Q1 2O24
INTERIM FINANCIAL REPORT
2 May 2024 | Company Announcement No. 864
Havneholmen 17-19 | DK-1561 Copenhagen V | Denmark | www.pandoragroup.com | Company reg. no.: 2850 5116
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 aims to be not only the largest, but also the most desirable jewellery brand in
the accessible luxury market, making high-quality jewellery available to the many. The
jewellery market has historically grown faster than GDP and remains highly
fragmented, with global brands set to outgrow the overall market.
Pandora’s jewellery is designed to empower self-expression and be culturally relevant.
It is hand-finished by skilled craftspeople and meets the highest sustainability
standards in the industry. Pandora’s unique business model is vertically integrated
from design and crafting to direct-to-consumer channels, and the company has built
unrivalled scale in manufacturing, retail distribution and brand presence.
Pandora’s growth strategy Phoenix leverages the company’s existing infrastructure to
pursue numerous untapped growth opportunities and gain higher market share across
geographies and jewellery categories. With its proven financial model, Pandora
expects to outgrow the market with high-single digit organic growth while achieving
best-in-class profitability. Thanks to its asset-light approach, the company also
expects to deliver significant free cash flow, of which the vast majority will be
returned to shareholders and result in mid-to-high teens EPS growth.
CONTENTS
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
2 | 35
EXECUTIVE SUMMARY
Pandora delivers 18% organic growth in Q1 – raises 2024 revenue guidance
Financial highlights
• The second phase of Pandora’s Phoenix strategy is off to a strong start. Increased investments are
elevating brand desirability and showcasing Pandora’s position as a full jewellery brand.
• Continued momentum, helped by the early restaging of the brand, drives strong Q1 2024 trading; organic
growth ends at 18% with Like-for-like (LFL) growth of 11% and network expansion of 5%.
• In absolute terms, revenue increased by DKK 1.0 billion compared to Q1 2023.
• LFL growth in key European markets of 9%, US remaining solid at 9% and Rest of Pandora at 18%.
• The gross margin reached a new record-high of 79.4%, +190bp vs Q1 2023, supported by channel mix,
pricing and efficiencies, as well as some tailwind from silver prices and foreign exchange rates.
• The Q1 2024 EBIT margin landed at 22.0%, +50bp ahead of last year, reflecting the strong growth which
more than offset the planned step-up in marketing investments as part of the restaging of the brand.
• Leverage remains low at a NIBD/EBITDA of 1.3x. Early February, Pandora initiated a new DKK 4.0 billion
share buyback programme, and in Q1 2024 EPS increased 18% compared to last year.
Phoenix strategy highlights
• Pandora’s brand strategy, which centres on transforming the perception of Pandora into a full jewellery
brand, was ignited in Q1 through the launch of the new multi-season “BE LOVE” marketing campaign.
• The strategy is resonating with consumers and drove LFL growth across Pandora’s collections. The Core
segment delivered 3% LFL growth whilst Fuel with more delivered 34% LFL growth. Within the Fuel with
more segment, Timeless continued its momentum with 43% growth, while Pandora Lab-Grown Diamonds
also saw progress with 87% growth.
2024 Guidance and current trading
• The organic growth guidance is upgraded to “8-10%” (previously “6-9%”). The EBIT margin guidance
remains unchanged at “around 25%”.
• Current trading in Q2 2024 has so far remained healthy with high single-digit LFL growth.
Alexander Lacik, President and CEO of Pandora, says:
“We are very pleased with our start to the year, as we embark on the next chapter of Phoenix. Whilst jewellery markets
around us generally remain subdued, our ongoing brand investments allow us to take market share. We raise our
revenue guidance and look forward to keep fuelling our growth with exciting strategic initiatives over the coming
years.”
DKK million
Q1 2024
Q1 2023
FY 2023
FY 2024 guidance
Revenue
6,834
5,850
28,136
Organic growth, %
18%
1%
8%
8-10%
Like-for-like, %
11%
0%
6%
Operating profit (EBIT)
1,507
1,256
7,039
EBIT margin, %
22.0%
21.5%
25.0%
Around 25%
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
3 | 35
FINANCIAL HIGHLIGHTS
DKK million
Q1 2024
Q1 2023
FY 2023
Financial highlights
Revenue
6,834
5,850
28,136
Organic growth, %
18%
1%
8%
Like-for-like, %
1
11%
0%
6%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
2,067
1,753
9,118
Operating profit (EBIT)
1,507
1,256
7,039
EBIT margin, %
22.0%
21.5%
25.0%
Net financials
-229
-94
-805
Net profit for the period
965
889
4,740
Financial ratios
Revenue growth, DKK, %
17%
3%
6%
Revenue growth, local currency, %
19%
2%
9%
Gross margin, %
79.4%
77.5%
78.6%
EBITDA margin, %
30.3%
30.0%
32.4%
EBIT margin, %
22.0%
21.5%
25.0%
Effective tax rate, %
24.5%
23.5%
24.0%
Equity ratio, %
17%
24%
23%
NIBD to EBITDA, x
2
1.3
1.2
1.1
Return on invested capital (ROIC), %
3
45%
46%
45%
Cash conversion incl. lease payments, %
-12%
-49%
78%
Net working capital, % of last 12 months’ revenue
6.9%
8.8%
1.8%
Capital expenditure, % of revenue
6.0%
4.6%
5.8%
Stock ratios
Total payout ratio (incl. share buyback), %
255%
322%
136%
Dividend per share, proposed, DKK
-
-
18
Dividend per share, paid, DKK
18
16
16
Earnings per share, basic, DKK
11.8
10.0
55.5
Earnings per share, diluted, DKK
11.8
10.0
55.1
Consolidated balance sheet
Total assets
23,993
21,519
23,798
Invested capital
16,605
15,481
15,126
Net working capital
2,017
2,332
510
Net interest-bearing debt (NIBD)
12,643
10,227
9,770
Equity
3,961
5,254
5,355
Consolidated statement of cash flows
Cash flows from operating activities
188
-142
7,384
Capital expenditure, total
409
270
1,624
Capital expenditure, property, plant and equipment
252
165
1,176
Free cash flows incl. lease payments
-187
-614
5,489
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.
