Q3 2O22
INTERIM FINANCIAL REPORT
8 November 2022 | Company Announcement No. 751
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
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
2 | 37
EXECUTIVE SUMMARY
On track to deliver on the full year guidance
- Diamonds by Pandora well received in North America
Highlights
• Organic growth of 3% and sell-out growth of 1% vs Q3 2021 (13% organic growth vs Q3 2019)
• Phoenix strategy on track. Brand metrics remain strong, the core platform is growing while important steps to
build new platforms have been taken
• Pandora’s biggest product platform, Moments, delivered 2% sell-out growth vs Q3 2021
• Diamonds by Pandora was launched in North America on 25 August and reached 3% share of sell-out
• As expected, US was down 3% organically as the market is comping the unusual effects from last year’s
stimulus cheques. US delivered strong organic growth of 56% vs Q3 2019 - in line with last quarter
• UK and Australia delivered double digit organic growth vs Q3 2021. France continued to be impacted by lower
promotional activity. Germany remains healthy while Italy saw some signs of a weakening consumer sentiment
• After successful testing, Pandora has increased prices on selected items in North America, while remaining
affordable. Similar price increases (4% on average) was implemented globally in early Q4
• Network expansion drives 2% organic growth in the quarter at an average EBIT margin of 40%
• The gross margin was strong and increased 1.2pp vs Q3 2021. The EBIT margin in Q3 2022 was 18.6%. As
previously communicated, the Q4 2022 EBIT margin is expected to be stronger than last year
• Inventories deliberately increased ahead of peak season. The inventory composition remains very healthy
• Pandora plan to distribute DKK 5.3 billion to its shareholders in 2022, equal to around 13% of market cap
• Leverage remains low with NIBD to EBITDA at 1.1x. Pandora has a strong liquidity and funding position
Pandora confirms the guidance for 2022 of 4-6% organic growth and 25.0-25.5% EBIT margin. Trading in Q4 so far
has been in line with the Q3 performance and thereby in line with the upper end of the implied guidance range for
Q4. Pandora is assessing the impact of the recent fire at the European Distribution center. The initial assessment
suggests limited net financial impact. The macroeconomic outlook is associated with elevated uncertainty.
Alexander Lacik, President and CEO of Pandora, says:
“We continued our growth journey in the third quarter and are well prepared for peak trading in November-December
with an exciting product line-up. Our launch of Diamonds by Pandora is off to an encouraging start and new products
will be added to the platform to fuel holiday momentum. Despite macroeconomic and geopolitical uncertainty, the
shopping patterns of our consumers is so far largely unchanged. With strong financials and our position in affordable
gifting, we are well equipped to weather a potential recession and seize relevant investment opportunities, for
example to expand our store network. We are already now taking precautionary measures to ensure our profitability
should circumstances change.“
1
Sell-out growth include sell-out from all concept stores including partner owned, and Pandora online. Sell-out growth is a like-for-like KPI and includes stores which
have been operating for +12 months and stores which are temporarily closed due to COVID-19. Other points of sales are not included in sell-out growth.
DKK million
Q3 2022
Q3 2021
9M 2022
9M 2021
FY 2021
FY 2022
guidance
Revenue
5,263
4,728
16,607
14,383
23,394
Organic growth, %
3%
14%
8%
32%
23%
4-6%
Sell-out growth (like-for-like), %
1
1%
5%
6%
27%
20%
Operating profit (EBIT)
978
957
3,537
3,161
5,839
EBIT margin, %
18.6%
20.2%
21.3%
22.0%
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
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
3 | 37
FINANCIAL HIGHLIGHTS
DKK million
Q3 2022
Q3 2021
9M 2022
9M 2021
FY 2021
Financial highlights
Revenue
5,263
4,728
16,607
14,383
23,394
Organic growth, %
3%
14%
8%
32%
23%
Sell-out growth (like-for-like), %
1
1%
5%
6%
27%
20%
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
1,496
1,393
5,004
4,571
7,838
Operating profit (EBIT)
978
957
3,537
3,161
5,839
EBIT margin, %
18.6%
20.2%
21.3%
22.0%
25.0%
Net financials
-18
-137
-55
-250
-461
Net profit for the period
734
635
2,663
2,256
4,160
Financial ratios
Revenue growth DKK, %
11%
16%
15%
29%
23%
Revenue growth, local currency, %
5%
15%
10%
33%
24%
Gross margin, %
76.7%
75.5%
76.3%
76.3%
76.1%
EBITDA margin, %
28.4%
29.5%
30.1%
31.8%
33.5%
EBIT margin, %
18.6%
20.2%
21.3%
22.0%
25.0%
Effective tax rate, %
23.5%
22.5%
23.5%
22.5%
22.6%
Equity ratio, %
26%
40%
26%
40%
38%
NIBD to EBITDA
1.1
0.5
1.1
0.5
0.4
Return on invested capital (ROIC), % of last 12 months EBIT
42%
48%
42%
48%
59%
Cash conversion incl. lease payments, %
0%
53%
-26%
38%
88%
Net working capital, % of last 12 months revenue
8.8%
0.2%
8.8%
0.2%
-5.0%
Capital expenditure, % of revenue
6.9%
4.2%
5.0%
3.0%
2.7%
Stock ratios
Total pay-out ratio (incl. share buyback), %
108%
211%
160%
93%
115%
Dividend per share, proposed, DKK
-
-
-
-
16
Dividend per share, paid, DKK
-
5
16
10
15
Earnings per share, basic, DKK
7.8
6.4
28.5
22.7
42.1
Earnings per share, diluted, DKK
7.8
6.4
28.3
22.6
41.7
Consolidated balance sheet
Total assets
21,776
18,173
21,776
18,173
18,542
Invested capital
14,853
11,141
14,853
11,141
9,884
Net working capital
2,249
50
2,249
50
-1,181
Net interest-bearing debt (NIBD) incl. capitalised leases
9,174
3,819
9,174
3,819
2,882
Equity
5,679
7,322
5,679
7,322
7,001
Consolidated statement of cash flow
Cash flow from operating activities
542
885
359
2,155
6,228
Capital expenditure – total
364
201
828
426
641
Capital expenditure - property, plant and equipment
260
96
579
195
341
Free cash flow incl. lease payments
0
502
-936
1,195
5,137
1
Sell-out growth include sell-out from all concept stores including partner owned, and Pandora online. Sell-out growth is a like-for-like KPI and includes stores which
have been operating for +12 months and stores which are temporarily closed stores due to COVID-19. 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
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
4 | 37
BUSINESS UPDATE
Third quarter performance in line with guidance – ready for peak season
While the macro headwinds are growing around the globe, Pandora continues to execute on the Phoenix strategy and
perform in line with the upper end of the guidance. In Q3 2022, Pandora continued to drive its core platform,
Moments, while fuelling with more. During the quarter, underlying revenue growth month by month was unchanged
and Q4 trading so far is in line with the Q3 performance.
Pandora maintained the global promotional level in line with Q3 2021. After successfully reducing the promotional
level over the last couple of years – thereby indirectly increasing prices - Pandora has now implemented selected
price increases. Pandora has a well-articulated pricing strategy, where a key pillar is a commitment to offer affordable
jewellery. The entire pricing strategy is formulated in the shape of a Diamond. The adjustments made can be
characterised as ‘stretching’ the Diamond somewhat. Pandora has properly researched various price points and
assessed the elasticity and on this basis found opportunities to adjust the pricing on roughly 1/3 of the assortment.
It is important to stress that the opening price points are protected as well as the price on strategic items. This change
was rolled out in October, and it will take few months to fully analyse the impact. On average, prices were raised by
4% across the portfolio.
Pandora’s biggest product platform, Moments, delivered 2% sell-out growth vs Q3 2021. The performance was driven
by Collaborations, which had another strong quarter, up 24% vs Q3 2021. Growth was supported by the new Marvel
collaboration, but also other Disney classics including Winnie the Pooh was among the top performing products in Q3
2022.
