Q4 2O22
INTERIM FINANCIAL REPORT
8 February 2023 | Company Announcement No. 767
2
HIGHLIGHTS
02 Executive Summary
03 Financial Highlights
4
BUSINESS UPDATE
04 Business Update
08 Revenue Review
13 Profitability
16 Cash Flow & Balance Sheet
17 Financial Guidance
21 Sustainability
22 Other Events
26 Contact
27
FINANCIAL STATEMENTS
27 Financial Statements
31 Accounting Notes
41 Disclaimer
Our equity story
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 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
2 | 41
EXECUTIVE SUMMARY
Full year results at the high-end of the guidance
- Strong brand drives resilient growth
Financial highlights
• Full year organic growth ended at 7% (guidance 4-6%) and the EBIT margin at 25.5% (guidance 25-25.5%).
• Q4 2022 organic growth of 4% (19% vs Q4 2019) comprising of sell-out growth of -1% (negatively impacted
by the fire in the European Distribution Center by roughly 1pp) and network expansion of +4%.
• Brand shows good resilience in macroeconomic uncertainty; US sell-out growth improves sequentially to -7%,
Europe resilient at +2% sell-out growth despite some pockets of macro-driven consumer weakness.
• Gross margin +0.5pp vs Q4 2021, reflecting good discipline despite a heavily promotional external
environment. The EBIT margin in Q4 2022 was 32.5%, an increase of 2.8pp vs. Q4 2021 with good cost control.
• Leverage remains low with NIBD to EBITDA at 0.8x. Pandora has a strong liquidity and funding position.
• Proposed dividend of DKK 16 per share and a new share buyback program of DKK 2.4 billion until 30 June
with an intention to go up to DKK 5.0 billion assuming no material deterioration in the macroeconomic climate.
Phoenix strategy highlights
• Pandora continues to make good progress on its Phoenix strategy; Moments delivered flat sell-out growth vs
Q4 2021, underpinning its resilience and position as a leading product category in jewellery.
• Prices successfully adjusted in Q4 2022 (4% on average) with positive financial impact.
• Diamonds by Pandora launch in North America tracking as planned. New collections planned for 2023 with
further geographical expansion.
• Pandora reduced total greenhouse gas emissions (scope 1, 2 and 3) by 6% vs. 2019 baseline, on track to halve
emissions by 2030. 61% of all silver and gold came from recycled sources, on track towards 100% by 2025.
2023 outlook and current trading
• Pandora is confident in its ability to adapt to the uncertain environment whilst driving strategic priorities.
• Initial guidance for 2023 is -3% to +3% organic growth and an EBIT margin around 25%.
• Current trading in 2023 has been solid with a good, broad-based pick-up in sell-out growth. This is somewhat
helped by an easier comparative base due to Omicron and earlier product launches than last year.
Nonetheless, Pandora is pleased with the underlying trading which continues in line with Q4 2022.
Alexander Lacik, President and CEO of Pandora
“We ended 2022 on a high note. Despite the macroeconomic pressure on consumers and COVID-19 headwinds in
China, we continue to deliver solid growth vs. pre-pandemic levels. We have started 2023 well, and are confident that
the transformation of the brand over the past few years puts Pandora in a good position to manage adversity and
emerge stronger. In 2023, we will keep executing on our strategy, take market share, and accelerate network
expansion while taking prudent cost actions to protect margins.“
DKK million
Q4 2022
Q4 2021
FY 2022
FY 2021
FY 2023 guidance
Revenue
9,856
9,011
26,463
23,394
Organic growth
4%
10%
7%
23%
-3% to 3%
Sell-out growth (like-for-like), %
1
-1%
11%
4%
20%
Operating profit (EBIT)
3,206
2,678
6,743
5,839
EBIT margin, %
32.5%
29.7%
25.5%
25.0%
Around 25%
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.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
3 | 41
FINANCIAL HIGHLIGHTS
DKK million
Q4 2022
Q4 2021
FY 2022
FY 2021
Financial highlights
Revenue
9,856
9,011
26,463
23,394
Organic growth, %
4%
10%
7%
23%
Sell-out growth (like-for-like), %
1
-1%
11%
4%
20%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
3,712
3,267
8,716
7,838
Operating profit (EBIT)
3,206
2,678
6,743
5,839
EBIT margin, %
32.5%
29.7%
25.5%
25.0%
Net financials
-155
-211
-210
-461
Net profit for the period
2,365
1,904
5,029
4,160
Financial ratios
Revenue growth, DKK, %
9%
14%
13%
23%
Revenue growth, local currency, %
6%
11%
8%
24%
Gross margin, %
76.2%
75.7%
76.3%
76.1%
EBITDA margin, %
37.7%
36.3%
32.9%
33.5%
EBIT margin, %
32.5%
29.7%
25.5%
25.0%
Effective tax rate, %
22.5%
22.8%
23.0%
22.6%
Equity ratio, %
33%
38%
33%
38%
NIBD to EBITDA, x
0.8
0.4
0.8
0.4
Return on invested capital (ROIC), % of last 12 months’ EBIT
48%
59%
48%
59%
Cash conversion incl. lease payments, %
110%
147%
39%
88%
Net working capital, % of last 12 months’ revenue
4.2%
-5.0%
4.2%
-5.0%
Capital expenditure, % of revenue
4.7%
2.4%
4.9%
2.7%
Stock ratios
Total pay-out ratio (incl. share buyback), %
33%
143%
100%
115%
Dividend per share, proposed, DKK
16
16
16
16
Dividend per share, paid, DKK
-
5
16
15
Earnings per share, basic, DKK
25.5
19.4
54.2
42.1
Earnings per share, diluted, DKK
25.2
19.1
53.7
41.7
Consolidated balance sheet
Total assets
22,013
18,542
22,013
18,542
Invested capital
13,961
9,884
13,961
9,884
Net working capital
1,104
-1,181
1,104
-1,181
Net interest-bearing debt (NIBD), incl. capitalised leases
6,794
2,882
6,794
2,882
Equity
7,167
7,001
7,167
7,001
Consolidated statement of cash flows
Cash flows from operating activities
4,075
4,073
4,434
6,228
Capital expenditure – total
462
215
1,290
641
Capital expenditure - property, plant and equipment
349
146
929
341
Free cash flows incl. lease payments
3,538
3,941
2,602
5,137
Sustainability
Scope 1, 2 & 3 emissions, tonnes CO
2
equivalent
2
-
-
280,370
277,450
Recycled silver and gold, total, %
3
-
-
61%
54%
Leadership Team gender ratio, female/male, %
4
-
-
29/71
23/77
1
Sell-out growth includes 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 sale are not included in sell-out growth.
2
Within limited assurance scope. The scope 2 emissions are calculated as market-based emissions.
3
Within limited assurance scope.
4
The Leadership Team comprises Vice Presidents, Senior Vice Presidents, members of the Executive Leadership Team and the Board of Director
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
4 | 41
BUSINESS UPDATE
Strength of the Pandora business model underpins solid end to the year
Despite the challenging macroeconomic environment, Pandora delivered solid revenue performance in Q4 2022 of
+4% organic growth (19% above Q4 2019) with resilient sell-out growth of -1%. Current assessment is that growth
was negatively impacted by the fire in the European Distribution Center by roughly 1%. During the quarter, consumer
trading patterns reverted to 2019 with more last-minute shopping towards the Christmas season.
Reflecting the macroeconomic environment, Pandora saw evidence of weaker consumer sentiment in some European
markets with Italy and France mostly impacted at -9% sell-out growth. As reported previously, brand metrics
remained strong with positive traffic, but conversion rates were lower. The geographical breadth of Pandora meant
that Europe still delivered 2% sell-out growth. Spain was particularly strong at +7% sell-out growth.
Q4 2022 was set against an intense competitive backdrop with a heavily promotional external environment. Pandora
maintained good discipline with the global promotional level only modestly above Q4 2021 and significantly below
that witnessed externally. In October, following successful testing, Pandora rolled out selected price increases across
its product portfolio amounting to an average 4% increase. Pricing was adjusted on a 1/3 of the assortment whilst
opening price points and strategic items were protected. Initial analysis has shown successful results and Pandora will
be moving ahead with a structured, regular review to assess further opportunities whilst staying true to the brand
promise of affordable jewellery.
