Q1 2O23
INTERIM FINANCIAL REPORT
03 May 2023 | Company Announcement No. 788
2
HIGHLIGHTS
02 Executive Summary
03 Financial Highlights
4
BUSINESS UPDATE
04 Business Update
07 Revenue Review
11 Profitability
14 Cash Flow & Balance Sheet
15 Financial Guidance
18 Sustainability
19 Other Events
20 Contact
21
FINANCIAL STATEMENTS
21 Financial Statements
25 Accounting Notes
35 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
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
2 | 35
EXECUTIVE SUMMARY
Resilient performance continues in uncertain times
Financial highlights
• Brand registers its fourth consecutive quarter of resilient growth despite the macroeconomic challenges.
• Q1 2023 organic growth at 1% and like-for-like (LFL) at 0%.
• LFL in key markets in Europe sequentially improves to 0%, US remains at -7% as in Q4 and Rest of Pandora
remains strong at 12%.
• Network expansion drives 3% growth and generates strong margins.
• Gross margins continue the upward trend witnessed over past years and reach 77.5%, +1.5pp vs. Q1 2022.
Pricing actions, channel mix and commodity tailwinds contribute positively.
• As expected, EBIT margin at 21.5% down 1.5pp vs. Q1 2022 reflecting a.o. revenue and cost phasing. Full-
year EBIT margin to be broadly in line with last year.
• Leverage remains low with NIBD/EBITDA at 1.2x. DKK 1.5 billion of share buyback program completed.
Assuming no material macroeconomic deterioration, intention remains to go up to DKK 5.0 billion.
Phoenix strategy highlights
• Pandora further consolidated Moment’s position as a leading category in global jewellery through launch of a
new iconic studded bracelet. The new bracelet sees strong demand across most geographies.
• Investments in other product platforms seeing encouraging results; Timeless had a strong quarter at 11% LFL
whilst Pandora ME also shows broad-based growth at 21% LFL. Diamonds by Pandora tracking as planned.
• Price increases undertaken in Q4 2022 drives a positive impact on the EBIT margin (broadly neutral on
revenue). Pandora sees further opportunities for price increases over time.
• China trading gradually improved following the re-opening and LFL is positive since late March. Pandora is
preparing for a phased relaunch of the brand later in the year.
2023 guidance and current trading
• Reflecting the solid start to the year, the organic growth guidance range is updated to “-2% to +3%”
(previously -3% to +3%). The EBIT margin guidance remains unchanged at “Around 25%”.
• Current trading in Q2 2023 has so far been resilient with underlying LFL trends broadly similar to Q1 2023.
The level of uncertainty remains elevated due to the macroeconomic environment.
Alexander Lacik, President and CEO of Pandora, says:
“We have started 2023 well with resilient growth and solid margins. Our investments in lifting the brand are paying
off with good performance in our Moments base business and strong results from the newer platforms, Timeless and
Pandora ME. It’s clear that we are increasingly the jewellery brand of choice, particularly for gifting occasions. The
macroeconomic outlook remains uncertain, but we are confident in our ability to adapt and thrive as we’ve proven
over the past few quarters.“
DKK million
Q1 2023
Q1 2022
FY 2022
FY 2023 guidance
Revenue
5,850
5,689
26,463
Organic growth
1%
21%
7%
-2% to 3%
Like-for-Like, %
0%
17%
4%
Operating profit (EBIT)
1,256
1,310
6,743
EBIT margin, %
21.5%
23.0%
25.5%
Around 25%
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
3 | 35
FINANCIAL HIGHLIGHTS
DKK million
Q1 2023
Q1 2022
FY 2022
Financial highlights
Revenue
5,850
5,689
26,463
Organic growth, %
1%
21%
7%
Like-for-Like, %
1
0%
17%
4%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
1,753
1,772
8,716
Operating profit (EBIT)
1,256
1,310
6,743
EBIT margin, %
21.5%
23.0%
25.5%
Net financials
-94
-10
-210
Net profit for the period
889
995
5,029
Financial ratios
Revenue growth, DKK, %
3%
26%
13%
Revenue growth, local currency, %
2%
22%
8%
Gross margin, %
77.5%
76.0%
76.3%
EBITDA margin, %
30.0%
31.1%
32.9%
EBIT margin, %
21.5%
23.0%
25.5%
Effective tax rate, %
23.5%
23.5%
23.0%
Equity ratio, %
24%
28%
33%
NIBD to EBITDA, x
1.2
0.9
0.8
Return on invested capital (ROIC), % of last 12 months’ EBIT
43%
49%
48%
Cash conversion incl. lease payments, %
-49%
-110%
39%
Net working capital, % of last 12 months’ revenue
8.8%
3.5%
4.2%
Capital expenditure, % of revenue
4.6%
2.8%
4.9%
Stock ratios
Total pay-out ratio (incl. share buyback), %
322%
277%
100%
Dividend per share, proposed, DKK
-
-
16
Dividend per share, paid, DKK
16
16
16
Earnings per share, basic, DKK
10.0
10.5
54.2
Earnings per share, diluted, DKK
10.0
10.4
53.7
Consolidated balance sheet
Total assets
21,519
19,419
22,013
Invested capital
15,481
12,684
13,961
Net working capital
2,332
871
1,104
Net interest-bearing debt (NIBD), incl. capitalised leases
10,227
7,157
6,794
Equity
5,254
5,526
7,167
Consolidated statement of cash flows
Cash flows from operating activities
-142
-1,111
4,434
Capital expenditure – total
270
158
1,290
Capital expenditure - property, plant and equipment
165
83
929
Free cash flows incl. lease payments
-614
-1,442
2,602
1
Like-for-Like growth include sell-out from all concept stores (including partner owned), owned and operated Shop in Shops and Pandora Online. Partner owned other points of sale are not
included in Like-for-Like. The KPI includes stores which have been operating for +12 months.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
4 | 35
BUSINESS UPDATE
Successfully navigating through macroeconomic uncertainties
Against a still challenging backdrop for consumers, Pandora delivered good revenue performance in Q1 2023 of 1%
organic growth with resilient LFL of 0%. This is now the fourth consecutive quarter that Pandora has delivered robust
LFL despite the macroeconomic environment, further highlighting how execution on the Phoenix strategy is
delivering. During the quarter, underlying trading patterns were broadly consistent through the months with the brand
continuing to win in key gifting moments of Valentine’s Day and UK Mother’s Day. Network growth contributed
positively at 3% growth – and with continued strong margins. Growth was partially offset through phasing of wholesale
sell-in of -2%.