Style had -2% sell-out growth vs Q3 2021. The growth was dragged down by mainly Signature. Pandora is not pleased
with the performance of Signature, as the new products introduced in the quarter fell short of expectations. Pandora
ME grew 125% vs Q3 2021, ending at 4% share of revenue in the quarter.
Launch of Diamonds by Pandora in North America
Pandora launched Diamonds by Pandora on 25 August across 269 Pandora stores in the US and Canada as well as
online. The US is the world’s largest market for lab-created diamond jewellery, estimated at around USD 1.2 billion
and around 10 times the size for the UK lab-created diamond jewellery market. The market is expected to continue
to grow, and lab-created diamonds are outpacing the diamond industry's overall growth. Pandora is pleased with the
launch in US and Canada so far, but also see a need to improve and adjust in certain areas. Total revenue in the quarter
ended at DKK 113 million, which include sell-in to the partner channel in connection with the launch.
Since launch, Diamonds by Pandora has captured 3% of total sell-out in North America. This equals nearly 5% share
of business in the 269 stores offering the collection. The top 80 stores had an average share of business of 9% while
bottom performing 80 stores had around 2%. Learning from the UK test launch, Pandora deliberately did not launch
Diamonds by Pandora in all stores, and has specifically chosen the individual stores for the US launch based on
potential. Pandora believes that learnings captured from the top 80 stores, can be used to strengthen sales in stores
performing less well.
Launch to date 16% share of revenue from Diamonds by Pandora has been generated online, which is below average
in the US trending around 20%. Rings continue to be the best performing category and data suggests that roughly
50% of transactions are generated by new consumers.
Pandora will add new products to the platform to fuel holiday momentum. This will include a 2.0 carat ring.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
5 | 37
REVENUE BY SEGMENT
DKK
million
Q3 2022
Q3 2021
Sell-out
growth
vs 2021
Share of
revenue
9M 2022
9M 2021
Sell-out
growth
vs 2021
Share of
Revenue
Moments incl. Collabs
3,743
3,325
2%
71%
12,163
10,299
8%
73%
- Moments
3,251
2,948
-1%
62%
10,532
9,190
5%
63%
- Collabs
492
377
24%
9%
1,631
1,109
33%
10%
Style
1,520
1,403
-2%
29%
4,444
4,085
2%
27%
- Timeless
749
722
-2%
14%
2,589
2,435
-2%
16%
- Signature
459
483
-20%
9%
1,223
1,294
-10%
7%
- ME
199
188
125%
4%
501
328
105%
3%
- Diamonds by Pandora
113
10
97%
2%
131
28
79%
1%
Total revenue
5,263
4,728
1%
100%
16,607
14,383
6%
100%
Personalising the consumer experience
Two of the bigger projects within the Personalisation growth pillar in the Phoenix strategy are the new store concept
called Evoke and the new loyalty Programme called My Pandora. Both projects are moving in accordance to plan.
Pandora has so far opened 23 Evoke test stores and more will be added in Q4 2022. Performance metrics are still
encouraging with sell-out growth trending better than the rest of the store portfolio.
Another element, which is key in Pandoras journey of personalising the consumer experience, is the use and leverage
of consumer data. Pandora has invested in systems, processes and integrations the last couple of years to become a
frontrunner within personalisation in the jewellery category. In 2022, a dedicated Personalisation function has been
established to drive this agenda forward. So far with promising results. By using existing consumer data, such as
engagement data from paid media and website behaviour, Pandora is able to target consumers directly with content
of their interest. As an example, Pandora can establish a cross-channel consumer centric journey, which feature
tailored content that matches the need of a gifter in all touch points with Pandora. From personalised marketing
content including gifting offers, to entering the Pandora website featuring gifting propositions. With this type of
personalised consumer journey, Pandora can bring relevant communication all year, without compromising existing
communication to self-purchasers and ultimately increase the addressable market throughout the year.
Pandora is in a strong position to manage an uncertain macro environment – pre-emptive cost measures taken
Pandora has so far seen limited shifts in consumer sentiment and Q3 2022 ended in line with the high end of the
guidance. Based on external data, such as weakening consumer sentiment, inflation and higher interest rates etc., the
macroeconomic headwinds are growing. At this point in time, Pandora mainly see signs of a weakening consumer in
Italy, where the conversion rate and units per transaction (UPT) has decreased slightly. Pandora is taking a number of
pre-emptive measures and should a recession scenario come into play, Pandora is in a strong position to manage
through:
- Due to the favorable margin structure, strong cash generation and low financial leverage, Pandora has a strong
starting point to manage through a potential period with weak demand. While prudent cost measures will
obviously be taken, the strong starting point enables the company to invest and accelerate during a recession
where relevant.
- Pandora has already initiated a number of measures preparing for a potential macroeconomic downturn.
These measures mainly include a range of cost actions and re-prioritisation of initiatives. But it also includes
more offensive measures such as potentially accelerating the profitable network expansion as access to the
desired locations opens up during a recession. Network expansion contributed 2% organic growth in Q3 2022
at an average EBIT margin of 40%.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
6 | 37
- Stress testing Pandora’s financials shows that even in a deep recession scenario, Pandora would still be highly
profitable and generate excess cash to be returned to shareholders. Year 2020, where the pandemic hit the
hardest, is a testimony to that. Fully variable expenses – on top of cost of goods sold which are almost 100%
variable - accounts for roughly 10% of revenue, and is mainly related to POS materials, variable rent, freight
costs and variable salary. Additionally, the majority of marketing expenses (approximately 15% of revenue)
can be adjusted with short notice.
- During 2022, inventories have increased DKK 2.2 billion, as planned. The majority of the inventory increase
relates to normal seasonality ahead of the Q4 peak season. Pandora stresses that the inventory remains
healthy and the company do not expect increased markdowns. Additionally, Pandora has – as previously
communicated – decided to mitigate the risk of potential future disruptions to the supply chain by adding a
“risk premium” to the inventory covering high runner products. Pandora expect to end the year with an
inventory level of around DKK 4 billion. This corresponds to a weeks of cover of around 30 weeks, 3 weeks up
from 27 by the end of 2021. The increase partly reflects the risk premium and partly a decision to increase
availability of individual SKU’s. Availability has a direct impact on conversion rates and thereby revenue.
Pandemic in Thailand
Pandora has for more than a year taken extraordinary measures in Thailand to protect both employees and
production. In 2022, Pandora has slowly seen the situation improve moving from 1,200 employees in COVID-19
related quarantine in March to around 600 in August and now none.
Performance metrics
When comparing vs Q3 2021, the performance needs to be interpreted with care as temporary store closures due
to COVID-19 distort the year over year performance. On average around 5% of the stores were temporarily closed
in Q3 2021, driven by Australia which had around 50% of the stores temporarily closed in Q3 2021. In Q3 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
Q3 2021 creating an elevated comparative base.
From Q1 2023, Pandora will include retail owned other points of sales in the sell-out growth KPI. This will enhance
overall transparency as a bigger portion of the store base will be captured in the KPI, increasing from around 80% of
sell-out to around 85%. The change will not have a meaningful impact on the consolidated KPI, as retail owned other
points of sales performance is relatively aligned to concept stores.
From Q1 2023 onwards, the company will not provide growth KPI’s vs 2019. As COVID-19 no longer impact numbers
to a material extent, Pandora will focus on year over year performance.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
7 | 37
REVENUE REVIEW
Double digit revenue growth
The revenue growth development can be illustrated as follows (supplementary comments follows below):
Q3 2022 growth composition vs Q3 2021
The Q3 2022 performance remained solid with 3% organic growth and 1% sell-out growth. The organic growth was
supported by network expansion contributing with 2% organic growth. Takeovers of franchise partners where no
goodwill was paid contributed 1% organic growth.