Pandora’s biggest segment, Moments incl. Collabs, delivered flat sell-out growth vs Q4 2021. Moments remains a
core part of the brand proposition for Pandora and the resilient performance underpins the unique story-telling
proposition the product offers. The growth was supported by Collaborations, up 2% vs Q4 2021 with the Spiderman
collection performing well. The product pipeline is exciting for 2023 with, for example, the new iconic studded
bracelet.
Pandora’s Style segment, had -4% sell-out growth vs Q4 2021. The growth was dragged down by mainly Signature.
Pandora is not satisfied with the performance of Signature, as the new products introduced in the quarter fell short
of expectations.
Moments incl. Collabs generated a gross margin of 75.3% in Q4 2022 while Style generated a gross margin of 78.4%
compared to 74.6% and 78.2% in Q4 2021, respectively. Overall, gross margin was slightly up compared to Q4 2021,
please see page 14 for further details on the gross margin development.
Diamonds by Pandora continues to show good potential 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.
Total revenue in the quarter ended at DKK 81 million. Q4 2022 trading across Pandora is dominated by the Moments
platform but Diamonds by Pandora showed stable results across the 269 stores offering the collection in North
America with the best performing stores showcasing the great potential the product category and brand can have
together. Rings continue to be the best performing category and data suggests that roughly 50% of transactions are
generated by new consumers. Pandora will continue to optimise the assortment and adjust accordingly based on
learnings from the best performing stores. Pandora will take the next step in the geographical roll-out of the platform
during 2023.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
5 | 41
REVENUE BY SEGMENT
DKK million
Q4 2022
Q4 2021
Sell-out
growth vs
Q4 2021
Share of
revenue
YTD 2022
YTD 2021
Sell-out
growth
vs 2021
Share of
Revenue
Moments incl. Collabs
7,028
6,311
0%
71%
19,192
16,610
5%
73%
- Moments
6,045
5,510
0%
61%
16,578
14,699
3%
63%
- Collabs
983
801
2%
10%
2,614
1,911
20%
10%
Style
2,828
2,700
-4%
29%
7,272
6,784
-1%
27%
- Timeless
1,773
1,656
-3%
18%
4,362
4,091
-2%
16%
- Signature
660
695
-14%
7%
1,883
1,990
-12%
7%
- ME
314
328
-4%
3%
815
656
40%
3%
- Diamonds by Pandora
81
20
196%
1%
213
48
130%
1%
Total revenue
9,856
9,011
-1%
100%
26,463
23,394
4%
100%
Seizing investment opportunities – network expansion drives solid growth
In Q4 2022, Pandora saw an incremental revenue contribution of DKK 545 million coming from new store openings
and forward integration. Pandora sees the current macroeconomic uncertainty as an opportunity to potentially
accelerate the network expansion given the enhanced value creation through network development. Mainly through
new store openings, but also potential takeovers or acquisition of franchise partners where it makes sense for both
parties.
In Q4 2022, Pandora opened net 68 concept stores with the vast majority focused in the strategically important
markets of the US and China. The new stores are located prime white space locations.
Pandora has identified initially at least 600 locations across its top markets where it sees a potential for opening a
new store. Of these 600 stores, 50% are in US and China. During 2023, Pandora expects greater availability of prime
locations driven by the weaker economic backdrop and is targeting net concept store openings in 2023 of 50-100.
The total number of openings between 2022-2023 is now expected to be approximately 140-190, which is above
the initial 100-150 communicated at the Capital Markets Day in September 2021.
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.
Strategic priorities clear in uncertain environment, cost measures already in place to protect profitability
Since Q3 2022, Pandora has witnessed some but still limited shifts in consumer behavior, mostly in European markets.
External data, such as weakening consumer sentiment, inflation and higher interest rates suggest the current
environment is set to remain challenging into 2023. However, Pandora remains focused on delivering on its key
strategic priorities and is confident in its ability to weather a potential recession. It is worth noting that:
- 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. In this context, a new share buy-back of up to DKK 5.0 billion underpins Pandora’s strong cash
flow generation and the commitment to return excess cash to shareholders.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
6 | 41
- Pandora has already initiated several measures preparing for a potential macroeconomic downturn. These
measures mainly include a wide range of cost actions and re-prioritisation of certain initiatives, such as re-
focusing the manufacturing capacity expansion towards Vietnam and postponing the expansion plans in
Thailand. But it also includes more offensive measures where Pandora will actively look to consolidate its
market position. This includes accelerating the profitable network expansion as access to the desired
locations opens up during a recession.
- 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.
- As expected, Pandora’s inventory position ended the year at DKK 4.2 billion, down DKK 1 billion vs. Q3 2022.
Pandora’s inventory position remains healthy and the company does not expect increased markdowns.
European Distribution Centre fire impact and update
As reported previously, Pandora’s European Distribution Center in Hamburg, Germany, was affected by a fire. The
distribution centre restabilised operations fully by early December. Preliminary assessment of the financial impact
estimate the negative revenue impact in Q4 2022 at roughly 1pp of growth at Group level. The fire only impacted
Pandoras markets across continental Europe.
Pandora is pursuing insurance compensation for the revenue/EBIT loss as well as the incremental costs associated
with the fire. Any insurance compensation will be reported in the line “Other income” as per IFRS, above EBIT.
Capital Markets Day 2023 – update on Phoenix strategy
Pandora hosted a Capital Markets Day in September 2021 with new financial targets covering the period 2021-2023.
Despite headwinds from COVID-19 in China and a worsening macroeconomic situation Pandora has made significant
steps in driving sustainable profitable growth . We will provide an update on the Phoenix strategy at a Capital Markets
Day on 5 October, 2023 in London.
Performance metrics
From Q1 2023, Pandora will include retail owned other points of sales (such as the Shop-in-Shop store format) 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 significant impact on the
consolidated KPI, as retail owned other points of sales performance is relatively aligned to concept stores.
Furthermore, in order to clarify what the KPI means Pandora will change the name of the Sell-out growth KPI to “Like-
for-Like growth”. The calculations are unchanged and represent a store by store growth KPI for stores which have
been operating for +12 months.
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 the 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 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
7 | 41
Transfer of Pandora Production Co. Ltd to Pandora Production Holding A/S
In 2022, Pandora initiated the expansion of the Group’s crafting capacity in Vietnam to support Pandora’s long-term
growth. By diversifying its geographical footprint, Pandora will become more resilient to potential supply disruptions
as well as strengthen its business continuity plans. As a result, Pandora decided to reorganise its crafting activities
into a separate crafting sub-group by establishing a new intermediate holding company, which will oversee the
crafting activities across the Groups crafting facilities. Consequently, Pandora A/S transferred its controlling equity
investment in Pandora Production Co. Ltd. to Pandora Production Holding A/S, a newly established intermediate
holding company, as a contribution in-kind against shares in Pandora Production Holding A/S. The intra-group
transaction was carried out at fair value, which resulted in a gain of DKK 5.9 billion. The restructuring only impacts the
parent company accounts, not the consolidated accounts. Please also see note 3.3 in the Parent Company financial
statements in the 2022 Annual Report for more information.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
8 | 41
REVENUE REVIEW
Double digit revenue growth
The revenue growth development can be illustrated as follows (supplementary comments follows below):
Q4 2022 growth composition vs Q4 2021
Pandora delivered -1% sell-out growth vs Q4 2021 and organic growth of 4%. Organic growth was supported by
network expansion contributing with 4% organic growth, following net 88 new concept store openings and 130 new
owned and operated shop-in-shops. Additionally organic growth was supported by roughly 1% phasing of sell-in to
franchise partners etc.
Forward integration supported total revenue growth in local currency with 2% driven by store acquisitions, mainly in
the US, and the Portuguese distributor. Foreign exchange rates added a net tailwind of 3%, and continue to be driven
by a strong USD, leading to a total revenue growth of 9% vs Q4 2021.
Total revenue growth for the full year of 2022 was 13%.
*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 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
9 | 41
REVIEW OF REVENUE BY KEY MARKET
Q4 sell-out performance in-line with expectations
Overall, Pandora landed Q4 2022 performance slightly above its guidance expectations with sell-out growth at -1%,
and organic growth of 4% - a sequential acceleration vs 2019 as organic growth ended at 19% vs 2019, up from 13%
in Q3. Organic growth came in above expectations following slightly more network contribution than expected. The
market conditions in Q4 2022 were challenging across many markets, with weakening consumer sentiment and fierce
promotional activity across the competitor landscape. Pandora also noticed a change in consumer spending patterns
which reverted to pre-COVID-19 as consumer spending was anchored closer to the Christmas period.