Pandora’s geographical diversification remains a key pillar of its strength and continues to underpin the solid trading.
European key markets sequentially improved LFL growth to 0% with Germany particularly strong at 11% LFL.
Performance in the US was sequentially stable at -7% LFL despite slightly softer conversion rates. Rest of Pandora
continued to drive strong growth at 12% LFL with Spain and Mexico at 8% and 15%, respectively. Although early days,
Pandora has noticed a gradual, but continued pick-up in China since the re-opening in January 2023 and LFL growth
has been in positive territory since late March (with an easy comparison base in 2022 due to COVID-19).
It is now six months since Pandora rolled out selected price increases across its product portfolio. The price increase
has had a positive financial impact with a broadly neutral impact on revenue and approximately 0.6pp positive impact
on the EBIT margin. Pandora will be moving ahead with a structured, regular review to assess further opportunities for
price increases whilst continuing to stay true to the brand promise of affordable jewellery.
The external environment continues to remain promotional, but – as reflected in the gross margin - Pandora
maintained good discipline in Q1 2023 with promotional days broadly flat.
The new Pandora Studded Chain bracelet underpins future growth in Moments
During Q1 2023, Pandora launched a new iconic studded chain bracelet, developed more than two decades after the
iconic Pandora Snake chain bracelet. Combining craftsmanship and innovation in design exclusive to Pandora, the new
Pandora Studded Chain bracelet offers a completely different texture and canvas for styling. The bracelet is already
resonating very well with consumers with good demand across most geographies and drove solid incremental growth
within Pandora’s overall bracelet collection within the quarter. The innovation is yet another example of Pandora’s
journey of continuing to extract notable future value from Moments as it underpins future growth through the captive
business model which is unique to Pandora.
The strong growth within bracelets helped the Moments platform remain broadly stable at -3% LFL despite some
weakness in newer charms. Base products in Moments continued to perform strongly. Collaborations delivered -4%
LFL growth vs. Q1 2022, mostly reflecting the strong prior year comparative where growth was boosted by the launch
of Marvel. Collaborations this year will be phased through the quarters with the Disney 100 anniversary products
showing good demand already in Q1 2023.
Timeless has had a strong start delivering 11% LFL growth which was helped by elevated focus in the stores and strong
Valentine’s Day performance with the heart shaped designs resonating very well with consumers.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
5 | 35
Pandora ME sees good start. Expansion of assortment planned for Diamonds by Pandora
Pandora ME has started the year well with +21% LFL growth vs. Q1 2022. The growth was boosted by good
performance across many countries with base products performing well after Pandora previously optimised the
assortment. Pandora also launched the platform in China within the quarter which was well received and a small
contributor to growth also.
Revenue in the quarter for Diamonds by Pandora ended at DKK 34 million. Pandora continues to see vast growth
opportunities for the platform. Results from the launch in North America continue to highlight the great potential
the product category and brand can have together. The initial launch of Diamonds by Pandora included a narrow
product range. In Q3 2023, Pandora will expand the assortment to include more classical ranges and also take the
next steps in the geographical roll-out later in 2023. With this, marketing investments behind the platform will also
be increased to drive consumer awareness and future growth.
Moments incl. Collabs generated a gross margin of 77.0% in Q1 2023 while Style generated a gross margin of 79.4%
compared to 75.1% and 79.3% in Q1 2022, respectively. Overall, gross margin was up 1.5pp compared to Q1 2022,
please see the gross margin section for further details.
REVENUE BY SEGMENT
DKK million
Q1 2023
Q1 2022
1
Like-for-Like
Share of
revenue
Moments incl. Collabs
4,470
4,458
-3%
76%
- Moments
3,859
3,863
-3%
66%
- Collabs
610
595
-4%
10%
Style
1,381
1,231
9%
24%
- Timeless
949
829
11%
16%
- Signature
229
251
-12%
4%
- ME
169
142
21%
3%
- Diamonds by Pandora
34
9
247%
1%
Total revenue
5,850
5,689
0%
100%
1
Pandora has updated its collection structure by moving products from Style to Moments incl. Collabs in Q1 2023. Comparative figures for Q1 2022 were restated
accordingly by moving DKK 261 million from ‘Style’ to ‘Moments incl. Collabs’.
Network expansion drives strong growth, Evoke 2.0 debuts in Italy in April
In Q1 2023, Pandora saw an incremental revenue contribution of 3% from network expansion, mainly related to net
87 concept store openings vs Q1 2022. Forward integration which took place since Q1 2022 contributed another 1%
of incremental revenue for the quarter. Within Q1 2023, Pandora closed net -23 stores. This was mostly in China and
reflects phasing. Pandora is targeting net concept store openings of 50-100 during 2023 as well as 50-100 Pandora
operated other points of sale.
Pandora sees vast opportunity for expanding its network given the attractive value creation. This is mainly through
new store openings, but also potential takeovers or acquisition of franchise partners where it makes sense for both
parties. Network expansion could be accelerated by the current macroeconomic uncertainty as attractive locations
become available sooner.
Following extensive testing over the past two years Pandora opened doors in April to its brand-new store concept,
Evoke 2.0, with a refit of an existing store in Italy. This marks an important milestone for the brand as the new store
concept ensures a smoother consumer journey instore and more intuitive engagement across all of Pandora’s
platforms. Pandora targets to open over 40 Evoke 2.0 stores this year globally, including refits of existing stores. The
CAPEX per Evoke 2.0 store will be roughly in line with current levels.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
6 | 35
New credit rating and successful issuance of sustainability-linked bond
During Q1 2023, Pandora obtained public credit ratings from Moody’s, rated Baa2, and Standard & Poor’s, rated at
BBB. Both agencies highlighted the strong business model and cash generation profile of Pandora. Pandora also
announced a new Euro Medium Term Note (EMTN) programme and successfully placed an aggregate principal amount
of EUR 500 million senior unsecured sustainability-linked notes due 2028. Investor demand for the new issue peaked
at more than EUR 2 billion, following a two-day marketing exercise and the notes were issued at a price of 99.46 with
a fixed coupon of 4.500% per annum. The net proceeds from the transaction was applied by Pandora mainly for
planned refinancing.