3
Last 12 months’ EBIT in % of last 12 months’ average invested capital. The “Return on invested capital (ROIC), %” was updated in Q1 2024 from “Last 12 months’ EBIT in % of invested capital” to
“Last 12 months’ EBIT in % of last 12 months’ average invested capital” to present a more useful and less volatile KPI by switching to moving annual total. All comparative periods have been
restated.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
4 | 35
BUSINESS UPDATE
A strong start to the next chapter of the Phoenix strategy
Building off the successes of the Phoenix strategy over the past three years, Pandora started the next chapter of its
journey with good top-line momentum and solid profitability in Q1 2024. Organic growth was at double-digit levels,
supported by double-digit LFL growth, whilst Pandora’s earnings model further bolstered already high profitability.
The brand strategy, which aims to transform consumer perception of Pandora to a full jewellery brand, was backed
by an exciting new marketing campaign. This drove a continued and broad-based increase in traffic, leading to solid
growth across most of Pandora’s collections and geographies, in line with the strategic aim.
In Q1 2024, Pandora delivered organic growth of 18% which comprised of LFL growth of 11% and network expansion
of 5%. On top of that, there was a 2% positive impact on organic growth from other factors including a positive
contribution from an extra trading day in February due to the leap year. Regionally, European key markets continued
to deliver solid LFL growth of 9%. This was, still, largely driven by particularly strong performance in Germany with
67% LFL growth, whilst other markets remained broadly stable. In the US, momentum remained strong at 9% LFL
growth with good brand momentum combined with improved execution leading to consistent market share gains.
Rest of Pandora also had a solid start to the year with another double-digit LFL quarter at 18% despite a tough
comparison base. Growth here continued to be relatively broad-based with many countries contributing.
By channel, LFL growth was positive across all touchpoints with Pandora continuing to capitalise on higher traffic
trends, and in particularly strong traffic through the online channel, which delivered 21% LFL. Pandora-owned stores
continued to outperform partner stores in Q1 2024 with Pandora’s physical network delivering 10% LFL vs partners
at 3%.
Pandora continued to leverage its unique business model and vertically integrated supply chain to deliver a new
record-high gross margin of 79.4%, up 190bp Y/Y. The gross margin was helped by ongoing efficiencies in Pandora’s
state-of-the-art crafting and supply facilities in Thailand, positive pricing benefits, channel mix and some tailwind
from silver prices. The combined tailwind from foreign exchange and commodities seen in Q1 2024 is expected to
gradually turn through the remainder of the year to become a net headwind in H2 2024. Promotional activity for the
quarter was broadly in line with Q1 2023.
Elevating brand desirability and momentum through the new “BE LOVE” marketing campaign
In line with Pandora’s marketing strategy, communicated at the Capital Markets Day 2023, to drive relevance and
brand heat, Pandora continued the restaging of its brand in Q1 2024 with a new marketing campaign that will elevate
desirability whilst clearly showcasing Pandora’s identity as a full jewellery brand. The star-studded “BE LOVE”
campaign builds off the success of the “Loves, Unboxed” holiday campaign in Q4 2023 with two new global brand
ambassadors: sisters and artists Chloe and Halle Bailey. The multi-season campaign is rooted in love as more than just
a day in the calendar, but something that you do, inviting everyone to be love. The campaign features a range of
collections crafted with high-quality materials such as sterling silver, 14K gold (plated and solid), Murano glass, and
lab-grown diamonds, emphasising Pandora as a brand for anyone looking to add sparkle to their life regardless of
occasion. While it is still early days, the new marketing campaign has already seen an encouraging response with
powerful social media activations and broad global press coverage. Pandora will continue to leverage the campaign
across Mother’s Day and beyond.
Driving the core whilst fuelling with more – in line with the strategic intent
In line with the objective of the brand restaging, Pandora saw broad-based growth across most collections in Q1
2024. The Core segment saw 3% LFL growth with Pandora’s Moments platform at 5% LFL growth whilst Pandora ME
had a particularly strong quarter at 26% LFL. Within the Fuel with more segment, growth was still driven heavily by
Executive
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
5 | 35
Timeless at 43% LFL growth. As witnessed through 2023, growth in Timeless was relatively broad-based across most
product categories, but the Pavé Cuban chain bracelet in particular resonated strongly with consumers. There was
also a solid initial response to Pandora’s new pearl giftset, which shows the broad nature of the growth through the
quarter. In addition to the ongoing trends seen in previous quarters, Timeless continues to make waves on social
media platforms, particularly TikTok, with various products going viral. In Q1 2024, new products such as the Double
Band Heart Ring captured the attention of consumers.