US
Pandora US performed in line with expectations and delivered -7% sell-out growth vs Q4 2021, a sequential
improvement vs Q3 2022 of -9%. Pandora’s ambition to double the business in US vs 2019 levels is progressing well,
and 2022 is up 53% organically vs 2019, mainly driven by solid sell-out growth. The journey in US will be further
intensified in 2023, as Pandora plans to expand its Diamonds by Pandora offer in the market, as well as opening up
more stores in white spot areas.
Europe
In aggregate, sell-out growth in Europe was 2% with performance mixed across countries and some pockets of a
general weaker consumer sentiment.
The UK market delivered a resilient quarter with 1% sell-out growth. UK started to see some signs of weakening
consumer sentiment in Q4 2022. Pandora’s strong brand position combined with good execution in stores upheld
the performance and traffic was higher vs. Q4 2021. Performance was notably ahead of the jewellery market in the
UK.
Sell-out growth in Germany turned negative in Q4 2022 vs Q4 2021, yet continuing at high pace vs 2019. Sell-out
growth was positive in both October and December while November (Black Friday) was negative. The underlying
business remains healthy, and Germany saw organic growth of 3% vs Q4 2021. France saw a weak performance in Q4
2022 and delivered -9% sell-out growth vs Q4 2021. Pandora is not satisfied with the performance in France. During
2022, Pandora detoxed the promotional level with the aim of building a stronger base business to capitalise on future
ambitions.
Sell-out growth in Italy contracted by -9%, and followed the difficult trajectory from Q3 2022, driven by the macro
environment. In Q4 2022, Pandora continued to see further signs of weakening consumer sentiment in Italy, with
customers being more reluctant to spend and upselling becoming more difficult. Although store traffic remained
strong, conversion rates were lower indicating pressure on consumer wallets. Pandora expects this to continue into
first half of 2023 as well. Growth in Spain was strong at +7% sell-out growth in Q4 2022 and has the size of France.
China
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 continued to be severely impacted. Traffic into stores was down -60%
vs 2021. Performance in China in Q4 2022 therefore continued to be weak with sell-out growth of -41% vs Q4 2021,
translating into -64% sell-out growth vs Q4 2019. Pandora still has an ambition to triple the business in China vs 2019
levels and the latest re-opening of the market is a positive first step in Pandoras plan to invest in a re-launch of the
brand. Although early days, store traffic has started to improve in January.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
10 | 41
Australia and other
Australia delivered a decent quarter with 1% sell-out growth vs Q4 2021, while performance vs 2019 improved
sequentially. This was in line with expectations.
Pandora’s business outside of the seven key markets continues to grow and was very strong in Q4 2022 as well as full
year 2022. These markets delivered a combined 14% sell-out growth vs Q4 2021. The growth was particularly strong
in Mexico which delivered sell-out growth of 34%. Mexico is now a DKK 1.0 billion revenue market. As mentioned
above, Spain also contributed to growth in the quarter along with Portugal, Netherlands, Scandinavia, Poland, New
Zealand, Colombia and Brazil, to name a few.
QUARTERLY REVENUE DEVELOPMENT BY KEY MARKET
DKK million
Q4 2022
Q4 2021
Sell-out growth
vs 2021
Organic growth
vs 2021
Share of
revenue
US
2,820
2,523
-7%
-3%
29%
China
143
222
-41%
-36%
1%
UK
1,613
1,521
1%
9%
16%
Italy
913
961
-9%
-5%
9%
Australia
535
491
1%
8%
5%
France
475
498
-9%
-5%
5%
Germany
494
478
-3%
3%
5%
Total top-7 markets
6,991
6,694
-5%
-1%
71%
Rest of Pandora
2,865
2,316
14%
18%
29%
Total revenue
9,856
9,011
-1%
4%
100%
YEAR-TO-DATE REVENUE DEVELOPMENT BY KEY MARKET
DKK million
YTD 2022
YTD 2021
Sell-out growth
vs 2021
Organic growth
vs 2021
Share of
revenue
US
7,907
7,026
-7%
-3%
30%
China
737
1,126
-47%
-39%
3%
UK
3,802
3,314
10%
15%
14%
Italy
2,580
2,443
5%
6%
10%
Australia
1,271
1,131
6%
9%
5%
France
1,190
1,122
4%
6%
4%
Germany
1,307
1,191
18%
10%
5%
Total top-7 markets
18,795
17,353
-2%
1%
71%
Rest of Pandora
7,669
6,041
21%
23%
29%
Total revenue
26,463
23,394
4%
7%
100%
For organic growth rates vs 2019, please refer to the Excel appendix uploaded on www.pandoragroup.com.
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REVIEW OF REVENUE BY CHANNEL
Growth driven by owned and operated physical stores
Organic growth in Q4 2022 was driven by the physical network, as consumers returned to the physical stores following
the COVID-19 restrictions and Omicron outbreak in Q4 2021, which combined with the expansion of the network
supported the performance.
Pandoras online business delivered -3% in Q4 2022 following a normalisation effect of consumers returning to stores
– in line with the trajectory seen all year. Organic growth vs Q4 2019 was almost 90% and for the full year of 2022,
Pandora has doubled the online business vs 2019. The solid performance is a testimony to the step changes and
investments Pandora has made during the last couple of years.
Pandora’s 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 Q4 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 Q4 2022 and wholesale revenue
in Q4 2021. Franchise takeovers has in total contributed roughly DKK 60 million in net revenue converting from
wholesale to retail revenue.
Russia and Belarus dragged down organic growth in third party distribution, as Pandora has ceased its business in
these markets. Excluding these markets, third-party distribution would have been up 45% vs Q4 2021 driven by a
strong performance in some of the Asian markets.
REVENUE DEVELOPMENT BY CHANNEL
DKK million
Q4 2022
Q4 2021
Organic
growth vs
Q4 2021
Share of
Revenue
YTD 2022
YTD 2021
Organic
growth vs
2021
Share of
Revenue
Pandora owned
1
retail
7,452
6,471
8%
76%
19,115
15,922
11%
72%
- of which concept stores
4,434
3,668
11%
45%
12,150
9,133
21%
46%
- of which online stores
2,466
2,465
-3%
25%
5,612
5,977
-10%
21%
- of which other points of sale
553
338
49%
6%
1,353
812
55%
5%
Wholesale
2,197
2,291
-4%
22%
6,628
6,705
-2%
25%
- of which concept stores
1,115
1,278
-7%
11%
3,508
3,737
-3%
13%
- of which other points of sale
1,082
1,013
0%
11%
3,120
2,968
-1%
12%
Third-party distribution
207
249
-1%
2%
721
767
0%
3%
Total revenue
9,856
9,011
4%
100%
26,463
23,394
7%
100%
1
Pandora does not own any of the premises (Land and buildings) where stores are operated. Pandora exclusively operates stores from leased premises.
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REVIEW OF NETWORK DEVELOPMENT
Net 88 concept stores opened in 2022 – more to come in 2023
Pandora has opened net 88 concept stores in 2022 in line with the guidance range of net 70-100 openings. The store
openings are mainly in US and China and are part of Pandoras ambition to increase the overall footprint in these
markets and is closely linked to the Phoenix strategy. 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.
Furthermore, Pandora-owned other points of sales increased by 130 in 2022 and ended slightly above guidance
expectations of 100-125 openings. The openings were mainly in Latin America, which contributed 83 of the openings,
of which 49 was 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 franchise and third-party-distribution were down -55 and -170 vs Q4 2021 respectively.
These are mainly smaller accounts at local Multi-brand stores which have been closed.
Number of points of sale
1,3
Q4 2022
Q3 2022
Q4 2021
Growth
Q4 2022
/Q3 2022
Growth
Q4 2022
/Q4 2021
Concept stores
2,542
2,474
2,454
68
88
- of which Pandora owned
2
1,653
1,587
1,423
66
230
- of which franchise owned
588
588
700
0
-112
- of which third-party distribution
301
299
331
2
-30
Other points of sale
3,985
3,967
4,080
18
-95
- of which Pandora owned
2
464
431
334
33
130
- of which franchise owned
3,200
3,204
3,255
-4
-55
- of which third-party distribution
321
332
491
-11
-170
Total points of sale
6,527
6,441
6,534
86
-7
1
Please refer to note 14 Store network, concept store development 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.