Flexible cost structure protects margins in an uncertain macroeconomic environment
Since Q3 2022, Pandora has witnessed some shifts in consumer behavior reflecting the weaker macroeconomic
environment. Since then, Pandora has demonstrated its ability to adapt to the environment with good cost discipline
whilst not sacrificing key strategic objectives under Phoenix.
The external macroeconomic data continues to highlight a still challenging backdrop for consumers and Pandora will
continue with its prudent approach, demonstrating an ability to adapt to most scenarios. This is helped by:
- A favorable margin structure, strong cash generation and low financial leverage which mean 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. This includes accelerating the profitable network expansion as access to the desired
locations opens up during a recession.
- Several measures have already been initiated 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 in Thailand.
- 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 are mainly related to POS materials, variable rent, freight
costs and variable salary. Additionally, the majority of marketing expenses (13-15% of revenue) can be
adjusted with short notice.
Capital Markets Day 2023 – update on Phoenix strategy
Pandora hosted a Capital Markets Day in September 2021 providing financial targets covering the period 2021-2023.
Since then – and despite headwinds from COVID-19 in China and a worsening macroeconomic situation - Pandora
has made significant progress on the Phoenix strategy. At a Capital Markets Day on 5 October, 2023 in London,
Pandora will provide an update on the strategy and the next steps in driving sustainable and profitable growth.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
7 | 35
REVENUE REVIEW
Revenue growth continues in Q1 2023
Pandora delivered 0% LFL vs Q1 2022 and organic growth of 1%. Organic growth was supported by network expansion
contributing with 3%, following net 87 new concept store openings and 112 new owned and operated shop-in-shops
since Q1 2022. Finally, organic growth was negatively impacted by phasing of wholesale sell-in to franchise partners
– reversing the positive impact seen in Q4 2022. The network impact will be more visible in the group organic growth
from Q2 2023 as the sell-in phasing impact normalises.
Forward integration supported total revenue growth in local currency with 1%, mainly in the US and the acquisition of
the Portuguese distributor. Foreign exchange rates added a net tailwind of 1%, and driven by a stronger USD.
The revenue growth development can be illustrated as follows:
Q1 2023 growth composition vs Q1 2022
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
8 | 35
REVIEW OF REVENUE BY KEY MARKET
Like-for-like performance in Q1 driven by Europe
Pandora’s performance in Q1 2023 followed the underlying trends from Q4 2022, with LFL growth ending at 0%.
Many markets continued to see a challenging macroeconomic backdrop, but a strong brand, geographical
diversification and good execution mean Pandora continues to navigate smoothly in the current environment. The
main trading events in Q1 2023 were Valentine's Day and Mother’s Day in the UK. Pandora continued to shine in both
events with a strong marketing campaign and product offering.
US
Pandora US delivered -7% LFL vs Q1 2022, in line with the performance from Q4 2022. The performance in the US
was mixed across channels, as performance in the Pandora owned and operated concept stores improved from Q4
2022 to Q1 2023, while performance in the franchise channel was weaker. Conversion rates were also slightly lower
with some signs of heightened consumer hesitancy. Diamonds continued its trajectory from Q4 2022 with the average
incremental contribution to sales being broadly stable. The current Diamonds by Pandora offering is quite narrow and
the product range will be expanded later in 2023 while also opening up for selling diamonds in more stores. Pandora
expects Diamonds by Pandora to be a stronger contributor to LFL growth following launch of the expanded range.
Key markets in Europe
In aggregate, LFL for the key markets in Europe was 0% in Q1 2023 - up from -3% in Q4 2022, driven by a sequential
improvement in most countries.
The UK market delivered another resilient quarter with 1% LFL growth. Pandora ME and Timeless both had particularly
strong performance, which came across a backdrop of continued weak consumer sentiment in the UK and Pandora
witnessed some shifts towards lower priced points with consumers trading down. However, Pandora’s brand
positioning and execution remain strong, and Pandora expect to continue to benefit from this during the remainder
of 2023.
LFL growth was very strong in Germany and up 11% vs Q1 2022, continuing the solid trajectory seen during 2021 and
2022. Performance was slightly helped by easy comparison in Q1 2022 following COVID-19 restrictions, but the
business remains healthy with strong brand momentum. Pandora ME continues to gain strong traction with consumers
and Pandora continues to see vast long-term potential in the German market.
France and Italy saw a sequential improvement in LFL vs. Q4 2022, albeit both markets remain soft. In Italy the
consumer sentiment is still negative, but underlying trends are starting to improve. In France, the improvement in the
performance vs Q4 2022 was driven by the Pandora owned store network and the online business, while the wholesale
concept stores continued to be weak. The appointment of Laury Thilleman, a prominent French TV personality, model,
and journalist, as the new Pandora France Ambassador marks an important step in driving higher brand desirability in
France.
China
China reopened in January following a long period of COVID-19 constraints and ended Q1 2023 with a LFL of -26%,
an improvement vs the trajectory of 2022. Traffic in stores was down -17% vs Q1 2022 and sequentially improved
through the quarter but remains notably below normalized 2019 levels. LFL performance improved through the
quarter with March at -7% and the positive momentum continued into April which is now in positive territory on a
LFL basis (on an easy comparable 2022 base). Pandora is now preparing for a gradual re-launch later in the year.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
9 | 35
Australia and Rest of Pandora
Australia delivered -5% LFL vs Q1 2022, partly driven by weaker consumer sentiment in the region but also some
weakness in the wholesale channel. Pandora’s owned and operated concept stores remained solid and delivered 5%
LFL in Q1 2023.
Pandora’s business outside of the seven key markets continues to grow and was very strong again in Q1 2023. These
markets delivered a combined 12% LFL vs Q1 2022. The growth was strong in a broad range of markets all doing
double digit LFL including Portugal, Poland, Brazil and Turkey. Mexico and Spain continued its strong trajectory
delivering LFL of 15% and 8% respectively.