Within the quarter, total revenue for Pandora’s Lab-Grown Diamond collection reached DKK 63 million with LFL
growth of 87%. The assortment expansion in Q3 2023 continued to support growth. The collection is now sold across
700 stores in the US, Canada, the UK, Australia, Mexico and Brazil. North America continued to account for the largest
proportion of revenue. Since the launch of the expanded assortment in 2023, Pandora has noted a continued and
ongoing positive halo effect on Pandora’s other collections from greater presence in the Lab-Grown Diamond
category. This has been most evident in North America, where consumer consideration to purchase any piece of
Pandora jewellery has increased since Pandora expanded its lab-grown diamonds assortment. This has been further
accentuated by a focused marketing strategy to raise awareness and desirability.
REVENUE BY SEGMENT
DKK million
Q1 2024
Q1 2023
1
Like-for-like
Share of
Revenue
Core
5,015
4,638
3%
73%
- Moments
4,231
3,859
5%
62%
- Collabs
560
610
-14%
8%
- ME
224
169
26%
3%
Fuel with more
1,819
1,212
34%
27%
- Timeless
2
1,524
949
43%
22%
- Signature
232
229
-8%
3%
- Pandora Lab-Grown Diamonds
63
34
87%
1%
Total revenue
6,834
5,850
11%
100%
1
In Q3 2023, Pandora moved the Pandora ME collection from Fuel with more to Core. Comparative figures for Q1 2023 were restated accordingly.
2
As of Q3 2023, Pandora Timeless includes revenue from the PANDORA ESSENCE collection. In Q1 2024, PANDORA ESSENCE revenue amounted to DKK 1 million.
Expansion of the store network drives profitable growth
In Q1 2024, network expansion contributed 5% to organic growth related to net 151 concept store openings and
116 Pandora-owned shop-in-shop openings during the last 12 months. During Q1 2024, Pandora opened net 19 new
concept stores and 7 Pandora owned shop-in-shops. As witnessed through 2023, store openings continue to create
immense value for Pandora with the EBIT margin reaching 35-40% in the first year with a rapid payback of investment.
With a global market share of only 1.3% and accretive margins and returns on new store openings, there is significant
value creation ahead for Pandora by continuing to expand the network. For 2024, Pandora continues to target 75-
125 net concept store openings and an additional 25-50 Pandora owned shop-in-shop openings. Pandora now
expects the organic revenue contribution in 2024 from network expansion to be around 4% (vs 3-4% previously).
EVOKE 2.0 continues to showcase new look and feel for the Pandora brand
The ongoing rollout of Pandora’s new store concept, Evoke 2.0, marks a notable milestone, with a plan to transform
1,375-1,425 or around 60% of Pandora's owned and operated stores into this innovative concept by 2026. Evoke 2.0
better utilises the available space in the store, providing an intuitive and engaging experience to showcase Pandora
as a full jewellery brand. During Q1 2024, Pandora opened 33 new Evoke 2.0 stores, including refurbishments, which
built on the 55 Evoke 2.0 openings during 2023. The new stores in Q1 2024 were mainly in the US and Italy.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
6 | 35
Investor and Analyst Days 2024 – Pandora Crating & Supply Thailand
Following the Capital Markets Day in October 2023, Pandora will be hosting a two-day investor and analyst visit on
11-12 June 2024 to Pandora’s state-of-the-art Crafting & Supply facilities in Thailand. During the visit, Pandora will
present its vertically integrated business model in detail, showcasing the company’s unique ability to craft quality
jewellery at scale. Pandora will also discuss the vast improvements that have been delivered in the facilities over the
past years, driving notable productivity benefits. The visit includes tours across the facilities in Bangkok and Lamphun.
Embarking on chapter two of the Phoenix strategy
With the full year 2023 results, Pandora successfully concluded the first chapter of its Phoenix strategy. Evidencing
the success of the strategy, Pandora delivered on its initial organic growth target set in 2021 of 5-7% CAGR between
2021-2023 with a realized organic growth CAGR of 7.5% over the period despite a weak consumer backdrop. Pandora
ended the year with a 25.0% EBIT margin, thus meeting its target of 25-27% by 2023 despite the inflationary
environment.
Pandora has now started to execute on the next chapter of its Phoenix strategy. At the Capital Markets Day in
October 2023, Pandora showed how it will work to elevate performance to the next level. The four strategic growth
pillars of the Phoenix strategy remained unchanged, while the key priority now is to transform the perception of
Pandora into a full jewellery brand. As part of the strategic update, Pandora announced new financial targets:
• Organic growth: 7-9% CAGR 2023-2026
• EBIT margin: 26-27% by 2026
The organic growth target comprises of a targeted LFL growth CAGR of 4-6% and a contribution from network
expansion of around 3% CAGR. Pandora’s strong operating model and a range of current and new initiatives will be
scaled up to drive solid and sustainable growth. When combined with an expected 1% annual revenue growth from
forward integration, the targets add up to 8-10% local currency CAGR over 2023-2026. Total revenue is thereby
expected to reach DKK 35 – 37 billion in 2026 (vs DKK 34 – 36 billion expected in October 2023, the increase
reflecting the higher 2023 base).