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PROFITABILITY
Continued improved profitability
In line with typical seasonality the EBIT margin in Q4 was the highest in 2022. The EBIT margin improved by 2.8pp from
Q4 2021, and landed at 32.5% in line with pre-COVID levels.
The underlying EBIT margin improved, driven by operating leverage/network expansion adding 1pp to the margin in
Q4 2022. The Q4 margin was supported by lower marketing spend as a percentage of revenue (among others due to
a media tender) partly off-set by among others higher store staff cost. Foreign exchange rates represent a headwind
of 0.3pp driven by a stronger Thai Baht somewhat offset by a strong US dollar and British pound.
The drag on margin from inventory buy-backs relating to forward integration was in line with last year and therefore
had a net zero incremental impact vs Q4 2021.
The EBIT margin improvement was supported by the fall away from a few non-recurring items. In total, the margin in
Q4 2021 was suppressed by 2.1pp from non-recurring items including a temporary drag on gross margin of 0.4pp
due to inventories bought back in connection with forward integration. Other elements included DKK 15 million from
government support and rent concessions related to COVID-19, offset by COVID-19 pre-cautionary measures in
Thailand of DKK 25 million, leading to a net drag on EBIT margin of 0.1pp in Q4 2021. Furthermore, the margin last
year was impacted by a net cost phasing from Q3 2021 to Q4 2021of 0.5pp, and around DKK 100 million incremental
cost related to among others a write-down of certain IT assets and a larger bonus pool to employees reflecting the
strong 2021 performance.
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GROSS MARGIN
The gross margin ended at 76.2% corresponding to an improvement of 0.5pp vs Q4 2021. The improvement was
driven by favourable channel mix with more sales coming through physical O&O stores and further supported by
tailwinds from non-recurring cost associated with pre-cautionary measures in Thailand due to COVID-19 in Q4 2021.
A stronger Thai Baht and US Dollar compared to last year increased the FX headwinds on the gross margin by 0.9pp
while realised silver prices ended in line with Q4 2021 thereby resulting in no impact on Q4 2022 and a -0.9pp impact
on the full year 2022.
As already mentioned, Pandora is encouraged by the results of the price increases and saw promising signs in Q4
2022. Despite a more promotional quarter than last year, the gross margin held up driven by tailwinds from price
increases and channel mix.
Pandora continues to see a temporary impact on the gross margin arising from buyback of inventory in relation to
forward integration. In Q4 2022, this constituted a drag of 0.4pp on gross margin and EBIT margin, equivalent to the
impact seen in Q4 2021, and therefore a net zero marginal impact in Q4 2022 from forward integration.
GROSS MARGIN AND GROSS PROFIT
DKK million
Q4 2022
Q4 2021
Growth in
constant FX
YTD 2022
YTD 2021
Growth in constant
FX
Revenue
9,856
9,011
6%
26,463
23,394
8%
Cost of sales
-2,345
-2,188
0%
-6,273
-5,590
7%
Gross profit
7,511
6,822
8%
20,190
17,803
9%
Gross margin
76.2%
75.7%
0.5%
76.3%
76.1%
0.2%
OPERATING EXPENSES
Total operating expenses increased by 2% in constant foreign exchange rates vs Q4 2021 and decreased as a
percentage share of revenue. As previously communicated, the OPEX to revenue ratio was expected to be below Q4
2021 as last year’s operating expenses were impacted by a few non-recurring items. The full year 2022 OPEX to
revenue ratio remains flat vs 2021.
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The 16% constant foreign exchange increase in sales and distribution expenses, were driven by the expansion of the
Pandora owned physical network, which amounted to a total increase of 230 concept stores and 130 other points of
sale compared to end 2021.
Administrative expenses are down 6% in constant foreign exchange rates vs Q4 2021. This was mainly driven by the
write down of IT assets and employees bonuses in Q4 2021 as mentioned above.
Marketing expenses landed at 13.2% share of revenue, a 3.2pp decrease compared to last year. This was mainly driven
by a global media tender which successfully reduced media and PR related cost as well as incremental revenue from
network developments which do not require additional media and PR related cost. Furthermore, investments into the
global re-launch of Pandora ME also elevated the marketing spend last year.
OPERATING EXPENSES
DKK million
Q4 2022
Q4 2021
Growth in
constant
FX
Share of
revenue
Q4 2022
Share of
revenue
Q4 2021
YTD 2022
YTD 2021
Growth in
constant
FX
Share of
revenue
YTD 2022
Share of
revenue
YTD 2021
Sales and distribution
expenses
-2,418
-2,061
16%
24.5%
22.9%
-7,602
-6,352
16%
28.7%
27.2%
Marketing expenses
-1,301
-1,473
-14%
13.2%
16.4%
-3,720
-3,587
0%
14.1%
15.3%
Administrative expenses
-586
-610
-6%
5.9%
6.8%
-2,125
-2,026
3%
8.0%
8.7%
Total operating expenses
-4,305
-4,144
2%
43.7%
46.0%
-13,448
-11,965
9%
50.8%
51.1%
FINANCIAL EXPENSES AND TAX
Net financials in Q4 2022 ended at a cost of DKK 155 million and was driven by increased interest rates, which
impacted IFRS 16 related interest on lease payments and interests on loans. Additionally, the development in foreign
exchange rates resulted in a loss on FX hedging contracts.
The effective tax rate ended at 22.5% for Q4 2022 resulting in an effective tax rate of 23.0% for the full year 2022,
at the lower end of the guided range of 23-24%. The full year tax rate is slightly above last year’s level mainly due to
non-deductible costs in China and Panama (cluster head office for Latin America).
Pandora has lifted EPS by 29% in 2022 vs 2021 to DKK 54.2.
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CASH FLOW & BALANCE SHEET
Solid cash flow generation in Q4 as net working capital normalises
Pandora delivered a strong cash conversion of 110% in Q4 2022. The full year cash conversion of 39% is below normal
levels and reflects a deliberate increase in inventory levels, normalisation of CAPEX levels in line with historical pre-
COVID levels as well as relatively high cash tax payments related to prior year.
The net working capital ended at 4.2%. The normalisation of net working capital is driven by a deliberate inventory
build-up planned since the low point at the end of 2020. In line with the Q3 2022 communication, inventories came
down following the peak-trading and landed at DKK 4.2 billion.
Trade receivables continue to be at a healthy level with wholesale Days Sales Outstanding (DSO) ending at 28 days, vs
24 days in Q4 2021. Total DSO, including retail receivables, ended at 12 days by the end of Q4 2022, slightly above
Q4 2021 of 10 days.
CAPEX ended at 4.7% of revenue in Q4 2022 vs 2.4% in Q4 2021. Full year 2022 CAPEX landed at 4.9% vs 2.7% in
2021. The increase vs last year is in line with the guidance and a result of investments in opening new stores, store
refits, investments in new and existing production facilities and Digital.
ROIC continues to be strong and landed 2022 at 48% vs 59% in 2021. The decrease is mainly a function of a higher
invested capital due to the before mentioned inventory build-up as well as increased right-of-use assets as a
consequence of net opened Pandora owned physical stores at the end of 2022. On a run-rate basis, new Pandora
concept stores are ROIC accretive. The investments made are supporting Pandora to execute on the Phoenix growth
strategy and Pandora see a potential for expanding the ROIC going forward.
NET WORKING CAPITAL
Share of preceding 12 months' revenue
Q4 2022
Q3 2022
Q2 2022
Q1 2022
Q4 2021
Inventories
15.9%
20.1%
16.9%
14.4%
12.8%
Trade receivables
4.8%
3.4%
2.6%
3.2%
4.3%
Trade payables
-11.8%
-10.4%
-9.5%
-10.2%
-14.0%
Other net working capital elements
-4.7%
-4.3%
-4.2%
-3.9%
-8.2%
Total
4.2%
8.8%
5.8%
3.5%
-5.0%
Balance Sheet
Total non-current assets increased to DKK 14.3 billion at the end of 2022 (2021: DKK 12.6 billion), mainly due to
increase in goodwill from acquisitions, an overall higher CAPEX spend across all asset types, higher right-of-use assets
coming from network expansion, and a higher deferred tax asset. The increase in current assets is mainly related to
the inventory build-up, which has reached a sustainable level by the end of 2022.