QUARTERLY REVENUE DEVELOPMENT BY KEY MARKET
DKK million
Q1 2023
Q1 2022
Like-for-Like
Organic growth
Share of revenue
US
1,716
1,650
-7%
-4%
29%
China
161
254
-26%
-35%
3%
UK
809
808
1%
6%
14%
Italy
539
586
-5%
-8%
9%
Australia
220
245
-5%
-9%
4%
France
243
262
-5%
-7%
4%
Germany
269
273
11%
-2%
5%
Total top-7 markets
3,958
4,077
-5%
-5%
68%
Rest of Pandora
1,892
1,612
12%
15%
32%
Total revenue
5,850
5,689
0%
1%
100%
For organic growth rates vs 2019, please refer to the Excel appendix uploaded on www.pandoragroup.com.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
10 | 35
REVIEW OF NETWORK DEVELOPMENT
Net 23 concept stores closures in Q1 2023 due to phasing, on track for 50-100 net openings in 2023
In the first quarter of 2023, Pandora has closed net 23 concept stores of which 15 was in China due to phasing. This
is in line with expectations and Pandora still plan to open net 50-100 concept stores and net 50-100 Pandora owned
Other points of sales in 2023. Majority of the openings is expected to happen towards the end of the year, similar to
2022.
Compared to Q1 2022, Pandora has opened net 87 concept stores, of which 26 has been opened in the US, and 112
Pandora owned Other points of sales. The 112 new Pandora owned other points of sales are shop-in-shops, such as
the cooperation in US with Macy’s where Pandora today operates 28 shop-in-shops. The openings in Macy’s
combined with openings in Latin America, in particular Mexico, contributes the majority of the 112 openings
compared with Q1 2022.
Number of points of sale
1,2
Q1 2023
Q4 2022
Q1 2022
Growth
Q1 2023
/Q4 2022
Growth
Q1 2023
/Q1 2022
Concept stores
2,519
2,542
2,432
-23
87
- of which Pandora owned
2
1,655
1,653
1,464
2
191
- of which franchise owned
562
588
637
-26
-75
- of which third-party distribution
302
301
331
1
-29
Other points of sale
3,964
3,985
4,006
-21
-42
- of which Pandora owned
2
469
464
357
5
112
- of which franchise owned
3,177
3,200
3,168
-23
9
- of which third-party distribution
318
321
481
-3
-163
Total points of sale
6,483
6,527
6,438
-44
45
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.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
11 | 35
PROFITABILITY
Maintaining strong profitability – gross margin continues to strengthen
The EBIT margin in Q1 2023 ended in line with expectations at 21.5%, down from 23.0% in Q1 2022. The decline is
driven by phasing of revenue as well as costs. As previously communicated, the EBIT margin progress this year is
skewed towards Q4 2023 as the phasing of revenue and costs normalises.
The EBIT margin continues to be supported by the solid gross margin trend, which has helped Pandora offset impacts
of higher inflationary pressures and perserve strong profitablity.
In Q1 2023, the underlying EBIT was impacted by abovementioned cost phasing, mainly attributed to strategic
investments as part of Phoenix, and elevated salary increases. Pandora has seen positive results from the price
increases and reduced marketing spend, which was positively impacted by last year's global media tender. Silver prices
and Foreign exchange rates represent a net headwind of 50bp mainly driven by a stronger Thai Baht and weaker British
Pound somewhat offset by lower realised silver prices.
The drag on margin from inventory buy-backs relating to forward integration was less than last year and therefore
had a net positive impact of 50bp on the gross margin and EBIT margin vs Q1 2022.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
12 | 35
GROSS MARGIN
The gross margin continued its upward trend witnessed over the past years and improved by 150bp compared to Q1
2022. The increase was driven by the previously implemented price increases in Q4 2022, which had a positive impact
on profit and favourable channel mix with more sales coming through physical O&O stores. Against this, unfavourable
developments in foreign exchange rates constituted a headwind of 120bp, partly offset by favourable changes to
commodity prices, mainly on silver, which provided an upside of 50bp.
Non-recurring costs impacted the gross margin positively by 1pp compared to Q1 2022. Lower temporary costs
related to buying back inventories during forward integration impacted the gross margin positively by 50bp and
another 50bp tailwind came from the fall out of COVID-19 related costs in Thailand.
GROSS MARGIN AND GROSS PROFIT
DKK million
Q1 2023
Q1 2022
Growth in constant
FX
Revenue
5,850
5,689
2%
Cost of sales
-1,315
-1,365
-9%
Gross profit
4,536
4,324
6%
Gross margin
77.5%
76.0%
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
13 | 35
OPERATING EXPENSES
Total operating expenses increased by 8% in constant foreign exchange rates vs Q1 2022. This was mainly driven by
the profitable expansion of the Pandora owned physical network – reflected in the 13% increase in sales and
distribution cost.
Administrative expenses increased by 10% in constant foreign exchange rates vs Q1 2022. This was mainly driven by
Phoenix investments into digital, including a new ERP platform, the people and talent agenda as well as one-offs
related to organisational changes.
Last year’s global media tender resulted in lower advertising costs, and consequently marketing expenses decreased
by 4% in constant foreign exchange rates compared to last year. Full year marketing costs are still expected to be
within the 13-15% range of full year revenue.
OPERATING EXPENSES
DKK million
Q1 2023
Q1 2022
Growth in
constant FX
Share of
revenue
Q1 2023
Share of revenue
Q1 2022
Sales and distribution expenses
-2,003
-1,760
13%
34.2%
30.9%
Marketing expenses
-715
-745
-4%
12.2%
13.1%
Administrative expenses
-562
-509
10%
9.6%
9.0%
Total operating expenses
-3,280
-3,014
8%
56.1%
53.0%
FINANCIAL EXPENSES AND TAX
Net financials in Q1 2023 ended at a cost of DKK 94 million and was driven by increased interest rates, which impacted
IFRS 16 related interest on lease payments and interests on loans. The net realised profit on foreign exchange hedging
contracts was negligible.