The performance in Q3 2022 continues to be negatively impacted by ceasing the business in Russia and Belarus,
accounting for roughly a 1% drag on organic growth. Other smaller items also impacted organic growth negatively,
such as, lower sell-in in Germany mainly driven by the unwinding of business with a partner selling Pandora’s jewellery
via Amazon.
Forward integration supported total revenue growth in local currency with 2% driven by store acquisitions, mainly in
the US. Foreign exchange rates was a net tailwind of 6%, and continues to be driven mainly by a strong US dollar,
partly offset by the weakening of the British pound, leading to a total revenue growth of 11% vs Q3 2021.
*Sell-out growth (like-for-like), 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
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
8 | 37
REVIEW OF REVENUE BY CHANNEL
Growth driven by physical stores as online business normalises
The growth composition between channels have changed compared to Q3 2021, partly due to temporarily store
closures last year due to COVID-19, which drove consumers from the physical network into the online channel.
Organic growth in the quarter is therefore driven by the physical network, as consumers returned to the physical
stores.
Online continued to perform strongly vs 2019 levels, landing Q3 2022 at an organic growth of around 75% vs Q3
2019. Year to date September, the online channel has delivered an organic growth of almost 110% vs 2019 – a
testimony to the step changes and investments, Pandora has made during the last couple of years.
Pandora operated other points of sale continued to grow strongly. New store openings in Latin America, where the
shop-in-shop store format fits well, and the cooperation with Macy’s in the US supports growth in this channel.
Organic growth in Pandora’s wholesale business was down -4% vs Q3 2021, while third-party distribution was down -
1%. 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 Q3 2022 and wholesale revenue
in Q3 2021. Franchise takeovers has in total contributed with DKK 60 million in net revenue converting from wholesale
to retail revenue. The sequential improvement in wholesale performance from Q2 2022 to Q3 2022, was supported
by the reopening of Australia. Australia is one of the larger franchise markets of Pandora, comping a Q3 2021 which
had temporarily closed stores due to COVID-19.
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 40% vs Q3 2021 driven by a strong performance in some of the Asian markets.
REVENUE DEVELOPMENT BY CHANNEL
DKK million
Q3 2022
Q3 2021
Organic
growth
vs Q3
2021
Share of
Revenue
9M 2022
9M 2021
Organic
growth
vs 9M
2021
Share of
Revenue
Pandora owned
1
retail
3,637
3,096
6%
69%
11,663
9,450
14%
70%
- of which concept stores
2,547
2,057
10%
48%
7,717
5,465
28%
46%
- of which online stores
829
873
-11%
16%
3,146
3,512
-15%
19%
- of which other points of sale
260
166
44%
5%
800
474
60%
5%
Wholesale
1,458
1,451
-4%
28%
4,430
4,415
-1%
27%
- of which concept stores
793
858
-8%
15%
2,393
2,459
-1%
14%
- of which other points of sale
665
592
3%
13%
2,038
1,956
-2%
12%
Third-party distribution
168
182
-1%
3%
514
518
0%
3%
Total revenue
5,263
4,728
3%
100%
16,607
14,383
8%
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
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
9 | 37
REVIEW OF NETWORK DEVELOPMENT
Pandoras network and reach is growing
Pandora has opened net 34 concept stores in Q3 2022 vs Q3 2021 and net 27 in Q3 2022. The store openings are
mainly in US and China and are part of Pandoras ambition to increase the overall footprint in these markets. The
expansion comes with a significant opportunity for further value creation. Pandora provided a deep dive into the
financials of network developments in its Q2 2022 Interim financial report in the section called Network expansion
supporting growth and margins.
Pandora expects net openings to reach 70-100 concept stores in 2022. Year to date, Pandora has opened net 20
concept stores.
In July, Pandora acquired the Portuguese distributor and has converted 25 concept stores and nine shop-in-shops
from third-party distribution stores to Pandora-owned stores in Q3 2022. The acquisition will add roughly DKK 100
million of revenue on a full year basis, converting third-party distributor revenue to retail revenue. Pandora also
acquired a franchise partner in the US, in which Pandora took back 13 concept stores in the Las Vegas area.
Pandora owned other points of sales increased by 152 vs Q3 2021. This is driven by mainly Latin America, which
contributes 91 of the openings, of which 65 is in Mexico. Additionally, Pandora took over a number of stores from El
Corte Ingles in Spain, transferring franchise owned other point of sales into retail points of sale. Other points of sales
within third-party-distribution is down 159 vs Q3 2021, of which 150 relates to the takeover of the Portuguese
distributor. These stores are now accounted for as either Pandora owned or franchise owned other points of sale.
Number of points of sale
1,3
Q3 2022
Q2 2022
Q3 2021
Growth
Q3 2022
/Q2 2022
Growth
Q3 2022
/Q3 2021
Concept stores
2,474
2,447
2,440
27
34
- of which Pandora owned
2
1,587
1,500
1,403
87
184
- of which franchise owned
588
618
710
-30
-122
- of which third-party distribution
299
329
327
-30
-28
Other points of sale
3,967
4,001
4,026
-34
-59
- of which Pandora owned
2
431
382
279
49
152
- of which franchise owned
3,204
3,141
3,256
63
-52
- of which third-party distribution
332
478
491
-146
-159
Total points of sale
6,441
6,448
6,466
-7
-25
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 excludes concept stores and other points of sales from third-party distribution related to Russia and Belarus, as the business is ceased.
Comparative figures for 2021 were restated accordingly.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
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08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
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REVIEW OF REVENUE BY KEY MARKET
Q3 revenue growth in line with plan. Signs of weaker consumer sentiment in Italy
Overall, Pandora is pleased with the performance in Q3 2022, which landed in line with the expectations laid out in
the guidance. Sell-out growth landed at 1%, broadly in line with Q2 2022 of 2%. Organic growth was 3% vs Q3 2021,
in line with Q2 2022 and corresponding to 13% vs Q3 2019. All key markets (except China) delivered positive organic
growth vs 2019 with US continuing to be the biggest contributor of growth. In Q3 2021, Pandora had 5% temporary
store closures due to COVID-19, driven by Australia.
Pandora US performed in line with expectations and delivered -3% organic growth and -9% sell-out growth vs Q3
2021, comping last year’s stimulus cheques. Organic growth was supported by the launch of Diamonds by Pandora.
Additionally, 19 concept stores were opened vs Q3 2021, of which 11 was opened in Q3 2022. Compared with 2019,
performance remained very strong with 56% organic growth.
On 13 July 2022, Pandora acquired 13 concept stores in Las Vegas. The acquisition is a key part of Pandora’s ambition
to further strengthen its presence on the west coast. In total, the acquisitions of franchise partners in the US added
5% revenue growth (DKK 70 million). This includes the impact from the acquisition of the franchise partner Ben Bridge
announced end of Q1 2022 (sell-out of around USD 50 million in 2019).
The UK market delivered a strong quarter with 5% sell-out growth and 13% organic growth vs Q3 2021. Pandoras
solid brand position combined with operational effectiveness and strong execution in stores all supported the solid
growth. Organic growth in Germany was negative, mainly driven by the unwinding of business with a partner selling
Pandora jewellery via Amazon. The underlying business remains healthy and Germany saw sell-out growth of 3% vs
Q3 2021, while organic growth vs 2019 ended at 35%. France delivered -1% sell-out growth and the performance
continues to be impacted by the promotional detox with 25 promotional days vs 43 days in Q3 2021 (67 days in Q3
2019).
Sell-out growth in Italy contracted by -5% and organic growth was -8%. In Q3 2022, Pandora has seen signs of
weakening consumer sentiment in Italy, with customers being more reluctant to spend and upselling becoming more
difficult. Retail metrics such as units per transaction (UPT) and conversion rates are decreasing, indicating that
consumers are squeezed. Traffic remained strong.