Net interest-bearing debt amounted to DKK 6.8 billion at the end of 2022 (2021: DKK 2.9 billion), corresponding to
a financial leverage of 0.8x (2021: 0.4x). The increase in net interest-bearing debt was mainly driven by significant
cash returns to shareholders in 2022 through a combination of dividends and share buybacks, equivalent to 11% of
market cap at the end of 2022, as well as increasing inventory levels.
At the end of 2022, equity in Pandora amounted to DKK 7.2 billion, and roughly in line with 2021 of DKK 7.0 billion.
The increase was driven by profit for the year offset by payout of DKK 5.1 billion to its shareholders. In 2022, Pandora
paid out DKK 1.5 billion in ordinary dividend and bought back own shares for a total of DKK 3.6 billion.
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FINANCIAL GUIDANCE
Resiliency in an uncertain environment
The economic outlook for 2023 remains highly uncertain. High inflation and rising mortgage rates suggest that
consumer spending will come under pressure. The brand has demonstrated strong resilience since macroeconomic
conditions started to worsen during 2022, and current trading remains encouraging. For now, Pandora has seen some,
but only limited, signs of a shift in consumer spending. Nonetheless, Pandora will plan for a range of scenarios,
including a weakening of the current macroeconomic backdrop. Our guidance considers external factors, our own
internal brand initiatives and current trading to form an initial wide range.
Pandora is therefore currently targeting an organic growth of -3% to 3% and an EBIT margin of Around 25%. The
wider-than-normal revenue guidance range reflects the elevated macroeconomic uncertainty and, as usual, will be
narrowed as visibility improves through the year. The low end of the organic growth range would require a worsening
of trading conditions relative to today.
Whilst predicting near-term sales trends is currently challenging, Pandora’s strong brand position, solid financials,
flexible business model and position in affordable gifting make the company well equipped to weather a potential
recession and at the same time seize relevant investment opportunities which may arise.
REVENUE GUIDANCE
Pandora is currently planning for sell-out growth of flattish to a decline of mid-single digits, depending on how
macroeconomic conditions progress through the year. Continued network expansion is expected to add 2-3pp to
growth and help lift organic growth to -3% to 3%. Forward integration is expected to add around 1% revenue with
revenue growth in local currency ending at -2% to 4%.
The organic growth guidance can be illustrated as follows:
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PROFITABILITY GUIDANCE
The EBIT margin guidance for 2023 is Around 25% and can be illustrated as follows:
Temporary and non-recurring costs from 2022 drive a tailwind of 0.8pp. Structural cost reductions and the price
increases implemented in Q4 2022 will be funding the investments in Phoenix initiatives and future growth. Higher-
than-normal salary increases are expected to suppress the EBIT margin by 1.0pp. Foreign exchange rates and
commodity assumptions per 31 January 2023 currently represent a net headwind of 0.4pp. Lastly, operating leverage
will mainly decide where Pandora will end the year. The guidance also allows for an additional element of cost flexibility
which could be utilised depending on the growth outcome. The EBIT margin phasing through the year is expected to
be slightly more skewed towards the second half than usual. This reflects, among others, phasing of costs, hedged
silver prices and foreign exchange rates.
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2023 GUIDANCE - OTHER PARAMETERS
Pandora expects to open net 50-100 concept stores and 50-100 owned and operated other points of sales in 2023.
CAPEX is expected to end at around 6% share of revenue, primarily driven by investments into the store network,
digital initiatives and crafting facilities. The effective tax rate is expected to be 23-24%, unchanged from last year.
The guidance contains forward-looking statements, which include estimates of financial performance and targets.
These statements are not guarantees of future performance and involve certain risks and uncertainties. Therefore,
actual future results and trends may differ materially from what is forecast in this report due to a variety of factors,
please also refer to the disclaimer on page 41.
FOREIGN EXCHANGE AND COMMODITY ASSUMPTIONS AND IMPLICATIONS – As of 31 January 2023
Average 2022
Average 2023
2023 Y-Y
Financial Impact
USD/DKK
7.07
6.87
THB/DKK
0.20
0.20
GBP/DKK
8.73
8.45
CNY/DKK
1.05
1.02
AUD/DKK
4.91
4.81
Silver/USD (per ounce)
24.9
22.7
REVENUE (DKK million)
Approx. -500
EBIT (DKK million)
Approx. -225
EBIT margin (foreign exchange)
Approx. -1.0%
EBIT margin (commodities)
Approx. 0.6%
CAPITAL MARKETS DAY SEPTEMBER 2021 - FINANCIAL TARGETS
Pandora hosted a Capital Markets Day (CMD) 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 in September 2021, the geopolitical and macroeconomic situation has
worsened significantly. Additionally, the 2023 targets did not include any impact from COVID-19, which had a severe
negative impact on the performance in China in 2022. As previously mentioned, the impact of these factors on the
2023 CMD targets is uncertain but despite the headwinds the new 2023 EBIT margin guidance is just within the
targeted range. In relation to the organic growth target announced at the CMD, the outcome is somewhat dependent
on macroeconomic conditions, but the upper end of the new 2023 guidance would also place Pandora within the
targeted CMD range.
CAPITAL STRUCTURE POLICY AND CASH DISTRIBUTION
At the end of 2022, Pandora’s leverage ratio was only 0.8x NIBD to EBITDA and consequently at the lower end of the
capital structure policy range of 0.5-1.5x. The increased leverage of 0.4x versus 2021 primarily reflects significant
cash distributions to the shareholders as well as increased inventories and higher CAPEX through the year.
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SUSTAINABILITY
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OTHER EVENTS
CHANGES TO BOARD OF DIRECTORS
Due to recent changes in his executive commitments, Heine Dalsgaard has decided not to seek re-election to
Pandora’s Board at the Annual General Meeting in March 2023. The Board therefore nominates Lilian Fossum Biner
as a new member of the Board for election at the Annual General Meeting in March 2023, please see Company
Announcement no. 762 for more details.
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
5 October 2023 Capital Markets Day 2023
08 November 2023 Interim Financial Report for the third quarter/first nine months of 2023
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2022 YEAR-TO-DATE DEVELOPMENT
GROUP PERFORMANCE
2022 was yet another record-breaking year for Pandora as revenue reached an all-time high. Pandora exceeded the
financial guidance on organic growth and reached the high of the financial guidance on EBIT margin. This was despite
an increasingly challenging macroeconomic backdrop throughout the year, ongoing COVID-19 restrictions in China
and the impact from a high comparative base in the US owing to government stimulus cheques in 2021.
In the second year of the Phoenix growth strategy, organic growth was 7% compared to 2021 and 17% compared to
2019. Growth was driven by continued strong brand momentum across major markets. Brand-specific investments
in digital, commercial and personalised marketing over the past three years have been paying off whilst the launch of
new platforms, such as Diamonds by Pandora, have been well received.
Good momentum across most key markets
Pandora delivered strong performance in most of its key markets. The UK, our second largest market, delivered strong
sell-out growth of 10% compared to 2021, driven by strong demand for the Pandora Moments platform. Italy and
Germany saw solid sell-out growth and ended the year at 5% and 18% respectively. In the second half of the year,
Italy started to see negative impact from the challenging macroeconomic backdrop. France also saw positive sell-out
growth of 4%, however Pandora is not satisfied with the performance. In 2022, Pandora has focused on detoxing the
promotional level in France, with the aim of building a stronger base business to capitalise on future ambitions.
Throughout 2022, China remained a drag on performance. The COVID-19 restrictions in the market further delayed
the relaunch of the Pandora brand. China remains of high strategic importance for Pandora.
Organic growth compared to 2019 remained very strong in the US and ended at 53%. As expected, the US market
declined for Pandora and sell-out growth ended at -7% compared to 2021, following the effect of the government
stimulus cheques in 2021.
Moments incl. Collabs compounds solid growth
The Moments incl. Collabs segment continued its solid performance in 2022. Despite a challenging macro
environment, the Pandora Moments platform delivered positive sell-out growth of 5% in 2022, underpinning its
position as a leading product category in the jewellery market, even in uncertain times. Growing Pandora Moments is
the number one priority in the Phoenix strategy.
Diamonds by Pandora shows potential
Pandora's second product segment Style delivered sell-out growth of -1% in 2022, mainly dragged down by Signature.