The new EBIT margin target of 26-27% equals 100-200bp of margin expansion compared to the 2023 results. The
EBIT margin target will be delivered while accelerating investments in current and future growth – underpinning
Pandora’s ability to leverage its current infrastructure to drive growth. Pandora notes that the Capital Markets Day
margin target was set based on a silver price of USD 23.5 per ounce as per 25 September 2023. Pandora hedges silver
on an ongoing basis, which typically results in a 9-12 months delayed impact on the EBIT margin from changes in the
spot price. Therefore, the 2024 hedged rate has been locked at USD 23.7 per ounce and the combined impact from
foreign exchange/commodities on the 2024 EBIT margin is broadly unchanged at being flat. The current spot price
of USD 26.5 per ounce, if sustained, will impact the EBIT margin from Q2 2025 onwards. All else equal, this represents
a 90bp headwind to the margin target for 2026. Whilst adding an element of uncertainty, Pandora notes that silver
price volatility is not uncommon and that various other factors can impact the EBIT margin in 2026, including top-line
growth, efficiency improvements and other mitigating factors which can be deployed depending on the price of silver.
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highlights
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update
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
7 | 35
REVENUE REVIEW
Double-digit revenue growth driven by double-digit LFL growth
In Q1 2024, Pandora delivered organic growth of 18% which comprised of LFL growth of 11% and network expansion
of 5%. Additionally, there was a 2% positive impact on organic growth from other factors including a positive
contribution from an extra trading day in February due to the leap year.
The Core segment saw solid 3% LFL growth, supported by robust performance in Moments and strong performance
in Pandora ME. The Fuel with more segment, which now accounts for 27% of the business, delivered 34% LFL growth.
Forward integration continues to support total revenue growth, contributing with 1% in Q1 2024. In the quarter,
Pandora acquired a total of 21 concept stores in the US (8 stores), Canada (7 stores), Italy (4 stores) and Brazil (2
stores). Foreign exchange rates represented a net headwind of 2%, as most currencies have depreciated vs DKK, with
in particular a material decline in the Turkish lira.
The revenue growth development can be illustrated as follows:
Q1 2024 growth composition vs Q1 2023
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
8 | 35
REVIEW OF REVENUE BY KEY MARKET
Sustained brand momentum drives strong top-line
Pandora's performance in Q1 2024 reflects a strong start to the second phase of its Phoenix strategy, marked by
increased investments into restaging the brand and continued momentum across key markets. Overall, Pandora
witnessed good trading results with organic growth reaching 18%, driven by LFL of 11%. The brand strategy,
supported by the "BE LOVE" marketing campaign, resonated well with consumers, leading to solid growth across many
markets.
US
The US market sustained its strength with 9% LFL in Q1 2024. Organic growth landed even higher at 16%, fuelled by
the momentum generated from new store openings over the past 12 months. LFL growth was driven by increased
traffic and supported by effective execution. The good brand momentum played a pivotal role in attracting this
traffic, supported by the positive halo effect of Pandora Lab-Grown Diamonds, driving increased footfall and
engagement.
While LFL growth in the wholesale channel was positive in Q1 2024, there remains a notable gap compared to
Pandora's owned and operated stores.
Key markets in Europe
The key markets in Europe delivered solid LFL growth of 9% in Q1 2024. This was mainly driven by a very strong
quarter in Germany with 67% LFL, primarily due to increased traffic as a result of ongoing strong brand momentum.
As in 2023, growth was strong across all segments, reflecting the effectiveness of the strategic initiatives to drive
growth in the core business while transforming the perception of Pandora to be recognized as a full jewellery brand.
The UK remained broadly stable with a slight decline of -1% LFL in Q1 2024, continuing to outperform the broader
jewellery market in the UK. Traffic remained robust despite a continued reduction of promotional days compared to
the previous year. Total revenue continued to grow in the UK in Q1 with organic growth at 2%.
Despite macroeconomic challenges, Italy maintained resilience in Q1 2024 with a decline of -2% LFL. Notably, the
market exhibited positive signs of consumer engagement, as traffic remained steady and the Fuel with more segment
delivered encouraging growth by attracting new customers. Organic growth in Q1 2024 was 5%.
France sustained positive LFL growth at 2%, as marketing initiatives yielded favourable responses, contributing to the
overall performance and underscoring the brand's resonance with consumers. The wholesale channel continues to be
a significant drag on performance in France with -13% LFL among partners vs 4% in Pandora’s own stores.
China
China had a challenging quarter at -17% LFL growth, not helped by an overall challenging market. Pandora continues
to focus on enhancing brand discipline and positioning key collections more effectively. China remains a strategic
priority for Pandora and with the new management settled in early 2024, Pandora is committed to navigating the
market's complexities and driving positive change through the gradual relaunch of the brand in China.