In China, COVID-19 continues to constraint people’s lives and our business. With scattered and lingering COVID-19
outbreaks and strict control policy the traffic continues to be severely impacted. Traffic into stores was down -62%
vs 2021. Pandoras online distribution warehouse in Shanghai was closed for six days in July and Pandora had multiple
stores closed or operating at reduced business hours during Q3 2022. Performance in China in Q3 2022 therefore
was weak with sell-out growth of -46% and organic growth of -37% vs Q3 2021, translating into -71% organic growth
vs Q3 2019. Therefore, the brand relaunch has been postponed until market conditions stabilise.
Australia delivered a strong quarter with 40% sell-out growth vs Q3 2021. This was in line with expectations as
Australia had around 50% temporary store closures throughout Q3 2021, thereby representing an easier comp. The
performance vs 2019 saw a sequential improvement from -8% in Q2 to +15% in Q3.
Pandora’s business outside of the seven key markets continues to grow and in Q3 2022 these markets delivered a
combined 17% sell-out growth vs Q3 2021.
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QUARTERLY REVENUE DEVELOPMENT BY KEY MARKET
DKK million
Q3 2022
Q3 2021
Sell-out growth
vs 2021
Organic growth
vs 2021
Share of
revenue
US
1,597
1,342
-9%
-3%
30%
China
162
233
-46%
-37%
3%
UK
717
637
5%
13%
14%
Italy
486
527
-5%
-8%
9%
Australia
246
170
40%
33%
5%
France
217
221
-1%
-2%
4%
Germany
254
280
3%
-9%
5%
Total top-7 markets
3,679
3,411
-4%
-2%
70%
Rest of Pandora
1,585
1,317
17%
15%
30%
Total revenue
5,263
4,728
1%
3%
100%
YEAR-TO-DATE REVENUE DEVELOPMENT BY KEY MARKET
DKK million
9M 2022
9M 2021
Sell-out growth
vs 2021
Organic growth
vs 2021
Share of
revenue
US
5,087
4,504
-7%
-3%
31%
China
594
904
-49%
-40%
4%
UK
2,190
1,793
17%
20%
13%
Italy
1,668
1,482
14%
12%
10%
Australia
736
639
10%
10%
4%
France
716
624
16%
15%
4%
Germany
813
712
37%
14%
5%
Total top-7 markets
11,803
10,659
1%
3%
71%
Rest of Pandora
4,804
3,725
26%
25%
29%
Total revenue
16,607
14,383
6%
8%
100%
For organic growth rates vs 2019, please refer to the Excel appendix uploaded on www.pandoragroup.com.
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PROFITABILITY
Strong profitability continues
While the reported EBIT margin is down roughly 1.6pp vs Q3 2021, as expected and previously communicated, the
underlying EBIT margin in Q3 2022 is slightly up vs Q3 2021, as illustrated above (directional indications).
In Q3 2021, the EBIT margin was impacted by a few non-recurring items. Pandora received DKK 24 million from
government support and rent concessions related to COVID-19, supporting the EBIT margin last year by 0.5pp.
Furthermore the EBIT margin was negatively impacted by a temporary drag from forward integration of 0.7pp. Finally,
the EBIT margin in Q3 2021 was positively impacted by 1) temporary staff savings in stores of 1pp and 2) net cost
phasing from Q3 2021 to Q4 2021 of 1pp. This was partially offset by 3) COVID-19 pre-cautionary measures in
Thailand of -1.2pp. In total these other temporary impacts benefitted the EBIT margin in Q3 2021 by 0.8pp.
In Q3 this year, the EBIT margin was temporarily dragged down by 1.4pp due to inventories bought back in connection
with forward integration. Compared to last year, the temporary net negative impact from forward integration was
0.7pp. Excluding the temporary headwind from forward integration, the EBIT margin in Q3 2022 would have been
20.0%.
Finally, rising commodity prices (mainly silver) lead to a headwind of around -0.7pp. This was almost fully offset by
favourable foreign exchange rate developments (mainly USD and THB) of around 0.5pp. In 2023, foreign exchange
rates and commodities become a net tailwind for Pandora based on current spot prices. In 2022, the average price
of silver in cost of goods sold is expected to land at USD 25/oz. At the current silver price of USD 19.2/oz (31
October), Pandora will see a tailwind of 1.8% on both gross margin and EBIT margin compared to full year 2022 when
current hedges mature.
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08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
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GROSS MARGIN
The gross margin ended at 76.7% corresponding to an improvement of 1.2pp vs Q3 2021. The gross margin was
supported by favourable channel mix with more sales coming through physical O&O stores as well as overall
efficiencies in the production. The gross margin improved despite 0.7pp headwind from increased silver prices. Silver
prices were realised at an average price of USD 23.8 per ounce in the quarter.
The COVID-19 risk mitigating measures associated with the production in Thailand represented a significant 1.2pp
headwind in Q3 2021. In Q3 2022, the direct costs associated with COVID-19 in Thailand were limited and thus
constituted a net tailwind vs Q3 2021. The gross margin was additionally impacted by a temporary drag from
inventory buybacks of around 1.4pp, resulting in a 0.7pp headwind year-over-year, due to take-over of inventory at
wholesale value in connection with forward integration.
GROSS MARGIN AND GROSS PROFIT
DKK million
Q3 2022
Q3 2021
Growth in
constant FX
9M 2022
9M 2021
Growth in
constant FX
Revenue
5,263
4,728
5%
16,607
14,383
10%
Cost of sales
-1,227
-1,158
0%
-3,928
-3,402
12%
Gross profit
4,037
3,571
6%
12,679
10,981
9%
Gross margin
76.7%
75.5%
1.2pp
76.3%
76.3%
0.0pp
OPERATING EXPENSES
Total operating expenses were DKK 3,059 million in Q3 2022, up 11% in constant foreign exchange rates vs Q3 2021
and in line with expectations. As previously communicated, the OPEX to revenue ratio was expected to be above last
year in Q3 and is expected to be below in Q4.
Sales and distribution expenses increased by 15% in constant foreign exchange rates vs Q3 2021. In Q3 2021,
Pandora received DKK 24 million in government subsidies and rent concessions, and temporary savings from
extraordinary vacancies in stores amounted to roughly DKK 50 million in Q3 2021. Additionally, a phasing of
investment from Q3 2021 to Q4 2021 following Programme NOW savings also benefitted the EBIT margin in Q3
2021. Adjusting for the above, Sales and distribution expenses increased by a high-single-digit percentage vs Q3
2021 mainly driven by the expansion of the Pandora owned physical store network.
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Administrative expenses were up 26% in constant foreign exchange rates vs Q3 2021. As mentioned in Q2 2022,
Administrative expenses were impacted by a phasing between quarters, which accounted for almost half of the
increase in Administrative expenses in Q3 2022. The phasing of investments following program NOW in 2021 also
had a temporary positive impact on Administrative expenses in Q3 2021.
Marketing expenses decreased mainly due to the marketing push in Q3 2021 in connection with the global re-launch
of Pandora ME.
OPERATING EXPENSES
DKK million
Q3
2022
Q3
2021
Growth in
constant FX
Share of
revenue
Q3 2022
Share of
revenue
Q3 2021
9M
2022
9M
2021
Growth in
constant
FX
Share of
revenue
9M 2022
Share of
revenue
9M 2021
Sales and distribution
expenses
-1,723
-1,418
15%
32.7%
30.0%
-5,184
-4,290
15%
31.2%
29.8%
Marketing expenses
-760
-752
-4%
14.4%
15.9%
-2,418
-2,114
9%
14.6%
14.7%
Administrative expenses
-576
-444
26%
10.9%
9.4%
-1,540
-1,416
6%
9.3%
9.8%
Total operating expenses
-3,059
-2,614
11%
58.1%
55.3%
-9,142
-7,820
12%
55.0%
54.4%
FINANCIAL EXPENSES AND TAX
Net financials in Q3 2022 ended at a cost of DKK 18 million and was driven by IFRS 16 related interest on lease
payments and interests on loans. This was partly offset by favourable foreign exchange rate adjustments on
intercompany balances with Pandora US.