The largest product platform within Style is Timeless, which offers classical jewellery to our consumers. Timeless is
also Pandora's second largest product platform and represents significant opportunity for growth. Another product
platform within Style is Diamonds by Pandora, a collection of lab-created diamond jewellery made out of 100%
recycled siler & gold. Pandora took the platform to North America in August 2022 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. The market is expected to continue to grow, and lab-created diamonds are outpacing the
diamond industry's overall growth. In 2022, total revenue was DKK 213 million. The collection is available in UK, US
and Canada.
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Store network development
In 2022, Pandora opened net 88 concept stores. The store openings were mainly located in the US and China and are
part of Pandora’s ambition to increase the overall footprint in these markets. The expansion of the Pandora network
comes with a significant opportunity for further value creation, and Pandora expect to open an additional net 50-
100 concept stores in 2023.
Furthermore, through 2022, Pandora converted 25 concept stores and nine shop-in-shops from third-party
distribution stores to Pandora-owned stores in Portugal. Pandora also took over 13 concept stores in Las Vegas from
Panbor, as well as 37 concept stores from Ben Bridge Jeweler, primarily on the US West coast.
GROUP PROFITABILITY
Pandora delivered strong profitability again in 2022 with EBIT increasing by 15% - a testimony to the operating
leverage in Pandora’s business model.
Moments incl. Collabs generated a gross margin of 75.6% while Style generated a gross margin of 78.2% compared
to 75.3% and 78.1% in 2021, respectively. Overall, gross margin was slightly up compared to 2021. The increase was
mainly due to favourable channel mix and overall efficiencies in the production. The increase was delivered despite
the negative impacts from higher commodity prices, impacting gross margin negatively by 0.9pp. Furthermore
temporary headwind of 0.5pp from inventory buybacks in connection with franchise acquisitions and non-recurring
COVID-19 cost in Thailand also suppressed gross margin in 2022. Finally, the impact on Pandora’s gross margin from
foreign exchange rates was neutral vs 2021.
OPEX ratio decreased by 0.3pp compared to 2021, despite higher sales and distribution expenses coming from the
expansion of owned and operated stores. Marketing expenses ended at 14.1% of revenue in 2022, compared to
15.3% in 2021, and administrative expenses ended at 8.0% of revenue compared to 8.7% in 2021. The EBIT margin
ended at 25.5%, up 0.5pp compared to 2021, despite headwinds from rising inflation, higher interest rates and
geopolitical uncertainty. Pandora also wrote down DKK 50 million of trade receivables related to Pandora’s exit from
the Russian market.
Net financial items ended at a cost of DKK 210 million compared to DKK 461 million in 2021. The development is due
to favourable exchange rate evolvement. Total tax expenses amounted to DKK 1.5 billion (2021: DKK 1.2 billion),
corresponding to an effective tax rate of 23.0% in 2022 compared to 22.6% in 2021. The increase is a reflection of
an overall stronger performance combined with non-capitalised tax assets. Finally, net profit improved to DKK 5.0
billion compared to DKK 4.2 billion in 2021.
Pandora has lifted earnings per share (EPS) by 29% compared to 2021, ending at DKK 54.2 in 2022.
BALANCE SHEET AND CASH FLOW
Solid capital position
Net working capital ended at 4.2% of revenue in 2022. The increase in net working capital of DKK 2.3 billion was mainly
driven by a deliberate inventory build-up to protect availability, in order to mitigate risk of stock-outs and disruptions
in the supply chain. In addition, the increase on inventory was also driven by more openings of owned and operated
stores and revenue growth.
Free cash flow ended the year at DKK 2.6 billion, down from DKK 5.1 billion, and is a reflection of the before
mentioned increases in inventory as well as higher CAPEX. Pandora has increased CAPEX from 3% share of revenue in
2021 to 5% share of revenue in 2022, equal to a DKK 649 million increase in absolute CAPEX. The increase in CAPEX
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25 | 41
is mainly due to network expansion as Pandora has opened net 88 concept stores and 130 owned and operated shop-
in-shops in 2022. Additionally, taxes paid was DKK 1.8 billion in 2022 compared to DKK 0.8 billion in 2021, also
impacting both free cash flow and cash flows from operating activities negatively. The increase in taxes paid relates
to tax from prior year and a higher tax paid for 2022. Cash flow from investing activities increased to DKK 1.8 billion
compared to DKK 0.6 billion in 2021, due to increasing acquisition activity and higher CAPEX from network expansion
and investments in digital capabilities.
For comments to ROIC and the balance sheet, please refer to page 16.
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26 | 41
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 78 76 84 90
SE: +46 406 820 620
UK: +44 203 769 6819
US: +1 646 787 0157
PIN: 837462
Link to webcast: https://pandora-events.eventcdn.net/events/annual-report-2022
ABOUT PANDORA
through more than 6,500 points of sale, including more than 2,500 concept stores.
Headquartered in C openh agen , Denmark , Pandora employs 32,000 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 revenue of DKK 26.5 billion (EUR 3.6 billion) in 2022.
For more information, please contact:
INVESTOR RELATIONS
Bilal Aziz
VP, Investor Relations & Treasury
+45 3137 9486
biazi@pandora.net
CORPORATE COMMUNICATIONS
Mads Twomey-Madsen
SVP, 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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FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
DKK million
Notes
Q4 2022
Q4 2021
FY 2022
FY 2021
Revenue
3
Cost of sales
-2,345
-2,188
-6,273
-5,590
Gross profit
Sales, distribution and marketing expenses
-3,720
-3,535
-11,322
-9,939
Administrative expenses
-586
-610
-2,125
-2,026
Operating profit
Finance income
Finance costs
-255
-228
-622
-613
Profit before tax
Income tax expense
-686
-563
-1,504
-1,218
Net profit for the period
Earnings per share, basic, DKK
Earnings per share, diluted, DKK
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million
Q4 2022
Q4 2021
FY 2022
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
-571
-196
Fair value adjustment of hedging instruments
-417
Tax on other comprehensive income, hedging instruments, income/expense
-29
-58
Items that may be reclassified to profit/loss for the period, net of tax
-93
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
-81
Total comprehensive income for the period
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CONSOLIDATED BALANCE SHEET
DKK million
Notes
2022
31 December
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
-3,320
-3,416
Reserves
Proposed dividend
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
-108
Total comprehensive income for the period
-108
Share-based payments
-95
Purchase of treasury shares
-3,588
-3,588
Cancellation of treasury shares
-5
-3,481
Dividend paid
-1,516
-1,514
Dividend proposed
-1,430
Equity at 31 December
-3,320
2021
Equity at 1 January
-93
Net profit for the period
Other comprehensive income, net of tax
-325
Total comprehensive income for the period
-325
Share-based payments
Purchase of treasury shares
-3,325
-3,325
Dividend paid
-1,481
-1,479
Dividend proposed
-2,997
Equity at 31 December
-3,416
-110
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CONSOLIDATED STATEMENT OF CASH FLOWS
The above cannot be derived directly from the income statement and the balance sheet.
DKK million
Notes
Q4 2022
Q4 2021
FY 2022
FY 2021
Operating profit
Depreciation and amortisation
Share-based payments
Change in inventories
-1,012
-799
Change in receivables
-609
-380
-531
-77
Change in payables and other liabilities
-559
Other non-cash adjustments
-57
-18
Finance income received
Finance costs paid
-189
-322
-466
-468
Income taxes paid
-704
-478
-1,790
-832
Cash flows from operating activities, net
Acquisitions of subsidiaries and activities, net of cash acquired
8
-22
-562
-66
Purchase of intangible assets
-104
-83
-353
-289
Purchase of property, plant and equipment
-316
-101
-838
-296
Change in other assets
-20
-36
Proceeds from sale of property, plant and equipment
-2
Cash flows from investing activities, net
-462
-172
-1,785
-631
Dividend paid
-486
-1,514
-1,479
Purchase of treasury shares
-774
-2,230
-3,527
-3,325
Proceeds from loans and borrowings
-198
-693
Repayment of loans and borrowings
-1,985
-1,985
-3,004
Repayment of lease commitments
-283
-280
-1,068
-991
Cash flows from financing activities, net
-3,239
-3,688
-3,100
-7,484
Net increase/decrease in cash
-452
-1,887
Cash and cash equivalents, beginning of period
Exchange gains/losses on cash
-39
Net increase/decrease in cash
-452
-1,887
Cash and cash equivalents, end of period
Cash balances
Overdrafts
-199
-199
Cash and cash equivalents, end of period
Cash flows from operating activities, net
- Finance income received
-3
-1
-7
-3
- Finance costs paid
Cash flows from investing activities, net
-462
-172
-1,785
-631
- Acquisition of subsidiaries and activities, net of cash acquired
Free cash flows excl. lease payments
Free cash flows incl. lease payments
Unutilised committed credit facilities
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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 2022.