The effective tax rate ended at 23.5% for Q1 2023, at the mid-point of the guided range of 23-24% and in line with
Q1 2022. EPS ended at DKK 10 per share in Q1 2023, slightly below Q1 2022.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
14 | 35
CASH FLOW & BALANCE SHEET
Increased net working capital driven by deliberate inventory build up in 2022
The net working capital ended at 8.8% of the last 12 months revenue compared to 3.5% in Q1 2022. The increase is
mainly driven by last year’s deliberate inventory build-up as well as a decrease in payables and increased other net
working capital elements due to among other increased market values on silver hedges. Inventories ended at 16.3%,
in line with Q4 2022. The full year inventory position is expected to land broadly in line with last year.
Trade receivables continues to be at a healthy level with wholesale Days Sales Outstanding (DSO) ending at 33 days,
vs 28 days in Q1 2022. Total DSO, including retail receivables, ended at 13 days by the end of Q1 2023, slightly above
Q1 2022 of 12 days.
In line with normal seasonality, cash conversion was negative in Q1, but better than in Q1 during the last couple of
years. Free cash flow incl. lease payments ended at DKK -614 million corresponding to a cash conversion of -49%.
CAPEX ended at 4.6% of revenue and is expected to increase during the rest of 2023, among others driven by phasing
of the network expansion, targeting full year CAPEX at around 6% of revenue.
ROIC continues to be strong at 43% but down vs 49% in Q1 2022. The decrease is 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
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Q1 2022
Inventories
16.3%
15.9%
20.1%
16.9%
14.4%
Trade receivables
3.2%
4.8%
3.4%
2.6%
3.2%
Trade payables
-8.2%
-11.8%
-10.4%
-9.5%
-10.2%
Other net working capital elements
-2.4%
-4.7%
-4.3%
-4.2%
-3.9%
Total
8.8%
4.2%
8.8%
5.8%
3.5%
Balance Sheet
Total non-current assets increased to DKK 14.4 billion at the end of Q1 2023 (Q1 2022: DKK 13.0 billion), mainly due
to an increase in goodwill from acquisitions, an overall higher CAPEX 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 in 2022.
Net interest-bearing debt amounted to DKK 10.2 billion at the end of Q1 2023 (Q1 2022: DKK 7.2 billion),
corresponding to a financial leverage of 1.2x (Q1 2022: 0.9x). The increase in net interest-bearing debt is mainly
driven by cash distributions to shareholders following Pandora’s decision to slightly lift leverage from the low end of
the capital structure range of 0.5x to 1.5x NIBD to EBITDA (year-end measure) to around the mid-point of the range.
At the end of Q1 2023, equity in Pandora amounted to DKK 5.3 billion, down from DKK 7.2 billion by year end 2022
reflecting usual seasonality driven by distributions to shareholders in the form of dividends and share buybacks.
Pandora paid out DKK 1.4 billion in dividends and bought back shares for an amount of DKK 1.4 billion in Q1 2023.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
15 | 35
FINANCIAL GUIDANCE
Resiliency in an uncertain environment
The brand has demonstrated good resilience since the macroeconomic conditions started to worsen during 2022.
The economic outlook for the remainder of 2023 remains uncertain. High inflation and rising interest rates suggest
that consumer spending will continue to be under pressure.
Pandora has started the year well with continued resilience in Q1. Pandora therefore updates its financial guidance
to “organic growth of -2% to 3%” (previously -3% to 3%). The EBIT margin guidance remains unchanged at “Around
25%”. The low end of the updated organic growth range would require a consistent worsening of trading conditions
relative to today.
Whilst the short-term macroeconomic environment is challenging, Pandora’s internal initiatives to position for
sustainable growth continue unabated. The group will continue to focus on driving higher brand desirability, acquiring
new customers, and expanding the network. The mid to long-term prospects for delivering healthy LFL and organic
growth remain as strong as ever.
REVENUE GUIDANCE
Pandora is currently expecting a LFL growth between -4% to 0%, depending on how macroeconomic conditions
progress through the year. Continued network expansion is expected to add 3% to growth (up from previously 2-3%)
and help lift organic growth to -2% to 3%. Forward integration is expected to add around 1% with revenue growth in
local currency ending at -1% to 4%.
The organic growth guidance can be illustrated as follows:
PROFITABILITY GUIDANCE
The EBIT margin guidance for 2023 is unchanged at Around 25%. The building blocks include temporary and non-
recurring costs from 2022 which are expected to drive a tailwind of 0.8pp. Structural cost reductions and the price
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
16 | 35
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 while foreign exchange rates and
commodity assumptions per 28 April 2023 currently represent a net headwind of 0.5pp.
Operating leverage at the mid-point of the current organic growth guidance is expected to be broadly neutral, seeing
the EBIT margin reach around 25% for FY 2023. Depending on the organic growth outcome, Pandora can demonstrate
an extra layer of cost flexibility to either underpin the EBIT margin further or invest for growth. The EBIT margin
phasing through the year is expected to be more skewed towards Q4 than in 2022. This reflects, among others,
phasing of costs, hedged silver prices and foreign exchange rates.
The EBIT margin guidance can be illustrated as follows:
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 35.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
17 | 35
FOREIGN EXCHANGE AND COMMODITY ASSUMPTIONS AND IMPLICATIONS – As of 28 April 2023
Average 2022
Average 2023
2023 Y-Y
Financial Impact
USD/DKK
7.07
6.83
THB/DKK
0.20
0.20
GBP/DKK
8.73
8.46
CNY/DKK
1.05
0.99
AUD/DKK
4.91
4.54
Silver/USD (per ounce)
24.9
22.7
REVENUE (DKK million)
Approx. -675
EBIT (DKK million)
Approx. -290
EBIT margin (foreign exchange)
Approx. -1.1%
EBIT margin (commodities)
Approx. 0.6%
CAPITAL STRUCTURE POLICY AND CASH DISTRIBUTION
At the end of March 2023, Pandora’s leverage remains low at 1.2x NIBD to EBITDA. The increase in leverage versus
the end of December 2022 is in line with expectations as previously communicated and primarily reflects significant
cash distributions to the shareholders.
In Q1 2023, Pandora has paid out DKK 1.4 billion as an ordinary dividend of DKK 16 per share and DKK 1.4 billion
through share buybacks. In total, Pandora plans to pay out up to DKK 6.4 billion to its shareholders in the period from
8 February 2023 to 2 February 2024, both days inclusive, and assuming no material deterioration in the
macroeconomic climate.