Australia and Rest of Pandora
In Q1 2024, Australia continued to grapple with persistently low consumer sentiment in the overall marketplace and
delivered -3% LFL growth. However, despite this challenging backdrop, Pandora's owned and operated stores
demonstrated resilience, recording 2% positive LFL. In contrast, partner stores continued to underperform at -10%
LFL, highlighting ongoing challenges within this segment of the market.
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
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In Q1 2024, the Rest of Pandora markets exhibited strong performance with 18% LFL growth with several markets
showing strong double-digit growth. Notably, markets such as Spain, Turkey, Greece, and Poland demonstrated
sustained growth. Outside of Europe, large markets such as Mexico and Canada continued to deliver high-single-digit
growth.
QUARTERLY REVENUE DEVELOPMENT BY KEY MARKET
DKK million
Q1 2024
Q1 2023
Like-for-like
Organic growth
Share of revenue
US
2,027
1,716
9%
16%
30%
China
110
161
-17%
-27%
2%
UK
854
809
-1%
2%
13%
Italy
565
539
-2%
5%
8%
Australia
203
220
-3%
-3%
3%
France
274
243
2%
12%
4%
Germany
472
269
67%
75%
7%
Total key markets
4,506
3,958
7%
13%
66%
Rest of Pandora
2,328
1,892
18%
29%
34%
Total revenue
6,834
5,850
11%
18%
100%
Executive
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
10 | 35
REVIEW OF NETWORK DEVELOPMENT
Continued expansion of Pandora’s global network
In Q1 2024, a net of 19 concept stores and 7 Pandora-owned shop-in-shops was opened. Most of the concept stores
openings were in the US and Latin America, while most of the shop-in-shops openings were in Japan. This strategic
move underscores Pandora's recognition of the vast potential for further growth and expansion in Asia, and Pandora
will further step up investments in this area during 2024.
In Q1 2024, network expansion drove 5% of the revenue growth. On top of that, forward integration added 1% to
revenue growth.
Network expansion is low risk, while being accretive to margins and returns. As such, Pandora continues its plans to
expand the network with 400-500 targeted net openings through 2024-2026. For 2024, Pandora continues to target
75-125 net concept store openings and an additional 25-50 Pandora owned shop-in-shop openings.
Number of points of sale
1
Q1 2024
Q4 2023
Q1 2023
Growth
Q1 2024
/Q4 2023
Growth
Q1 2024
/Q1 2023
Concept stores
2,670
2,651
2,519
19
151
- of which Pandora owned
2
1,926
1,869
1,655
57
271
- of which franchise owned
412
463
562
-51
-150
- of which third-party distribution
332
319
302
13
30
Other points of sale
3,965
4,035
3,964
-70
1
- of which Pandora owned
2
585
578
469
7
116
- of which franchise owned
3,085
3,144
3,177
-59
-92
- of which third-party distribution
295
313
318
-18
-23
Total points of sale
6,635
6,686
6,483
-51
152
1
Please refer to note 11 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
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PROFITABILITY
Solid profitability maintained while elevating marketing investments
In Q1 2024, Pandora’s EBIT margin landed at 22.0%, a 50bp improvement compared 21.5% in Q1 2023. The EBIT
margin reflects operating leverage from the broad-based growth, which more than offset the increased investment
level, most notably into marketing with the launch of the new multi-season “BE LOVE” campaign which forms part of
the strategy to restage the Pandora brand to become known as a full jewellery brand.
In line with its strategy, Pandora will continue to accelerate investments into current and future growth initiatives,
including brand initiatives. These investments were visible through Q1 2024, with marketing expenses increasing
almost 30%, but fully offset by the high growth. The temporary margin drag from inventories bought back in
connection with forward integration represented a 90bp headwind in the quarter, up 80bp from Q1 2023.
Foreign exchange represented a tailwind of 30bp and commodites an additional 10bp driven by favourable realized
hedging gains on silver contracts. The foreign exchange tailwind comes from strenghtening of the USD and GBP as
well as a weaker THB, partly offset by depreciation of the Turkish Lira. The tailwind from commodity prices and foregin
exchange rates is expected to fade out by the end of H1 2024 and turn into a net neutral impact on the full year of.
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GROSS MARGIN
In Q1 2024, Pandora once again saw a notable improvement in the gross margin reaching a record-high of 79.4%,
representing an increase of 190bp compared to Q1 2023. The improvement of the gross margin was a continuation
of the trend witnessed over the past several years, underpinning the strength of Pandora’s vertically integrated
business model.
The increase in the gross margin in Q1 2024 was primarily driven by favourable channel mix, pricing adjustments, and
operational efficiencies at the crafting facilities in Thailand. Additionally, Pandora benefited from positive impacts
from foreign exchange movements and silver prices. The combined tailwind from foreign exchange and commodities
seen in Q1 2024 is expected to gradually turn through the remainder of the year to become a net headwind in H2
2024.
The gross margin continued to be temporarily negatively impacted by the impact from buying back inventory during
the process of forward integration. This represented a net headwind of -80bp compared to Q1 2023, and the
underlying gross margin is thus just over 80%.