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 these non-GAAP measures provide valuable information to investors and Pandora’s management when
evaluating performance. Since other companies may calculate these differently from Pandora, they may not be
comparable to the measures used by other companies. These financial measures should therefore not be considered
to be a replacement for measures defined under IFRS. For definitions of the performance measures used by Pandora,
see note 5.6 Financial definitions to the consolidated financial statements in the Annual Report 2022.
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. The new standards
that are not yet effective are not expected to have any material impact on Pandora.
NOTE 2 – Significant accounting estimates and judgements
In preparing the condensed consolidated interim financial statements, management makes various judgements,
accounting estimates and assumptions that form the basis of the 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 2022
to which we refer.
NOTE 3 – Segment and revenue information
Pandora’s activities are segmented into two reportable segments, each responsible for the end-to-end performance
of collections. One includes Moments incl. Collabs, while the other, Style, covers newer collections and innovations.
The two operating segments include all channels relating to the distribution and sale of Pandora products.
Management monitors the profitability of 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.
Non-unit driven revenue, comprising mainly franchise fees, is allocated proportionately to the different revenue
categories.
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SEGMENT INFORMATION
DKK million
Moments incl.
Collabs
Style
Group
Q4 2022
Revenue
7,028
2,828
9,856
Cost of sales
-1,735
-610
-2,345
Gross profit
5,293
2,218
7,511
Operating expenses
-4,305
Consolidated operating profit (EBIT)
3,206
Profit margin (EBIT margin)
32.5%
Q4 2021
Revenue
6,311
2,700
9,011
Cost of sales
-1,600
-588
-2,188
Gross profit
4,711
2,112
6,822
Operating expenses
-4,144
Consolidated operating profit (EBIT)
2,678
Profit margin (EBIT margin)
29.7%
DKK million
Moments incl.
Collabs
Style
Group
FY 2022
Revenue
19,192
7,272
26,463
Cost of sales
-4,688
-1,586
-6,273
Gross profit
14,504
5,686
20,190
Operating expenses
-13,448
Consolidated operating profit (EBIT)
6,743
Profit margin (EBIT margin)
25.5%
FY 2021
Revenue
16,610
6,784
23,394
Cost of sales
-4,106
-1,485
-5,590
Gross profit
12,504
5,300
17,803
Operating expenses
-11,965
Consolidated operating profit (EBIT)
5,839
Profit margin (EBIT margin)
25.0%
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REVENUE BY SEGMENTS
DKK million
Q4 2022
Q4 2021
Sell-out
growth
vs Q4 2021
Local
currency
growth
Share of
Revenue
FY 2022
FY 2021
Sell-out
growth
vs 2021
Local
currency
growth
Share of
Revenue
Moments incl. Collabs
7,028
6,311
0%
8%
71%
19,192
16,610
5%
11%
73%
- Moments
6,045
5,510
0%
7%
61%
16,578
14,699
3%
9%
63%
- Collabs
983
801
2%
18%
10%
2,614
1,911
20%
30%
10%
Style
2,828
2,700
-4%
2%
29%
7,272
6,784
-1%
3%
27%
- Timeless
1,773
1,656
-3%
4%
18%
4,362
4,091
-2%
2%
16%
- Signature
660
695
-14%
-7%
7%
1,883
1,990
-12%
-9%
7%
- ME
314
328
-4%
-6%
3%
815
656
40%
21%
3%
- Diamonds by Pandora
81
20
196%
272%
1%
213
48
130%
298%
1%
Total revenue
9,856
9,011
-1%
6%
100%
26,463
23,394
4%
8%
100%
Goods transferred at a point in time
9,829
8,981
26,386
23,321
Services transferred over time
27
30
77
73
Total revenue
9,856
9,011
26,463
23,394
REVENUE DEVELOPMENT IN THE KEY MARKETS
DKK million
Q4 2022
Q4 2021
Sell-out
growth vs Q4
2021
Growth in
local currency
FY 2022
FY 2021
Sell-out
growth vs
2021
Growth in
local currency
US
2,820
2,523
-7%
1%
7,907
7,026
-7%
1%
China
143
222
-41%
-36%
737
1,126
-47%
-39%
UK
1,613
1,521
1%
9%
3,802
3,314
10%
15%
Italy
913
961
-9%
-5%
2,580
2,443
5%
6%
Australia
535
491
1%
8%
1,271
1,131
6%
9%
France
475
498
-9%
-5%
1,190
1,122
4%
6%
Germany
494
478
-3%
3%
1,307
1,191
18%
10%
Total top-7 markets
6,991
6,694
-5%
1%
18,795
17,353
-2%
3%
Rest of Pandora
2,865
2,316
14%
21%
7,669
6,041
21%
24%
Total revenue
9,856
9,011
-1%
6%
26,463
23,394
4%
8%
REVENUE BY CHANNEL
DKK million
Q4 2022
Q4 2021
Growth in
local currency
FY 2022
FY 2021
Growth in
local currency
Retail physical stores
1
4,986
4,006
22%
13,503
9,945
31%
Retail online stores
2,466
2,465
-3%
5,612
5,977
-10%
Wholesale and third-party distribution
2,404
2,539
-10%
7,349
7,472
-7%
Total revenue
9,856
9,011
6%
26,463
23,394
8%
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 Financial risks in the consolidated financial
statements in the Annual Report 2022.
Net interest-bearing debt (NIBD), incl. capitalised leases amounted to DKK 6.8 billion at the end of Q4 2022 (Q3
2022: DKK 9.2 billion) corresponding to a financial leverage of 0.8x (Q3 2022: 1.1x). The decrease in NIBD is mainly
driven by the high cash generation seen throughout the peak trading season.
Outstanding committed loan facilities (end of December 2022)
Available facilities
DKK million
Maturity date
Drawn amount
DKK million
Available
liquidity
Revolving credit facilities
1
7,065
April 2027
372
6,693
Term loan maturing in 2030
1
744
May 2030
744
-
Term loan maturing in 2023
3,000
December 2023
3,000
-
Total outstanding committed loan facilities
10,808
4,116
6,693
1
The revolving credit facility and the term loan maturing in 2030 are both sustainability-linked facilities.
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 Derivative financial instruments to the consolidated financial statements in the Annual Report 2022.
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. Lost revenue and net profit from the franchise channel have not been adjusted, thus the highlighted
contributions cannot be directly linked to the income statement from a performance perspective.
Ben Bridge
In Q1 2022, Pandora took over 37 concept stores in the US and Canada (32 concept stores in the US acquired on 3
March and five concept stores in Canada acquired on 25 February) from Ben Bridge in two business combinations.
Net assets acquired mainly consisted 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, the contributions to Group’s revenue and
net earnings from the acquisition were DKK 445 million and DKK 186 million respectively.
Panbor
On 13 July 2022, Pandora took over 13 concept stores in Las Vegas from Panbor. Net assets acquired mainly
consisted 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
DKK million
2022
31 December
2021
31 December
Receivables related to third-party distribution and wholesale
747
672
Receivables related to retail revenue sales
515
337
Total trade receivables
1,262
1,009
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Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
35 | 41
gross margin from inventory buybacks, the contributions to the Group’s revenue and net earnings from the acquisition
were DKK 121 million and DKK 55 million respectively.
Portugal
On 20 July 2022, Pandora acquired the distribution in Portugal from the previous distributor, Visão do Tempo. The
acquisition comprised mainly inventories, non-current assets and liabilities relating to 25 concept stores and nine
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, the
contribution to the Group’s revenue and net earnings from the acquisition were DKK 99 million and DKK 51 million
respectively.
Other business combinations in 2022
Pandora acquired five more concept stores in the US and Italy in 2022. The purchase price was DKK 20 million. Assets
acquired mainly consisted 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 2022 was DKK 577 million. Based on the purchase price allocations,
goodwill was DKK 364 million. Goodwill from the acquisitions was mainly related to the synergies from converting the
stores from wholesale and distribution to Pandora owned retail. All the goodwill recognised was 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, the contributions to the Group’s revenue
and net earnings from the acquisitions for the period 1 January to 31 December 2022 were DKK 693 million and DKK
305 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 to 31 December 2022 would have been approximately
DKK 825 million and DKK 346 million respectively.