At Pandora A/S’ Annual General Meeting on 16 March 2023, it was resolved to reduce the Company’s share capital
with a nominal amount of DKK 6,500,000 by cancellation of 6,500,000 treasury shares of DKK 1. The share capital
reduction was announced in the Danish Business Authority's IT-system on 16 March 2023 and the 4-week notification
period has expired with no objections. The Board of Directors has therefore resolved to effect the share capital
reduction on 15 April 2023. After reduction of the share capital, the Company’s share capital is nominally DKK
89,000,000, divided into shares of DKK 1.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
18 | 35
SUSTAINABILITY
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
19 | 35
OTHER EVENTS
At Pandora A/S ’ Annual General Meeting on 16 March 2023, it was resolved to reduce the Company’s share capital
with a nominal amount of DKK 6,500,000 by cancellation of 6,500,000 treasury shares of DKK 1. The share capital
reduction was announced in the Danish Business Authority's IT-system on 16 March 2023 and the 4-week notification
period has expired with no objections. The Board of Directors has therefore resolved to effect the share capital
reduction on 15 April 2023. After reduction of the share capital, the Company’s share capital is nominally DKK
89,000,000, divided into shares of DKK 1.
On 1
st
April 2023, Pandora has extended the maturity of the revolving credit facilities by one year and the maturity
has been updated to April 2028.
FINANCIAL CALENDAR 2023
The expected dates for publication of financial announcements in 2023 for Pandora A/S are as follows:
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
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
20 | 35
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/Q1-2023
ABOUT PANDORA
through 6,500 points of sale, including more than 2,500 concept stores.
Headquartered in Copenhagen , Denmark , Pandora employs 32,000 people worldwide and crafts its jewellery at two
LEED-certified facilities in Thailand. Pandora is committed to leadership in sustainability and will purchase only
recycled silver and gold for crafting its jewellery by 2025 and halve greenhouse gas emissions across its value chain
by 2030. Pandora is listed on the Nasdaq Copenhagen stock exchange and generated sales 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
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
21 | 35
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
DKK million
Notes
Q1 2023
Q1 2022
FY 2022
Revenue
3
Cost of sales
-1,315
-1,365
-6,273
Gross profit
Sales, distribution and marketing expenses
-2,718
-2,505
-11,322
Administrative expenses
-562
-509
-2,125
Operating profit
Finance income
Finance costs
-186
-98
-622
Profit before tax
Income tax expense
-273
-306
-1,504
Net profit for the period
Earnings per share, basic, DKK
Earnings per share, diluted, DKK
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million
Q1 2023
Q1 2022
FY 2022
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
-41
-196
Fair value adjustment of hedging instruments
Tax on other comprehensive income, hedging instruments, income/expense
-39
Items that may be reclassified to profit/loss for the period, net of tax
-4
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
-4
Total comprehensive income for the period
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
22 | 35
CONSOLIDATED BALANCE SHEET
DKK million
Notes
2023
31 March
2022
31 March
2022
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
-4,489
-4,458
-3,320
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
11
Income tax payable
Other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
23 | 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
DKK million
Share
capital
Treasury
shares
Translation
reserve
Hedging
Reserve
Dividend
proposed
Retained
earnings
Total
equity
2023
Equity at 1 January
-3,320
Net profit for the period
Other comprehensive income, net of tax
-29
-4
Total comprehensive income for the period
-29
Share-based payments
-217
Purchase of treasury shares
-1,446
-1,446
Dividend paid
-1,412
-1,412
Dividend proposed
-18
Equity at 31 March
-4,489
2022
Equity at 1 January
-3,416
-110
Net profit for the period
Other comprehensive income, net of tax
Total comprehensive income for the period
Share-based payments
-163
Purchase of treasury shares
-1,239
-1,239
Dividend paid
-1,516
-1,514
Equity at 31 March
-4,458
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
24 | 35
CONSOLIDATED STATEMENT OF CASH FLOWS
The above cannot be derived directly from the income statement and the balance sheet.
DKK million
Notes
Q1 2023
Q1 2022
FY 2022
Operating profit
Depreciation and amortisation
Share-based payments
Change in inventories
-82
-354
-1,012
Change in receivables
-531
Change in payables and other liabilities
-1,894
-1,811
-559
Other non-cash adjustments
-18
Finance income received
Finance costs paid
-116
-100
-466
Income taxes paid
-396
-733
-1,790
Cash flows from operating activities, net
-142
-1,111
Acquisitions of subsidiaries and activities, net of cash acquired
8
-45
-291
-562
Purchase of intangible assets
-114
-65
-353
Purchase of property, plant and equipment
-226
-99
-838
Change in other assets
-36
Proceeds from sale of property, plant and equipment
Cash flows from investing activities, net
-377
-447
-1,785
Dividend paid
-1,412
-1,514
-1,514
Dividend paid – withholding tax
Purchase of treasury shares
-1,449
-1,239
-3,527
Proceeds from loans and borrowings
Repayment of loans and borrowings
-3,160
-1,985
Repayment of lease commitments
-251
-274
-1,068
Cash flows from financing activities, net
-3,100
Net increase/decrease in cash
-301
-355
-452
Cash and cash equivalents, beginning of period
Exchange gains/losses on cash
-7
Net increase/decrease in cash
-301
-355
-452
Cash and cash equivalents, end of period
Cash balances
Overdrafts
-253
-199
Cash and cash equivalents, end of period
Cash flows from operating activities, net
-142
-1,111
- Finance income received
-5
-1
-7
- Finance costs paid
Cash flows from investing activities, net
-377
-447
-1,785
- Acquisition of subsidiaries and activities, net of cash acquired
Repayment of lease commitments
-251
-274
-1,068
Free cash flows incl. lease payments
-614
-1,442
Unutilised committed credit facilities
5
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
25 | 35
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. Apart from the ‘Free cash flows incl. lease payments’ which is
defined as cash flows from operating activities, excluding financial items; cash flows from investing activities excluding
acquisitions of subsidiaries and activities and includes the repayment of lease commitments, 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 2023. 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.
In Q1 2023, Pandora updated its collection structure by moving products across Signature and Timeless into the
Moments platform. The strategic reasoning centres around personalisation and becoming more customer centric,
leading to a centralised platform for congruent charms and charm holders.