GROSS MARGIN AND GROSS PROFIT
DKK million
Q1 2024
Q1 2023
Growth in
constant FX
Revenue
6,834
5,850
19%
Cost of sales
-1,410
-1,315
12%
Gross profit
5,424
4,536
21%
Gross margin, %
79.4%
77.5%
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OPERATING EXPENSES
The operating expenses increased by 21% in constant exchange rates measured against Q1 2023. The increase was
driven by the launch of the refreshed brand strategy, as well as the expansion of the profitable store network and
forward integration. Since Q1 2023, 387 Pandora owned and operated stores have been added to the retail network,
driving the sales and distribution expenses up by 23% in constant exchange rates.
Marketing expenses were up by 28% in constant exchange rates vs Q1 2023, with an absolute increase in spend at
DKK 189 million. This relates to the brand strategy, which aims to transform the perception of Pandora into a full
jewellery brand. This was ignited with the launch of the multi-season “BE LOVE” marketing campaign. The share of
revenue was 13.2%, 1pp higher than Q1 2023.
Administrative expenses increased by 6% in constant exchange rates vs Q1 2023. This is achieved while continuing to
invest in Digital & Technology, including the new ERP platform, and scaling up investments to accelerate future growth.
QUARTERLY OPERATING EXPENSES
DKK million
Q1 2024
Q1 2023
Growth in
constant FX
Share of
revenue
Q1 2024
Share of
revenue
Q1 2023
Sales and distribution expenses
-2,421
-2,003
23%
35.4%
34.2%
Marketing expenses
-904
-715
28%
13.2%
12.2%
Administrative expenses
-592
-562
6%
8.7%
9.6%
Total operating expenses
-3,917
-3,280
21%
57.3%
56.1%
FINANCIAL EXPENSES AND TAX
Net financials came in at a cost of DKK 229 million in Q1 2024, compared to DKK 94 million in Q1 2023. The increase
is mainly driven by higher interest rates compared to the same period last year, affecting loans, as well as the IFRS 16
related interest on lease payments. Additionally, the net realised profit on foreign exchange hedging contracts
represented a net loss of DKK 44 million in Q1 2024, in large driven by the recent weakening of the THB towards DKK.
Despite this, Pandora re-iterates its guidance for total net financial expenses in 2024 of around DKK 950-1,000
million.
The effective tax rate in Q1 2024 came in at 24.5%, in line with the guidance and up by 100bp compared to Q1 2023.
The increase is driven by the Pillar Two tax rules taking effect from 2024 and was as expected and communicated.
Pandora generated an EPS of DKK 11.8 for the quarter, an 18% increase from DKK 10.0 in Q1 2023.
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CASH FLOW & BALANCE SHEET
Strong net working capital and cash conversion
Net working capital was down to 6.9% of revenue in Q1 2024 vs 8.8% in Q1 2023. The reduction of 190bp was helped
by a reduction in inventory as a percentage of the last 12 months revenue (110bp) and an increase of the trade
payable balance (100bp). As per normal seasonality, the cash conversion was negative in the first quarter, but
significantly improved over last year with Pandora delivering a cash conversion of -12% in Q1 2024, compared to -
49% in Q1 2023. This was achieved through net working capital being lower, both in absolute terms and as a
percentage of revenue, despite growth in the quarter.
CAPEX came in at DKK 0.4 billion, equivalent to 6% of revenue and in line with the 6-7% guidance for the full year.
CAPEX as a percent of revenue was 1pp higher than Q1 2023, driven by investments to fuel growth, especially the
expansion of the store network and digital investments.
ROIC was 45% for the quarter, in line with 46% for Q1 2023. The structurally high ROIC continues to be supported
by the investments into expanding Pandora’s store network, as new Pandora stores are ROIC accretive on a run-rate
basis. From 2024 onwards, the ROIC is calculated as a moving annual total, using the average invested capital over 12
months rather than the ending balance. This is done to present a more useful and less volatile KPI. Comparative figures
have been restated and historical figures can be found in the Excel appendix to the Q1 2024 company announcement.
Trade receivables continue to be at a healthy level. The wholesale days sales outstanding (DSO) ends at 35 days vs 33
days in Q1 2023, with the increase reflecting geographical mix in the wholesale channel. Retail DSO were at 10 days,
adversely impacted by phasing of retail receivables in Mexico which were received just after the end of the quarter.
Adjusting for this phasing, retail DSO was 7 days, in line with the trend for 2023. This also had an impact on the total
DSO increasing to 15 days, which would be 12 days when adjusted, and in line with the Q1 2023 DSO of 13 days.
NET WORKING CAPITAL
Share of preceding 12 months' revenue
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Inventories
15.2%
14.8%
17.8%
16.6%
16.3%
Trade receivables
3.8%
4.8%
3.4%
2.9%
3.2%
Trade payables
-9.2%
-11.4%
-8.7%
-8.5%
-8.2%
Other net working capital elements
-2.9%
-6.4%
-3.3%
-2.6%
-2.4%
Total
6.9%
1.8%
9.2%
8.4%
8.8%
Balance Sheet
Non-current assets increased by DKK 1.9 billion to DKK 16.4 billion at the end of Q1 2024, driven by the network
expansion increasing the right-of-use assets as well as tangible assets and a higher CAPEX spend related to store
refurbishments.
At the end of Q1 2024, net interest-bearing debt amounted to DKK 12.6 billion, up from DKK 10.2 billion in Q1 2023.