ACQUISITIONS
DKK million
FY 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
-14
-
Net cash flow on acquisitions
562
66
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
36 | 41
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
31 December
2021
31 December
Cost at 1 January
4,418
4,247
Acquisition of subsidiaries and activities in the period
364
12
Exchange rate adjustments
39
161
Cost at the end of the period
4,822
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 2022 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 2022.
NOTE 10 – Assets and liabilities related to leases
Amounts recognised in the balance sheet:
RIGHT-OF-USE ASSETS
DKK million
2022
31 December
2021
31 December
Property
2,960
2,507
IT
2
3
Cars
11
14
Other
5
8
Total right-of-use assets
2,978
2,532
Out of the total increase of DKK 0.5 billion in right-of-use-assets in the period 1 January to 31 December 2022, DKK
1.6 billion relates to renewals of lease contracts and new leases driven by network expansion and forward integration,
partially offset by a decrease of DKK 1.1 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
31 December
2021
31 December
Non-current
2,113
1,724
Current
950
886
Total lease liabilities
3,063
2,610
Lease liabilities are recognised in loans and borrowings.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
37 | 41
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 –
31 December 2022
1 January –
31 December 2021
Property
1,098
1,066
IT
1
1
Cars
11
9
Other
4
4
Total depreciation on right-of-use assets for the period
1,114
1,081
OTHER ITEMS RELATING TO LEASES
DKK million
1 January –
31 December 2022
1 January –
31 December 2021
Interest expense
162
99
Total interest for the period
162
99
Costs recognised in the period for short-term and low-value leases were DKK 60 million (2021: DKK 39 million).
Expenses are recognised on a straight- line basis.
Total cash outflow relating to leases was DKK 1,702 million for 2022 (2021: DKK 1,377 million), comprising fixed lease
payments in scope of IFRS 16 of DKK 1,068 million (2021: DKK 991 million), variable lease payments of DKK 412
million (2021: DKK 248 million), interest paid of DKK 162 million (2021: DKK 99 million), and short-term and low-value
leases of DKK 60 million (2021: DKK 39 million). Payments related to variable leases and short-term and low-value
leases are not included in the lease liabilities.
Due to the pandemic, Pandora received rent concessions from landlords in 2021 amounting to DKK 56 million, which
was recognised under sales and distribution expenses in the income statement. The impacts in 2022 were insignificant
due to limited COVID-19 closures.
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 on attractive terms, based on invoices approved by Pandora, but at the bank's sole
discretion. Pandora is not directly or indirectly a party to these agreements. The amounts payable to suppliers
included in the supply chain financing programme are classified as trade payables in the balance sheet as well as in
the statement of cash flows (working capital within cash flows from operations) and amounted to DKK 79 million at
31 December 2022 (2021: DKK 24 million).
NOTE 12 – Contingent liabilities
Reference is made to note 5.1 Contingent assets and liabilities to the consolidated financial statements in the Annual
Report 2022.
NOTE 13 – Related parties
Related parties with significant interests
Other related parties of Pandora include the Board, Executive Management and their close family members. Related
parties also include companies in which the aforementioned persons have control or significant interests.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
38 | 41
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 as a result of their membership of the Board, employment with
Pandora or shareholdings in Pandora.
NOTE 14 – Store network, concept store development
1,2
Total concept stores
O&O concept stores
Number
of concept
stores
Q4 2022
Number
of concept
stores
Q3 2022
Number
of concept
stores
Q4 2021
Growth
Q4 2022
/ Q3 2022
Growth
Q4 2022
/Q4 2021
Number
of concept
stores
O&O
Q4 2022
Growth
O&O
stores
Q4 2022
/ Q3 2022
Growth
O&O
stores
Q4 2022
/Q4 2021
US
420
405
388
15
32
270
15
83
China
252
232
214
20
38
234
20
38
UK
215
208
211
7
4
196
8
26
Italy
156
150
146
6
10
119
6
12
Australia
120
120
125
0
-5
41
0
-2
France
123
122
122
1
1
81
1
3
Germany
134
132
135
2
-1
131
2
-1
Total top-7 markets
1,420
1,369
1,341
51
79
1,072
52
159
Rest of Pandora
2
1,122
1,105
1,113
17
9
581
14
71
All markets
2,542
2,474
2,454
68
88
1,653
66
230
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 70% of the Group’s expected gold and silver consumption based on a rolling
12-month production plan. The table below illustrates the timing of the hedges related to the purchase of gold and
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 GOLD AND SILVER FOR PRODUCTION)
USD / OZ
Realised in
Q4 2022
Hedged
Q1 2023
Hedged
Q2 2023
Hedged
Q3 2023
Hedged
Q4 2023
Gold price
1,782
1,835
1,839
1,793
1,847
Silver price
22.14
23.48
21.75
20.42
22.27
Commodity hedge ratio, %
Realised
70-100%
70-90%
50-70%
30-50%
NOTE 16 – Subsequent events
As described in section Other events in the Management review and in Note 8 Business Combinations, Pandora is not
aware of events after 31 December 2022, which are expected to materially impact the Group’s financial position.
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
39 | 41
QUARTERLY OVERVIEW
DKK million
Q4 2022
Q3 2022
Q2 2022
Q1 2022
Q4 2021
Financial highlights
Revenue
9,856
5,263
5,655
5,689
9,011
Organic growth, %
4%
3%
3%
21%
10%
Sell-out growth (like-for-like), %
1
-1%
1%
2%
17%
11%
Earnings before interests, tax, depreciation and
amortisation (EBITDA)
3,712
1,496
1,737
1,772
3,267
Operating profit (EBIT)
3,206
978
1,249
1,310
2,678
EBIT margin, %
32.5%
18.6%
22.1%
23.0%
29.7%
Net financials
-155
-18
-27
-10
-211
Net profit for the period
2,365
734
934
995
1,904
Financial ratios
Revenue growth, DKK, %
9%
11%
10%
26%
14%
Revenue growth, local currency, %
6%
5%
4%
22%
11%
Gross margin, %
76.2%
76.7%
76.4%
76.0%
75.7%
EBITDA margin, %
37.7%
28.4%
30.7%
31.1%
36.3%
EBIT margin, %
32.5%
18.6%
22.1%
23.0%
29.7%
Effective tax rate, %
22.5%
23.5%
23.5%
23.5%
22.8%
Equity ratio, %
33%
26%
27%
28%
38%
NIBD to EBITDA, x
2
0.8
1.1
1.0
0.9
0.4
Return on invested capital (ROIC), % of last 12 months’ EBIT
48%
42%
46%
49%
59%
Cash conversion incl. lease payments, %
110%
0%
40%
-110%
147%
Net working capital, % of last 12 months’ revenue
4.2%
8.8%
5.8%
3.5%
-5.0%
Capital expenditure, % of revenue
4.7%
6.9%
5.4%
2.8%
2.4%
Stock ratios
Total payout ratio (incl. share buyback), %
33%
108%
77%
277%
143%
Consolidated balance sheet
Total assets
22,013
21,776
20,503
19,419
18,542
Invested capital
13,961
14,853
13,543
12,684
9,884
Net working capital
1,104
2,249
1,451
871
-1,181
Net interest-bearing debt (NIBD), incl. capitalised leases
6,794
9,174
7,926
7,157
2,882
Equity
7,167
5,679
5,617
5,526
7,001
Consolidated statement of cash flows
Cash flows from operating activities
4,075
542
928
-1,111
4,073
Capital expenditure, total
462
364
306
158
215
Capital expenditure, property, plant and equipment
349
260
236
83
146
Free cash flows incl. lease payments
3,538
0
506
-1,442
3,941
1
Sell-out growth includes 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 sale are not included in sell-out growth.
2
Ratio is based on 12 months’ rolling EBITDA.
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
40 | 41
MANAGEMENT STATEMENT
EXECUTIVE MANAGEMENT
BOARD
08 FEBRUARY 2023 | INTERIM FINANCIAL REPORT Q4 2022 | COMPANY ANNOUNCEMENT No. 767 | page
41 | 41
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.