The two operating segments include all channels relating to the distribution and sale of Pandora products.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
26 | 35
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.
SEGMENT INFORMATION
DKK million
Moments incl.
Collabs
Style
Group
Q1 2023
Revenue
4,470
1,381
5,850
Cost of sales
-1,030
-285
-1,315
Gross profit
3,440
1,096
4,536
Operating expenses
-3,280
Consolidated operating profit (EBIT)
1,256
Profit margin (EBIT margin)
21.5%
Q1 2022
1
Revenue
4,458
1,231
5,689
Cost of sales
-1,110
-255
-1,365
Gross profit
3,348
976
4,324
Operating expenses
-3,014
Consolidated operating profit (EBIT)
1,310
Profit margin (EBIT margin)
23.0%
REVENUE BY SEGMENTS
DKK million
Q1 2023
Q1 2022
1
Like-for-like
Local currency
growth
Share of
Revenue
Moments incl. Collabs
4,470
4,458
-3%
0%
76%
- Moments
3,859
3,863
-3%
-1%
66%
- Collabs
610
595
-4%
1%
10%
Style
1,381
1,231
9%
12%
24%
- Timeless
949
829
11%
14%
16%
- Signature
229
251
-12%
-8%
4%
- ME
169
142
21%
18%
3%
- Diamonds by Pandora
34
9
247%
278%
1%
Total revenue
5,850
5,689
0%
2%
100%
Goods transferred at a point in time
5,836
5,672
Services transferred over time
15
17
Total revenue
5,850
5,689
1
Pandora has updated its collection structure by moving products from Style to Moments incl. Collabs in Q1 2023. Comparative figures for Q1 2022 were restated
accordingly by moving DKK 261 million from ‘Style’ to ‘Moments incl. Collabs’.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
27 | 35
REVENUE DEVELOPMENT IN THE KEY MARKETS
DKK million
Q1 2023
Q1 2022
Like-for-like
Growth in
local currency
US
1,716
1,650
-7%
-1%
China
161
254
-26%
-35%
UK
809
808
1%
6%
Italy
539
586
-5%
-8%
Australia
220
245
-5%
-9%
France
243
262
-5%
-7%
Germany
269
273
11%
-2%
Total top-7 markets
3,958
4,077
-5%
-4%
Rest of Pandora
1,892
1,612
12%
17%
Total revenue
5,850
5,689
0%
2%
REVENUE DEVELOPMENT BY CHANNEL
DKK million
Q1 2023
Q1 2022
Organic
growth
Share of
Revenue
Pandora owned
1
retail
4,391
3,925
7%
75%
- of which concept stores
2,901
2,445
12%
50%
- of which online stores
1,144
1,219
-6%
20%
- of which other points of sale
346
261
25%
6%
Wholesale
1,283
1,567
-15%
22%
- of which concept stores
653
833
-14%
11%
- of which other points of sale
630
734
-17%
11%
Third-party distribution
176
198
2%
3%
Total revenue
5,850
5,689
1%
100%
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.
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.
During Q1 2023, Pandora obtained public credit ratings from Moody’s, rated Baa2, and Standard & Poor’s, rated at
BBB. Both agencies highlighted the strong business model and cash generation profile of Pandora. Pandora also
announced a new Euro Medium Term Note (EMTN) programme and successfully placed an aggregate principal amount
of EUR 500 million senior unsecured sustainability-linked notes due 2028. The notes were issued at a price of 99.46
with a fixed coupon of 4.500% per annum. The net proceeds from the transaction was applied by Pandora mainly for
planned refinancing.
Net interest-bearing debt (NIBD), incl. capitalised leases amounted to DKK 10.2 billion at the end of Q1 2023 (Q4
2022: DKK 6.8 billion) corresponding to a financial leverage of 1.2x (Q4 2022: 0.8x).
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
28 | 35
Outstanding committed loan facilities (end of March 2023)
Available facilities
DKK million
Maturity date
Drawn amount
DKK million
Available
liquidity
Revolving credit facilities
1
7,076
April 2027
2,837
4,239
Term loan maturing in 2030
1
745
May 2030
745
-
Bond maturing in 2028
1
3,724
April 2028
3,724
-
Total outstanding committed loan facilities
11,545
7,306
4,239
1
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
DKK million
2023
31 March
2022
31 December
Receivables related to third-party distribution and wholesale
535
747
Receivables related to retail revenue
304
515
Total trade receivables
840
1,262
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
29 | 35
NOTE 8 – Business combinations
In Q1 2023, Pandora took over 4 concept stores in the US 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
40 million. Based on the purchase price allocations, goodwill was DKK 14 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.
ACQUISITIONS
DKK million
Q1 2023
FY 2022
Property, plant and equipment and right-of-use assets
60
159
Inventories
19
195
Assets acquired
79
354
Non-current liabilities
43
78
Payables
1
3
Other current liabilities
10
61
Liabilities assumed
54
141
Total identifiable net assets acquired
25
213
Goodwill arising on the acquisitions
14
364
Purchase consideration
40
577
Cash movements on acquisitions:
Consideration transferred regarding previous years
1
6
-
Deferred payment
-
-14
Net cash flow on acquisitions
45
562
1
The deferred payment of DKK 6 million related to the acquisition in Portugal in 2022 is paid in 2023.
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
2023
31 March
2022
31 December
Cost at 1 January
4,822
4,418
Acquisition of subsidiaries and activities in the period
14
364
Exchange rate adjustments
-38
39
Cost at the end of the period
4,798
4,822
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.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
30 | 35
NOTE 10 – Assets and liabilities related to leases
Amounts recognised in the balance sheet:
RIGHT-OF-USE ASSETS
DKK million
2023
31 March
2022
31 December
Property
3,093
2,960
IT
1
2
Cars
10
11
Other
5
5
Total right-of-use assets
3,109
2,978
Out of the total increase of DKK 0.1 billion in right-of-use-assets in the period 1 January to 31 March 2023, DKK 0.4
billion relates to renewals of lease contracts and new leases driven by network expansion and forward integration,
partially offset by a decrease of DKK 0.3 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
2023
31 March
2022
31 December
Non-current
2,190
2,113
Current
1,006
950
Total lease liabilities
3,196
3,063
Lease liabilities are recognised in loans and borrowings.