This corresponds to a leverage of 1.3x, in line with usual seasonality as well as Q1 2023 at 1.2x.
By the end of Q1 2024, equity in Pandora amounted to DKK 4.0 billion, down from DKK 5.4 billion by year end 2023
reflecting usual seasonality driven by distributions to shareholders in the form of dividends and share buybacks.
Pandora paid out DKK 1.5 billion in dividends and bought back shares for an amount of DKK 1.0 billion in Q1 2024.
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FINANCIAL GUIDANCE
Upgraded revenue outlook following good strategic momentum
Despite lingering macroeconomic uncertainties, Pandora's strategic initiatives, anchored by the Phoenix strategy, have
yielded promising results. Reflecting the strategic momentum, Pandora lifts its organic growth guidance range.
Pandora is now targeting organic growth of 8-10% (previously 6-9%) and an EBIT margin of around 25%. The new
organic growth range reflects the good strategic momentum on various growth initiatives partly offset by the tougher
base of comparison in H2 2024 and the broader macroeconomic environment. The low-end of the new organic
growth guidance range would require a weakening of the macroeconomic environment relative to today.
REVENUE GUIDANCE
The organic growth guidance can be illustrated as follows:
Pandora is currently expecting LFL growth of 4-6% (previously 3-5%). The low-end of the LFL range would require a
weakening of the macroeconomic environment relative to today. Continued network expansion is expected to add
around 4% (previously 3-4%) to take the total organic growth to 8-10% (previously 6-9%). Finally, forward integration
is expected to add around 1% revenue with revenue growth in local currency ending at 9-11% (previously 7-10%).
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PROFITABILITY GUIDANCE
The EBIT margin guidance can be illustrated as follows:
The EBIT margin guidance for 2024 is unchanged at “Around 25%”. The building blocks include a positive impact from
the profitable expansion of Pandora’s store network, expected to add 50bp (previously 40bp).
The “Operating leverage, net of investments" remain roughly unchanged compared to the original guidance for 2024.
The operating leverage associated with the higher revenue expectations will be re-invested into among others Asian
markets, general marketing activities and slightly accelerated forward integration. Pandora has a low penetration
across many Asian markets, and during 2024 Pandora will take the first steps to establish a stronger position in among
others Japan and South Korea. Partly due to this and partly due to phasing of costs in general, the EBIT margin in Q2
and Q3 2024 is expected to be slightly below last year.
As outlined during the Capital Markets Day in 2023, Pandora is committed to scaling up investments to seize current
and future growth opportunities. These investments encompass various initiatives such as the restaging of the brand,
the rollout of the Evoke 2.0 store concept, personalized experiences (both online and offline), as well as efforts to
establish Pandora as the go-to destination for Lab-Grown Diamonds. Consequently, while positive LFL growth yields
operational leverage, the impact of ongoing investments under the Phoenix strategy is expected to offset the
leverage in 2024. It's worth noting that Pandora retains flexibility in adjusting these investments based on growth
outcomes.
Furthermore, inflationary pressures, including salary increases, are anticipated to be largely mitigated through price
adjustments and operational efficiencies. The combined impact of silver prices and foreign exchange fluctuations is
projected to be net neutral, broadly in line with the original guidance for 2024 (previously -10bp).
2024 GUIDANCE – OTHER PARAMETERS (UNCHANGED)
Pandora expects to open net 75-125 concept stores and 25-50 owned and operated other points of sales in 2024.
CAPEX is expected to end at 6-7% share of revenue, as Pandora continues to scale up investments into the store
network with the roll-out of Evoke 2.0 and network expansion, digital initiatives and crafting facilities.
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The effective tax rate is expected to be 24-25% as the Pillar Two tax rules, released by OECD, comes into effect in
2024.
At current interest rate levels, foreign exchange rates (and thereby gain/loss on foreign exchange contract) and
targeted leverage levels, Pandora expects total net financial expenses to be around DKK 950-1,000 million in 2024.
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.
FOREIGN EXCHANGE AND COMMODITY ASSUMPTIONS AND IMPLICATIONS – As of 30 April 2024
Average 2023
Average 2024
2024 Y-Y
Financial Impact
USD/DKK
6.89
6.94
THB/DKK
0.20
0.19
GBP/DKK
8.57
8.72
CNY/DKK
0.97
0.96
AUD/DKK
4.58
4.54
Silver/USD (per ounce)
22.7
23.7
REVENUE (DKK million)
Approx. -120
EBIT (DKK million)
Approx. -25
EBIT margin (foreign exchange)
Approx. +0.4%
EBIT margin (commodities)
Approx. -0.4%
CAPITAL STRUCTURE POLICY AND CASH DISTRIBUTION
At the end of Q1 2024, in line with expectations and usual seasonality, Pandora’s leverage was 1.3x NIBD to EBITDA,
broadly in line with Q1 2023 at 1.2x.
Pandora aims for a leverage ratio of approximately 1.2x NIBD to EBITDA by the end of 2024. In line with the usual
seasonality of the business, leverage will increase through the year, peaking in Q3 2024, and then fall back by year
end.