The effective tax rate ended at 23.5% for Q3 2022, in line with the guidance of 23-24% for the full year 2022, and
above the Q3 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 inventories are built ahead of peak season
The net working capital ended at 8.8% of the last 12 months revenue in Q3 2022 compared with 0.2% in Q3 2021
and 5.8% in Q2 2022. The increase was mainly driven by a continued deliberate inventory build-up, which has been
planned since the low point at the end of 2020. As previously communicated, there was a need to accommodate
supply chain risks related to the pandemic, reducing risk of stock-outs as well as to support revenue growth. As part
of normal seasonality, inventory levels also peaks in Q3 and then drop again in Q4. Overall, Pandora do not see a need
to increase inventories further, but rather expect a stable or even lower inventory level in the upcoming quarters
assuming that the pandemic do not worsen again.
Trade receivables continue to be at a healthy level and in absolute amounts up slightly (DKK 79 million) vs Q3 2021.
Wholesale Days Sales Outstanding (DSO) ended at 34 days, vs 33 days in Q3 2021. Total DSO, including retail
receivables, ended at 15 days by the end of Q3 2022, same as in Q3 2021.
Free cash flow incl. lease payments ended at DKK 0 billion corresponding to a cash conversion of 0% in Q3 2022. The
cash conversion was negatively impacted by the above mentioned inventory build-up and a higher CAPEX level, as
planned. CAPEX ended at 6.9% of revenue in Q3 2022 vs 4.2% in Q3 2021. Year-to-date CAPEX landed at 5.0%. The
increase vs last year is a function of investments in opening new stores, store refits, investments in new and existing
production facilities and Digital.
ROIC continue to be strong and landed Q3 2022 at 42% vs 48% in Q3 2021. The decrease was mainly a function of a
higher invested capital due to the before mentioned inventory build-up.
NET WORKING CAPITAL
Share of preceding 12 months' revenue
Q3 2022
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Inventories
20.1%
16.9%
14.4%
12.8%
14.4%
Trade receivables
3.4%
2.6%
3.2%
4.3%
3.6%
Trade payables
-10.4%
-9.5%
-10.2%
-14.0%
-11.0%
Other net working capital elements
-4.3%
-4.2%
-3.9%
-8.2%
-6.7%
Total
8.8%
5.8%
3.5%
-5.0%
0.2%
Pandora has lifted EPS by 25% in the nine months of 2022 vs first nine months of 2021 to DKK 28.5.
Balance Sheet
Total non-current assets increased to DKK 14.3 billion at the end of Q3 2022 (Q3 2021: DKK 12.6 billion), mainly due
to an increase in goodwill. The acquisitions of franchise partners in the US, as well as the Portuguese distributor has
increased goodwill by roughly DKK 0.4 billion, and foreign exchange rate adjustments drove an additional increase in
goodwill of 0.2 DKK billion. Furthermore the increase is driven by deferred tax assets, higher CAPEX in property plant
and equipment as well as slightly higher right-of-use-assets as a result of new leases and lease renewals.
By the end of Q3 2022, equity in Pandora amounted to DKK 5.7 billion compared to DKK 7.3 billion in 2021. The
decrease was primarily driven by payout of DKK 4.3 billion to the shareholders through a combination of dividends
and share buybacks, partly offset by profit generated in the period.
NIBD increased DKK 5.4 billion vs Q3 2021, mainly driven by funding of cash returns to shareholders and higher
inventory.
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08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
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FINANCIAL GUIDANCE
Guidance confirmed
Pandora confirms the guidance for 2022 of 4-6% organic growth and 25.0-25.5% EBIT margin. Both the second and
third quarter of 2022 ended in line with the high end of the guidance. The low end of the guidance assumes that the
trading conditions worsens during the remaining part of 2022. The macro-economic outlook is associated with
elevated uncertainty and Pandora continues to expect certain headwinds from COVID-19 in China.
As mentioned under “Other events” below, Pandora’s European distribution center was affected by a fire on 30
October. Given that peak season is coming up, the speed of re-establishing operations in the facility is of essence,
and every day counts. Assuming that the distribution is back to normal operations in 3-4 weeks, counting from 30
October, Pandora expects some, but manageable financial impact in Q4 2022 and still within the financial guidance.
REVENUE GUIDANCE
The organic growth guidance can be illustrated as follows:
During the year, Pandora has shared a table with the underlying guidance assumptions for 2022. While Pandora still
expects to land within the ranges and assumptions disclosed in the Interim Financial Report Q2 2022 (ref table
below), the implicit Q4 2022 ranges obviously becomes quite wide. For the US specifically, the low end of the range
(“negative high single digit”) no longer seems likely.
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The implied guidance for Q4 2022 is -3% to +2% organic growth (11-17% vs Q4 2019). Pandora is currently trading
in the upper end of the implied guidance range.
The guidance assumes that network expansion will drive 3% organic growth, up from 2% previously, offset by slightly
lower expected sell-in to partners.
PROFITABILITY GUIDANCE
Pandora also confirms the 2022 EBIT margin guidance of 25.0-25.5%.
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 2022 EBIT margin is expected be relatively stronger than last year.
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 original EBIT margin guidance.
Current foreign exchange rates, if unchanged, are estimated to have a favourable impact on the EBIT margin in 2022
of approximately 0.8% vs 2021. This corresponds to a 20 basis point headwind vs the previous guidance assumptions,
driven by a weaker British pound slightly offset by a stronger US dollar. Silver and gold prices, are expected to
negatively impact the EBIT margin in 2022 with -1.0% (unchanged).
2022 GUIDANCE - OTHER PARAMETERS
Pandora expects to open net 70-100 concept stores, adjusted from previously 50-100. This excludes the stores
closed in Russia and Belarus. Pandora furthermore expects to open 100-125 owned and operated other points of
sales (previously 75-100).
CAPEX expectation is changed from previous guidance of 6% of revenue to around 5% of revenue. The decrease is
mainly a reflection of lower CAPEX related to the store network and manufacturing. The effective tax rate is expected
to be 23-24%, up from 22-23% in prior years and unchanged from previous guidance.
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FOREIGN EXCHANGE AND COMMODITY ASSUMPTIONS AND IMPLICATIONS – As of October 30, 2022
Average 2021
Average 2022
2022 Y-Y
Financial
Impact
USD/DKK
6.29
7.13
THB/DKK
0.20
0.20
GBP/DKK
8.65
8.75
CNY/DKK
0.98
1.05
AUD/DKK
4.72
4.91
Silver/USD (per ounce)
21.1
25.0
REVENUE (DKK million)
Approx. 1.300
EBIT (DKK million)
Approx. 300
EBIT margin (FX)
Approx. 0.8%
EBIT margin (Commodities)
Approx. -1.0%
CAPITAL MARKETS DAY SEPTEMBER 2021 - FINANCIAL TARGETS
Pandora hosted a Capital Markets Day in September 2021 and provided the following financial targets:
• 5-7% organic growth CAGR from 2021 to 2023
• 25-27% EBIT margin in 2023
Since the targets were communicated, the geopolitical and macroeconomic situation has worsened significantly.
Additionally, China continues to be impacted by COVID-19 restrictions. At this point in time, the targets remain
unchanged but the outlook is obviously associated with elevated uncertainty. As mentioned above, Pandora is already
taking certain pre-emptive cost measures to support the EBIT margin in 2023.
CAPITAL STRUCTURE POLICY AND CASH DISTRIBUTION
At the end of September 2022, Pandora’s leverage was 1.1x NIBD to EBITDA, in the middle of the capital structure
policy of 0.5-1.5x, and slightly up from 1.0x at the end of June 2022 and 0.4x at the end of December 2021. Pandora
has paid out DKK 4.3 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 13% 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. As per 4 November 2022 Pandora have purchased 4,522,288 shares under the programme at
a value of DKK 2.3 billion, resulting in a total of 4,912,872 treasury shares, corresponding to 5.1% of the Company’s
share capital.
