora acquired 17 stores in the US. Net assets acquired mainly consists of inventory and non-current
assets and liabilities relating to the stores. The total purchase price was approximately DKK 184 million and the
purchase price allocations have not been finalised at the time of the reporting.
NOTE 9 – Goodwill
DKK million
2022
30 June
2021
31 December
Cost at 1 January
4,418
4,247
Acquisition of subsidiaries and activities in the period
195
12
Exchange rate adjustments
130
159
Cost at the end of the period
4,743
4,418
No impairment indication was identified based on the information regarding the market and the forecast. The latest
impairment test was carried out 31 December 2021 and the test confirmed a substantial headroom between the
carrying amount and the value in use. All the assumptions used are as described in the Annual Report 2021.
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NOTE 10 – Assets and liabilities related to leases
Amounts recognised in the balance sheet:
RIGHT-OF-USE ASSETS
DKK million
2022
30 June
2021
31 December
Property
2,683
2,507
IT
2
3
Cars
12
14
Other
7
8
Total right-of-use assets
2,704
2,532
Out of the total increase of DKK 0.2 billion in right-of-use-assets in the period 1 January – 30 June 2022, DKK 0.7
billion relates to renewals of lease contracts and new leases driven by network expansion and forward integration,
partially offset by a decrease of DKK 0.5 billion as a result of depreciation and currency exchange movement. The
development in right-of-use-assets is further affected by the timing of renewals of lease contracts and new leases
including the negotiation of more favourable leasing terms.
LEASE LIABILITIES
DKK million
2022
30 June
2021
31 December
Non-current
1,860
1,724
Current
932
886
Total lease liabilities
2,792
2,610
Lease liabilities are recognised in loans and borrowings in the balance sheet.
Amounts recognised in the income statement:
RECOGNISED DEPRECIATION ON RIGHT-OF-USE ASSETS CHARGED TO THE INCOME STATEMENT FOR THE PERIOD
DKK million
1 January –
30 June 2022
1 January –
30 June 2021
Property
533
533
IT
1
1
Cars
4
5
Other
2
2
Total depreciation on right-of-use assets for the period
540
540
OTHER ITEMS RELATING TO LEASES
DKK million
1 January –
30 June 2022
1 January –
30 June 2021
Interest expense
61
48
Total interest for the period
61
48
Costs recognised in the period for short term and low value leases were DKK 23 million (2021 H1: DKK 20 million).
Expenses are recognised on a straight line basis.
Total cash outflow relating to leases was DKK 776 million for 2022 (2021 H1: DKK 642 million). This comprises of
fixed lease payments in scope of IFRS 16 of DKK 519 million (2021 H1: DKK 470 million), variable lease payments of
DKK 173 million (2021 H1: DKK 104 million), interest paid of DKK 61 million (2021 H1: DKK 48 million) and short term
and low value leases of DKK 23 million (2021 H1: DKK 20 million). Payments related to variable leases and short term
and low value leases are not included in the lease liabilities.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q22022 | COMPANY ANNOUNCEMENT No. 735 | page
33 | 37
Due to COVID-19, repayment of certain fixed leases were negotiated and agreed with landlords and deferred by
approximately DKK 35 million in H1 2021. In addition, Pandora received rent concessions from landlords in H1 2021
amounting to DKK 42 million, which was recognised under Sales and Distribution expenses in the profit and loss
statement. Overall financing cash flow was positively impacted by DKK 77 million due to rent relief and rent deferrals
in H1 2021. The impact in 2022 is insignificant due to limited COVID-19 impact.
NOTE 11 – Trade payables
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 at 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 41 million at 30 June
2022 (DKK 13 million at 30 June 2021).
NOTE 12 – Contingent liabilities
Reference is made to note 5.1 to the consolidated financial statements in the Annual Report 2021.
NOTE 13 – Related parties
Related parties with significant interests
Other related parties of Pandora with significant influence include the Board and the Executive Management of this
Company and their close family members. Related parties also include companies in which the persons have control
or significant interests.
Transactions with related parties
Pandora did not enter into any significant transactions with members of the Board or the Executive Management,
except for compensation and benefits received because of their membership of the Board, employment with
Pandora or shareholdings in Pandora.
NOTE 14 – Store network, concept store development
1
Total concept stores
O&O concept stores
Number
of concept
stores
Q2 2022
Number
of concept
stores
Q1 2022
Number
of concept
stores
Q2 2021
Growth
Q2 2022
/ Q1 2022
Growth
Q2 2022
/Q2 2021
Number
of concept
stores
O&O
Q2 2022
Growth
O&O
stores
Q2 2022
/ Q1 2022
Growth
O&O
stores
Q2 2022
/Q2 2021
US
394
391
389
3
5
227
3
48
China
219
209
216
10
3
201
10
-1
UK
209
208
215
1
-6
189
13
48
Italy
145
146
145
-1
-
108
1
2
Australia
122
124
122
-2
-
42
-1
3
France
122
120
121
2
1
80
2
3
Germany
133
133
137
-
-4
130
-
-4
Total top-7 markets
1,344
1,331
1,345
13
-1
977
28
99
Rest of Pandora
2
1,103
1,101
1,105
2
-2
523
8
22
All markets
2,447
2,432
2,450
15
-3
1,500
36
121
1
Includes 7 key markets measured on revenue for FY 2021. All markets with 10 or more concept stores can be found in the Excel appendix uploaded on
www.pandoragroup.com.