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 March 2023
1 January –
31 March 2022
Property
279
262
Cars
2
2
Other
1
1
Total depreciation on right-of-use assets for the period
283
266
The vast majority of depreciation relates to leased stores and is presented in the sales and distribution expenses.
OTHER ITEMS RELATING TO LEASES
DKK million
1 January –
31 March 2023
1 January –
31 March 2022
Interest expense
56
28
Total interest for the period
56
28
Costs recognised in the period for short-term and low-value leases were DKK 15 million (2022 Q1: DKK 12 million).
Expenses are recognised on a straight- line basis.
Total cash outflow relating to leases was DKK 428 million for 2023 Q1 (2022 Q1: DKK 398 million), comprising fixed
lease payments in scope of IFRS 16 of DKK 251 million (2022 Q1: DKK 274 million), variable lease payments of DKK
106 million (2022 Q1: DKK 84 million), interest paid of DKK 56 million (2022 Q1: DKK 28 million), and short-term and
low-value leases of DKK 15 million (2022 Q1: DKK 12 million). Payments related to variable leases and short-term and
low-value leases are not included in the lease liabilities.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
31 | 35
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 107 million at
31 March 2023 (31 March 2022: DKK 71 million).
NOTE 12 – Contingent assets and liabilities
Reference is made to note 5.1 Contingent assets and liabilities to the consolidated financial statements in the Annual
Report 2022.
The discussions of any potential insurance compensation for Pandora’s European Distribution Center, located in
Hamburg, Germany, that was affected by a fire in October 2022, are still ongoing with the insurers. Due to the
premature state of discussions and the associated uncertainties, Pandora has not recognised an indemnity claim
under the business interruption insurance policy as of 31 March 2023.
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.
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
Total concept stores
O&O concept stores
Number
of concept
stores
Q1 2023
Number
of concept
stores
Q4 2022
Number
of concept
stores
Q1 2022
Growth
Q1 2023
/ Q4 2022
Growth
Q1 2023
/Q1 2022
Number
of concept
stores
O&O
Q1 2023
Growth
O&O
stores
Q1 2023
/ Q4 2022
Growth
O&O
stores
Q1 2023
/Q1 2022
US
417
420
391
-3
26
277
7
53
China
237
252
209
-15
28
224
-10
33
UK
211
215
208
-4
3
196
0
20
Italy
155
156
146
-1
9
118
-1
11
Australia
120
120
124
0
-4
42
1
-1
France
120
123
120
-3
0
80
-1
2
Germany
132
134
133
-2
-1
129
-2
-1
Total top-7 markets
1,392
1,420
1,331
-28
61
1,066
-6
117
Rest of Pandora
2
1,127
1,122
1,101
5
26
589
8
74
All markets
2,519
2,542
2,432
-23
87
1,655
2
191
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.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
Accounting
notes
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
32 | 35
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, 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
Q1 2023
Hedged
Q2 2023
Hedged
Q3 2023
Hedged
Q4 2023
Hedged
Q1 2024
Gold price
1,795
1,846
1,858
1,821
1,891
Silver price
23.00
23.35
22.39
21.53
22.51
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 March 2023, which are expected to materially impact the Group’s financial position.
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
33 | 35
QUARTERLY OVERVIEW
DKK million
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Q1 2022
Financial highlights
Revenue
5,850
9,856
5,263
5,655
5,689
Organic growth, %
1%
4%
3%
3%
21%
Like-for-Like, %
1
0%
-1%
1%
2%
17%
Earnings before interests, tax, depreciation and
amortisation (EBITDA)
1,753
3,712
1,496
1,737
1,772
Operating profit (EBIT)
1,256
3,206
978
1,249
1,310
EBIT margin, %
21.5%
32.5%
18.6%
22.1%
23.0%
Net financials
-94
-155
-18
-27
-10
Net profit for the period
889
2,365
734
934
995
Financial ratios
Revenue growth, DKK, %
3%
9%
11%
10%
26%
Revenue growth, local currency, %
2%
6%
5%
4%
22%
Gross margin, %
77.5%
76.2%
76.7%
76.4%
76.0%
EBITDA margin, %
30.0%
37.7%
28.4%
30.7%
31.1%
EBIT margin, %
21.5%
32.5%
18.6%
22.1%
23.0%
Effective tax rate, %
23.5%
22.5%
23.5%
23.5%
23.5%
Equity ratio, %
24%
33%
26%
27%
28%
NIBD to EBITDA, x
2
1.2
0.8
1.1
1.0
0.9
Return on invested capital (ROIC), % of last 12 months’ EBIT
43%
48%
42%
46%
49%
Cash conversion incl. lease payments, %
-49%
110%
0%
40%
-110%
Net working capital, % of last 12 months’ revenue
8.8%
4.2%
8.8%
5.8%
3.5%
Capital expenditure, % of revenue
4.6%
4.7%
6.9%
5.4%
2.8%
Stock ratios
Total payout ratio (incl. share buyback), %
322%
33%
108%
77%
277%
Consolidated balance sheet
Total assets
21,519
22,013
21,776
20,503
19,419
Invested capital
15,481
13,961
14,853
13,543
12,684
Net working capital
2,332
1,104
2,249
1,451
871
Net interest-bearing debt (NIBD), incl. capitalised leases
10,227
6,794
9,174
7,926
7,157
Equity
5,254
7,167
5,679
5,617
5,526
Consolidated statement of cash flows
Cash flows from operating activities
-142
4,075
542
928
-1,111
Capital expenditure, total
270
462
364
306
158
Capital expenditure, property, plant and equipment
165
349
260
236
83
Free cash flows incl. lease payments
-614
3,538
-
506
-1,442
1
Like-for-Like growth include sell-out from all concept stores (including partner owned), owned and operated Shop in Shops and Pandora Online. Partner owned
other points of sale are not included in Like-for-Like. The KPI includes stores which have been operating for +12 months.
2
Ratio is based on 12 months’ rolling EBITDA.
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
34 | 35
MANAGEMENT STATEMENT
EXECUTIVE MANAGEMENT
BOARD
03 MAY 2023 | INTERIM FINANCIAL REPORT Q1 2023 | COMPANY ANNOUNCEMENT No. 788 | page
35 | 35
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.