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SUSTAINABILITY
• On February 24th, we ceased all business with Russia and Belarus. We also instructed all our suppliers and
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OTHER EVENTS
As communicated in Company Announcements no. 746 and no. 747, on 30 October 2022 Pandora’s European
distribution center in Hamburg, Germany, was affected by a fire. Fortunately, no people were injured. The jewellery
inventory is intact, and we expect that the distribution operations will be normalized within a few weeks. Online sales
remain unaffected through external distribution partners. The physical Pandora stores in Europe hold inventory to
reasonably sustain sales until the European distribution center is fully operational again.
Given that peak season is coming up, the speed of re-establishing operations in the European distribution center is
of essence, and every day counts. Assuming that the distribution is back to normal operations in 3-4 weeks, counting
from 30 October, Pandora expects some but limited financial impact in Q4 2022 and still within the financial guidance.
Pandora is actively and constructively engaging with its all-risk and business interruption insurers.
Other than the fire, no subsequent events have occurred after the balance sheet date that require adjustment to or
disclosure in the consolidated financial statements.
FINANCIAL CALENDAR 2023
The expected dates for publication of financial announcements in 2023 for Pandora A/S are as follows:
08 February 2023 Annual report 2022
08 February 2023 Sustainability report 2022
16 March 2023 Annual General Meeting
03 May 2023 Interim Financial Report for the first quarter of 2023
15 August 2023 Interim Financial Report for the second quarter/first six months of 2023
08 November 2023 Interim Financial Report for the third quarter/first nine months of 2023
Any shareholder who proposes business to be transacted at the Annual General Meeting on Thursday 16 March 2023
must submit the proposal(s) to the Board of Directors’Secretariat no later than Wednesday 1 February 2023.
Proposal(s) must be sent by letter to Pandora A/S, Board of Directors’Secretariat att.: Peter Ring, Havneholmen 17-
19, DK-1561 Copenhagen V, Denmark or by email to legal@pandora.net
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2022 YEAR-TO-DATE DEVELOPMENT
REVENUE
Total revenue increased by 10% in local currency to DKK 16,607 million in Q3 YTD 2022 compared with Q3 YTD 2021.
Organic growth was 8% reflecting healthy underlying performance but also a first half of 2021 that was heavily
impacted by COVID-19.
GROSS PROFIT AND COSTS
Gross profit was DKK 12,679 million in Q3 YTD 2022 (DKK 10,981 million in Q3 YTD 2021), resulting in an unchanged
gross margin of 76.3% in Q3 YTD 2022 vs 76.3% in Q3 YTD 2021.
Operating expenses increased to DKK 9,142 million in Q3 YTD 2022 (DKK 7,820 million in Q3 YTD 2021),
corresponding to 55.0% share of revenue in Q3 YTD 2022 (54.4% Q3 YTD 2021). The increase is driven by foreign
exchange, costs related to network expansion and variable costs related to higher revenue, less government support
and rent concession received in Q3 YTD 2022, as well as the write-down of a trade receivable towards the Russian
distributor of around DKK 55 million. Rent concessions and government support have been recognised in the profit
and loss statement under Sales and Distribution expenses.
EBIT
EBIT in Q3 YTD 2022 was DKK 3,537 million, which is an increase of 12% vs Q3 YTD 2021, resulting in an EBIT margin
of 21.3% in Q3 YTD 2022 vs 22.0% in Q3 YTD 2021.
NET FINANCIALS
Net financials amounted to a cost of DKK 55 million in Q3 YTD 2022 vs a cost of DKK 250 million in Q3 YTD 2021.
Foreign exchange rate fluctuations in 2022, and in particular a strong US dollar, have had a positive impact on net
financials due to non-cash revaluations of intercompany balance sheet items in foreign currencies.
INCOME TAX EXPENSES
Income tax expenses were DKK 818 million in Q3 YTD 2022 compared with DKK 655 million in Q3 YTD 2021, implying
an effective tax rate for the Group of 23.5% in Q3 YTD 2022 (22.5% in Q3 YTD 2021).
NET PROFIT
Net profit in Q3 YTD 2022 was DKK 2,663 million vs DKK 2,256 million in Q3 YTD 2021.
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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:
Link to webcast: https://streams.eventcdn.net/pandora/2022q3/
ABOUT PANDORA
through more than 6,400 points of sale, including more than 2,400 concept stores.
Headquartered in C openh agen , Denmark , Pand ora 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
VP, Media Relations & Public Affairs
+45 4060 1415
jome@pandora.net
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08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
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FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
DKK million
Notes
Q3 2022
Q3 2021
9M 2022
9M 2021
FY 2021
Revenue
3
Cost of sales
-1,227
-1,158
-3,928
-3,402
-5,590
Gross profit
Sales, distribution and marketing expenses
-2,483
-2,170
-7,602
-6,404
-9,939
Administrative expenses
-576
-444
-1,540
-1,416
-2,026
Operating profit
Finance income
Finance costs
-109
-189
-367
-384
-613
Profit before tax
Income tax expense
-226
-184
-818
-655
-1,218
Net profit for the period
Earnings per share, basic, DKK
Earnings per share, diluted, DKK
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million
Q3 2022
Q3 2021
9M 2022
9M 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
Fair value adjustment of hedging instruments
-54
-243
-210
-666
-417
Tax on other comprehensive income, hedging instruments,
income/expense
Items that may be reclassified to profit/loss for the period,
net of tax
-152
-391
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
-152
-391
Total comprehensive income for the period
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CONSOLIDATED BALANCE SHEET
DKK million
Notes
2022
30 September
2021
30 September
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
-2,485
-1,186
-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
-164
Total comprehensive income for the period
-164
Share-based payments
-133
Purchase of treasury shares
-2,753
-2,753
Cancellation of treasury shares
-5
-3,481
Proposed dividend
-1,516
Dividend paid
-1,516
-1,514
Equity at 30 September
-2,485
-274
2021
Equity at 1 January
-93
Net profit for the period
Other comprehensive income, net of tax
-520
-9
-391
Total comprehensive income for the period
-520
Share-based payments
Purchase of treasury shares
-1,094
-1,094
Proposed dividend
-993
Dividend paid
-993
-993
Equity at 30 September
-1,186
-305
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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
Q3 2022
Q3 2021
9M 2022
9M 2021
FY 2021
Operating profit
Depreciation and amortisation
Share-based payments
Change in inventories
-699
-593
-1,647
-1,131
-799
Change in receivables
-339
-53
-77
Change in payables and other liabilities
-1,818
-1,124
Other non-cash adjustments
-65
-91
Interest etc. received
Interest etc. paid
-79
-38
-277
-146
-468
Income taxes paid
-135
-105
-1,086
-354
-832
Cash flows from operating activities, net
Acquisitions of subsidiaries and activities, net of cash acquired
8
-247
-52
-540
-66
-66
Purchase of intangible assets
-109
-80
-249
-206
-289
Purchase of property, plant and equipment
-225
-97
-522
-195
-296
Change in other non-current assets
-19
-3
-16
Proceeds from sale of property, plant and equipment
Cash flows from investing activities, net
-599
-231
-1,323
-459
-631
Dividend paid
-495
-1,514
-993
-1,479
Purchase of treasury shares
-796
-842
-2,753
-1,094
-3,325
Proceeds from loans and borrowings
Repayment of loans and borrowings
-3,005
-3,004
Repayment of lease commitments
-266
-241
-785
-711
-991
Cash flows from financing activities, net
-694
-1,430
-3,796
-7,484
Net increase/decrease in cash
-752
-776
-825
-2,100
-1,887
Cash at beginning of period
1
Exchange gains/losses on cash
-4
Net increase/decrease in cash
-752
-776
-825
-2,100
-1,887
Cash at end of period
1
Cash flows from operating activities, net
542
885
359
2,155
6,228
- Interests etc. received
-2
-1
-4
-2
-3
- Interests etc. paid
79
38
277
146
468
Cash flows from investing activities, net
-599
-231
-1,323
-459
-631
- Acquisition of subsidiaries and activities, net of cash acquired
247
52
540
66
66
Free cash flow excl. lease payments
266
744
-151
1,907
6,128
Free cash flow incl. lease payments
0
502
-936
1,195
5,137
Unutilised committed credit facilities
2,752
5,056
2,752
5,056
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
Q3 2022
Revenue
3,743
1,520
5,263
Cost of sales
-848
-378
-1,227
Gross profit
2,895
1,142
4,037
Operating expenses
-3,059
Consolidated operating profit (EBIT)
978
Profit margin (EBIT margin)
18.6%
Q3 2021
1
Revenue
3,325
1,403
4,728
Cost of sales
-829
-328
-1,158
Gross profit
2,496
1,075
3,571
Operating expenses
-2,614
Consolidated operating profit (EBIT)
957
Profit margin (EBIT margin)
20.2%
DKK million
Moments incl.