2
As of Q1 2022, Pandora has excluded 153 concept stores related to Russia and Belarus. Pandora has also excluded 180 concept stores in the Q2 2021 comparison
figures related to Russia and Belarus.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q22022 | COMPANY ANNOUNCEMENT No. 735 | page
34 | 37
NOTE 15 – Commodity hedging
It is Pandora’s policy to hedge at least an average of 70% of the Group’s expected gold and silver consumption based
on a rolling 12-months production plan. The below table 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.
HEDGED AND REALISED PURCHASE PRICES (AT USE OF THE SILVER AND GOLD FOR PRODUCTION)
USD / OZ
Realised in
Q2 2022
Hedged
Q3 2022
Hedged
Q4 2022
Hedged
Q1 2023
Hedged
Q2 2023
Gold price
1,832
1,821
1,853
1,951
1,943
Silver price
24.45
23.84
23.39
24.06
22.73
Commodity hedge ratio, %
Realised
70-100%
70-90%
50-70%
30-50%
NOTE 16 – Subsequent events
As described in “Other events” in the Management review and in note 8 – Business Combinations, Pandora is not
aware of events after 30 June 2022, which are expected to materially impact the Group’s financial position.
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
35 | 37
QUARTERLY OVERVIEW
DKK million
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Financial highlights
Revenue
5,655
5,689
9,011
4,728
5,155
Organic growth, %
3%
21%
10%
14%
84%
Sell-out growth incl. temporarily closed stores, %
2%
17%
11%
5%
62%
Earnings before interests, tax, depreciations and
amortisations (EBITDA)
1,737
1,772
3,267
1,393
1,762
Operating profit (EBIT)
1,249
1,310
2,678
957
1,301
EBIT margin, %
22.1%
23.0%
29.7%
20.2%
25.2%
Net financials
-27
-10
-211
-137
-21
Net profit for the period
934
995
1,904
635
992
Financial ratios
Revenue growth, DKK, %
10%
26%
14%
16%
79%
Revenue growth, local currency, %
4%
22%
11%
15%
85%
Gross margin, %
76.4%
76.0%
75.7%
75.5%
77.1%
EBITDA margin, %
30.7%
31.1%
36.3%
29.5%
34.2%
EBIT margin, %
22.1%
23.0%
29.7%
20.2%
25.2%
Effective tax rate, %
23.5%
23.5%
22.8%
22.5%
22.5%
Equity ratio, %
27%
28%
38%
40%
44%
NIBD to EBITDA, excl. restructuring costs
1
, x
1.0
0.9
0.4
0.5
0.4
Return on invested capital (ROIC)
1
, % of last 12 months EBIT
46%
49%
59%
48%
44%
Cash conversion incl. lease payments, %
40%
-110%
147%
53%
98%
Net working capital, % of last 12 months revenue
5.8%
3.5%
-5.0%
0.2%
-0.3%
Capital expenditure, % of revenue
5.4%
2.8%
2.4%
4.2%
2.7%
Stock ratios
Total payout ratio (incl. share buyback), %
77%
277%
143%
211%
76%
Consolidated balance sheet
Total assets
20,503
19,419
18,542
18,173
18,277
Invested capital
13,543
12,684
9,884
11,141
11,136
Net working capital
1,451
871
-1,181
50
-57
Net interest-bearing debt (NIBD), incl. capitalised leases
7,926
7,157
2,882
3,819
3,005
Equity
5,617
5,526
7,001
7,322
8,130
Consolidated statement of cash flow
Cash flow from operating activities
928
-1,111
4,073
885
1,586
Capital expenditure (CAPEX)
306
158
215
201
138
Capital expenditure, property, plant and equipment (CAPEX)
236
83
146
96
64
Free cash flow incl. lease payments
506
-1,442
3,941
502
1,278
1
Ratios are based on 12 months’ rolling EBITDA and EBIT, respectively.
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
36 | 37
MANAGEMENT STATEMENT
EXECUTIVE MANAGEMENT
BOARD
16 AUGUST 2022 | INTERIM FINANCIAL REPORT Q2 2022 | COMPANY ANNOUNCEMENT No. 735 | page
37 | 37
DISCLAIMER
This Company announcement 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 financial and operating results. Forward-looking 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
uncertainties that could cause the Company’s actual results to differ 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 reflect actual results, changes in assumptions or changes in other factors affecting such forward-
looking statements. Some important risk factors that could cause the Company’s actual results to differ 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), financial 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 differ materially from those contained in any forward-looking statement.
Accordingly, forward-looking statements should not be relied on as a prediction of actual results.