Collabs
Style
Group
9M 2022
Revenue
12,163
4,444
16,607
Cost of sales
-2,952
-976
-3,928
Gross profit
9,211
3,468
12,679
Operating expenses
-9,142
Consolidated operating profit (EBIT)
3,537
Profit margin (EBIT margin)
21.3%
9M 2021
1
Revenue
10,299
4,085
14,383
Cost of sales
-2,506
-897
-3,402
Gross profit
7,793
3,188
10,981
Operating expenses
-7,820
Consolidated operating profit (EBIT)
3,161
Profit margin (EBIT margin)
22.0%
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
Q3 2022
Q3 2021
1
Sell-out
growth
vs 2021
Local
currency
growth
Share of
Revenue
9M 2022
9M 2021
1
Sell-out
growth
vs 2021
Local
currency
growth
Share of
Revenue
Moments incl. Collabs
3,743
3,325
2%
7%
71%
12,163
10,299
8%
13%
73%
- Moments
3,251
2,948
-1%
5%
62%
10,532
9,190
5%
10%
63%
- Collabs
492
377
24%
22%
9%
1,631
1,109
33%
39%
10%
Style
1,520
1,403
-2%
2%
29%
4,444
4,085
2%
3%
27%
- Timeless
749
722
-2%
-3%
14%
2,589
2,435
-2%
1%
16%
- Signature
459
483
-20%
-10%
9%
1,223
1,294
-10%
-10%
7%
- Me
199
188
125%
2%
4%
501
328
105%
48%
3%
- Diamonds by Pandora
113
10
97%
883%
2%
131
28
79%
317%
1%
Total revenue
5,263
4,728
1%
5%
100%
16,607
14,383
6%
10%
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
5,247
4,717
16,557
14,340
Services transferred over time
17
11
51
44
Total revenue
5,263
4,728
16,607
14,383
REVENUE DEVELOPMENT IN THE KEY MARKETS
DKK million
Q3 2022
Q3 2021
Sell-out
growth vs
2021
Growth in
local
currency
9M 2022
9M 2021
Sell-out
growth vs
2021
Growth in
local
currency
US
1,597
1,342
-9%
2%
5,087
4,504
-7%
1%
China
162
233
-46%
-37%
594
904
-49%
-40%
UK
717
637
5%
13%
2,190
1,793
17%
20%
Italy
486
527
-5%
-8%
1,668
1,482
14%
12%
Australia
246
170
40%
33%
736
639
10%
10%
France
217
221
-1%
-2%
716
624
16%
15%
Germany
254
280
3%
-9%
813
712
37%
14%
Total top-7 markets
3,679
3,411
-4%
0%
11,803
10,659
1%
4%
Rest of Pandora
1,585
1,317
17%
17%
4,804
3,725
26%
26%
Total revenue
5,263
4,728
1%
5%
16,607
14,383
6%
10%
REVENUE BY CHANNEL
DKK million
Q3 2022
Q3 2021
Growth in
local currency
9M 2022
9M 2021
Growth in
local currency
Retail physical stores
1
2,808
2,223
21%
8,517
5,939
38%
Retail online stores
829
873
-11%
3,146
3,512
-15%
Wholesale and third-party distribution
1,627
1,633
-9%
4,945
4,933
-6%
Total revenue
5,263
4,728
5%
16,607
14,383
10%
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 9.2 billion at the end of Q3 2022 (Q2
2022: DKK 7.9 billion) corresponding to a financial leverage of 1.1x (Q2 2022: 1.0x). The increase in NIBD is mainly
driven by cash returns to shareholders (DKK 0.8 billion) and an increase in net working capital (DKK 0.8 billion).
Outstanding committed loan facilities (end of September 2022)
Available facilities
DKK million
Maturity date
Drawn amount
DKK million
Available
liquidity
Revolving Credit Facilities
7,065
April 2027
4,313
2,751
Term Loan maturing in 2030
744
May 2030
744
0
Term Loan maturing in 2023
1,250
March 2023
1,250
0
Total
9,058
6,307
2,751
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
The contribution from the acquisitions as highlighted below includes retail revenue and net profit after the acquisition
date and excludes the temporary drag on gross margin from inventory buybacks. It should be noted that the impacts
therefore do not include the lost revenue and net profit from the franchise channel, and thereby cannot be directly
linked to the P&L from a performance perspective.
Ben Bridge
In Q1 2022, Pandora took over 37 concept stores in US and Canada (32 concept stores in US and 5 concept stores
in Canada) from Ben Bridge in 2 business combinations. Net assets acquired mainly consist of store properties,
inventories and related liabilities. The total purchase price for the acquisitions was DKK 291 million. Based on the
purchase price allocations, goodwill was DKK 194 million. Excluding the temporary drag on gross margin from
inventory buybacks, contribution to Group revenue and net profit from the acquisition was DKK 273 million and DKK
106 million respectively.
Panbor
On 13 July 2022, Pandora took over 13 concept stores in Las Vegas from Panbor. Net assets acquired mainly consist
of store properties, inventories and related liabilities. The total purchase price for the acquisitions was DKK 166
million. Based on the purchase price allocations, goodwill was DKK 95 million. Excluding the temporary drag on gross
DKK million
2022
30 September
2021
31 December
Receivables related to third-party distribution and wholesale
613
672
Receivables related to retail revenue sales
267
337
Total trade receivables
880
1,009
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margin from inventory buybacks, contribution to Group revenue and net profit from the acquisition was DKK 52
million and DKK 22 million respectively.
Portugal
On 20 July 2022, Pandora acquired the distribution in Portugal from the previous distributor, Visão do Tempo. The
acquisition was comprised mainly of inventories, non-current assets and liabilities relating to 25 concept stores and
9 shop-in-shops. The total purchase price for the acquisitions was DKK 99 million. Based on the purchase price
allocations, goodwill was DKK 64 million. Excluding the temporary drag on gross margin from inventory buybacks,
contribution to Group revenue and net profit from acquisitions was DKK 29 million and DKK 14 million respectively.
Other business combinations in 2022
Pandora acquired 5 concept stores in the US and Italy in 2022. The purchase price was DKK 20 million. Assets acquired
mainly consist of inventories and other assets and liabilities relating to the stores. Of the purchase price DKK 11
million was allocated to goodwill.
Total business combinations in 2022
The total purchase price for the acquisitions in the first nine months of 2022 was DKK 577 million. Based on the
purchase price allocations, goodwill was DKK 364 million. Goodwill from the acquisitions is mainly related to the
synergies from converting the stores from wholesale & distribution to Pandora owned retail. All the goodwill
recognized 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 and the impact from converting the stores
from wholesale to Pandora owned retail, contribution to Group revenue and net profit from acquisitions for the
period 1 January – 30 September 2022 was DKK 361 million and DKK 144 million respectively. On a pro forma basis,
i.e. in the event that the acquisitions had been effective from 1 January 2022, the impact on Group revenue and net
profit for the period 1 January – 30 September 2022 would have been approximately DKK 493 million and DKK 186
million.
ACQUISITIONS
DKK million
9M 2022
FY 2021
Distribution rights
-
13
Property, plant and equipment and right-of-use assets
159
84
Inventories
195
34
Assets acquired
354
131
Non-current liabilities
78
50
Payables
3
-
Other current liabilities
61
27
Liabilities assumed
141
77
Total identifiable net assets acquired
213
54
Goodwill arising on the acquisitions
364
12
Purchase consideration
577
66
Cash movements on acquisitions:
Deferred payment (including earn-out)
-37
-
Net cash flow on acquisitions
540
66
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Business combinations after the reporting period
No acquisitions, to an extent of significance to Pandora, took place after the reporting period.
NOTE 9 – Goodwill
DKK million
2022
30 September
2021
31 December
Cost at 1 January
4,418
4,247
Acquisition of subsidiaries and activities in the period
364
12
Exchange rate adjustments
213
159
Cost at the end of the period
4,995
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.
NOTE 10 – Assets and liabilities related to leases
Amounts recognised in the balance sheet:
RIGHT-OF-USE ASSETS
DKK million
2022
30 September
2021
31 December
Property
2,803
2,507
IT
2
3
Cars
15
14
Other
6
8
Total right-of-use assets
2,825
2,532
Out of the total increase of DKK 0.3 billion in right-of-use-assets in the period 1 January – 30 September 2022, DKK
1.1 billion relates to renewals of lease contracts and new leases driven by network expansion and forward integration,
partially offset by a decrease of DKK 0.8 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 September
2021
31 December
Non-current
1,957
1,724
Current
971
886
Total lease liabilities
2,928
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 September 2022
1 January –
30 September 2021
Property
816
780
IT
1
1
Cars
7
7
Other
3
3
Total depreciation on right-of-use assets for the period
827
792
OTHER ITEMS RELATING TO LEASES
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
33 | 37
DKK million
1 January –
30 September 2022
1 January –
30 September 2021
Interest expense
103
72
Total interest for the period
103
72
Costs recognised in the period for short term and low value leases were DKK 45 million (2021: DKK 33 million).
Expenses are recognised on a straight line basis.
Total cash outflow relating to leases was DKK 1,191 million for the first 9 months in 2022 (2021: DKK 978 million).
This comprises of fixed lease payments in scope of IFRS 16 of DKK 785 million (2021: DKK 711 million), variable lease
payments of DKK 258 million (2021: DKK 162 million), interest paid of DKK 103 million (2021: DKK 72 million) and
short term and low value leases of DKK 45 million (2021: DKK 33 million). Payments related to variable leases and
short term and low value leases are not included in the lease liabilities.
Due to COVID-19, Pandora received rent concessions from landlords for the first 9 months in 2021 amounting to
DKK 51 million, which was recognised under Sales and Distribution expenses in the profit and loss statement. 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 34 million at 30
September 2022 (DKK 44 million at 30 September 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.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
34 | 37
NOTE 14 – Store network, concept store development
1,2
Total concept stores
O&O concept stores
Number
of concept
stores
Q3 2022
Number
of concept
stores
Q2 2022
Number
of concept
stores
Q3 2021
Growth
Q3 2022
/ Q2 2022
Growth
Q3 2022
/Q3 2021
Number
of concept
stores
O&O
Q3 2022
Growth
O&O
stores
Q3 2022
/ Q2 2022
Growth
O&O
stores
Q3 2022
/Q3 2021
US
405
394
386
11
19
255
28
69
China
232
219
219
13
13
214
13
11
UK
208
209
211
-1
-3
188
-1
33
Italy
150
145
146
5
4
113
5
6
Australia
120
122
123
-2
-3
41
-1
-
France
122
122
122
-
-
80
-
2
Germany
132
133
135
-1
-3
129
-1
-3
Total top-7 markets
1,369
1,344
1,342
25
27
1,020
43
118
Rest of Pandora
2
1,105
1,103
1,098
2
7
567
44
66
All markets
2,474
2,447
2,440
27
34
1,587
87
184
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 excludes concept stores and other points of sales from third-party distribution related to Russia and Belarus. Comparative figures for 2021
were restated accordingly.
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
Q3 2022
Hedged
Q4 2022
Hedged
Q1 2023
Hedged
Q2 2023
Hedged
Q3 2023
Gold price
1,798
1,787
1,850
1,838
1,773
Silver price
23.80
23.34
23.55
21.61
19.35
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 September 2022, which are expected to materially impact the Group’s financial position.
Up
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
35 | 37
QUARTERLY OVERVIEW
DKK million
Q3 2022
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Financial highlights
Revenue
5,263
5,655
5,689
9,011
4,728
Organic growth, %
3%
3%
21%
10%
14%
Sell-out growth (like-for-like), %
1
1%
2%
17%
11%
5%
Earnings before interests, tax, depreciations and
amortisations (EBITDA)
1,496
1,737
1,772
3,267
1,393
Operating profit (EBIT)
978
1,249
1,310
2,678
957
EBIT margin, %
18.6%
22.1%
23.0%
29.7%
20.2%
Net financials
-18
-27
-10
-211
-137
Net profit for the period
734
934
995
1,904
635
Financial ratios
Revenue growth, DKK, %
11%
10%
26%
14%
16%
Revenue growth, local currency, %
5%
4%
22%
11%
15%
Gross margin, %
76.7%
76.4%
76.0%
75.7%
75.5%
EBITDA margin, %
28.4%
30.7%
31.1%
36.3%
29.5%
EBIT margin, %
18.6%
22.1%
23.0%
29.7%
20.2%
Effective tax rate, %
23.5%
23.5%
23.5%
22.8%
22.5%
Equity ratio, %
26%
27%
28%
38%
40%
NIBD to EBITDA, excl. restructuring costs, x
2
1.1
1.0
0.9
0.4
0.5
Return on invested capital (ROIC)
1
, % of last 12 months EBIT
42%
46%
49%
59%
48%
Cash conversion incl. lease payments, %
0%
40%
-110%
147%
53%
Net working capital, % of last 12 months revenue
8.8%
5.8%
3.5%
-5.0%
0.2%
Capital expenditure, % of revenue
6.9%
5.4%
2.8%
2.4%
4.2%
Stock ratios
Total payout ratio (incl. share buyback), %
108%
77%
277%
143%
211%
Consolidated balance sheet
Total assets
21,776
20,503
19,419
18,542
18,173
Invested capital
14,853
13,543
12,684
9,884
11,141
Net working capital
2,249
1,451
871
-1,181
50
Net interest-bearing debt (NIBD), incl. capitalised leases
9,174
7,926
7,157
2,882
3,819
Equity
5,679
5,617
5,526
7,001
7,322
Consolidated statement of cash flow
Cash flow from operating activities
542
928
-1,111
4,073
885
Capital expenditure (CAPEX)
364
306
158
215
201
Capital expenditure, property, plant and equipment (CAPEX)
260
236
83
146
96
Free cash flow incl. lease payments
0
506
-1,442
3,941
502
1
Sell-out growth include sell-out from all concept stores including partner owned, and Pandora online. Sell-out growth is a like-for-like KPI and includes stores which
have been operating for +12 months and temporarily closed stores. Other points of sales are not included in sell-out growth.
2
Ratios are based on 12 months’ rolling EBITDA and EBIT, respectively.
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | page
36 | 37
MANAGEMENT STATEMENT
EXECUTIVE MANAGEMENT
BOARD
08 NOVEMBER 2022 | INTERIM FINANCIAL REPORT Q3 2022 | COMPANY ANNOUNCEMENT No. 751 | 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.