In Q1 2024, Pandora has paid out DKK 1.5 billion as an ordinary dividend of DKK 18 per share and DKK 1.0 billion
through share buybacks (DKK 0.4 billion related to the 2023 programme ending on 2 February 2024). In total, Pandora
plans a total cash distribution of DKK 5.5 billion to its shareholders in the period from 8 February 2024 to 31 January
2025, both days inclusive.
At Pandora’s Annual General Meeting on 14 March 2024, the proposed resolution to reduce the share capital with a
nominal amount of DKK 7,000,000 treasury shares of DKK 1 was adopted. The share capital reduction was announced
to the Danish Business Authority on 14 March 2024 and the four week notification period has expired with no
objections. The Board of Directors has therefore resolved to effect the share capital reduction on 12 April 2024.
Following this, the Company’s share capital is nominally DKK 82,000,000, divided into shares of DKK 1.
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
18 | 35
SUSTAINABILITY
Sustainability is a cornerstone of our growth strategy, Phoenix.
We are pursuing ambitious targets to lower our impact on the planet and create positive outcomes for people and
communities touched by our business.
In Q1 2024, we continued to execute against our three strategic sustainability priorities: low-carbon business, circular
innovation, and inclusive, diverse and fair culture.
• Low-carbon: In 2023, we decreased our total greenhouse gas emissions across Scopes 1, 2 and 3 by 27%
compared to our 2019 baseline - solid progress towards our target of halving emissions by 2030. Reaching
our climate target will not be a linear journey. We expect emissions to increase somewhat in 2024
compared to 2023, since the impact of construction of our new facility in Vietnam, expansion and
refurbishment of our store network will likely exceed emissions reductions efforts in the short term.
• Circularity: As of December 2023, we completed the shift of our sourcing to 100% recycled silver and
gold for all our jewellery, well ahead of our 2025 target. Pandora is the first global brand to accomplish
this circularity transition of its main raw materials. The carbon footprint of recycled silver is one-third
compared to mined silver, while the recycling of gold emits less than 1% of the carbon emissions from
mining new gold.
• Inclusive, diverse and fair culture: In 2023, we reached 34% women in senior leadership positions, up from
29% in 2022. This means we achieved our interim 2025 target of 33% women in leadership ahead of
schedule. We will continue our work with succession plans and promotion processes to reach full gender
parity no later than 2030.
More information on Pandora’s 2023 sustainability performance, strategy and targets can be found in our
Sustainability Report 2023 published on 7 February 2024.
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
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OTHER EVENTS
At Pandora’s Annual General Meeting on 14 March 2024, the proposed resolution to reduce the share capital with a
nominal amount of DKK 7,000,000 treasury shares of DKK 1 was adopted. The share capital reduction was announced
to the Danish Business Authority on 14 March 2024 and the four-week notification period has expired with no
objections. The Board of Directors has therefore resolved to effect the share capital reduction on 12 April 2024.
Following this, the Company’s share capital is nominally DKK 82,000,000, divided into shares of DKK 1.
FINANCIAL CALENDAR 2024
The expected dates for publication of financial announcements in 2024 for Pandora A/S are as follows:
13 August 2024 Interim Financial Report for the second quarter 2024
06 November 2024 Interim Financial Report for the third quarter 2024
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CONTACT
CONFERENCE CALL
A conference call for investors and financial analysts will be held today at 10.00 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: +46 812 410 952
NO: +47 21 95 63 42
UK: +44 203 769 6819
US: +1 646 787 0157
PIN: 837462
Link to webcast: https://pandora-events.eventcdn.net/events/interim-financial-report-for-the-first-quarter-of-
ABOUT PANDORA
Pandora is the world’s largest jewellery brand. The company designs, manufactures and markets hand-finished
jewellery made from high-quality materials at accessible price points. Pandora jewellery is sold in more than 100
countries through 6,700 points of sale, including more than 2,600 concept stores.
Headquartered in Copenhagen, Denmark, Pandora employs 33,000 people worldwide and crafts its jewellery at three
facilities in Thailand. Pandora is committed to leadership in sustainability and is sourcing recycled silver and gold for
all of its jewellery, just as the company has set out to halve greenhouse gas emissions across its value chain by 2030.
Pandora is listed on the Nasdaq Copenhagen stock exchange and generated revenue of DKK 28.1 billion (EUR 3.8
billion) in 2023.
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
Adam Fuglsang
Director, Investor Relations
+45 6167 7425
adfug@pandora.net
Johan Melchior
VP, Media Relations & Public Affairs
+45 4060 1415
jome@pandora.net
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02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
21 | 35
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
DKK million
Notes
Q1 2024
Q1 2023
FY 2023
Revenue
3
6,834
5,850
28,136
Cost of sales
-1,410
-1,315
-6,012
Gross profit
5,424
4,536
22,125
Sales, distribution and marketing expenses
-3,325
-2,718
-12,707
Administrative expenses
-592
-562
-2,379
Operating profit
1,507
1,256
7,039
Finance income
47
92
251
Finance costs
-276
-186
-1,056
Profit before tax
1,278
1,162
6,234
Income tax expense
-313
-273
-1,494
Net profit for the period
965
889
4,740
Earnings per share, basic, DKK
11.8
10.0
55.5
Earnings per share, diluted, DKK
11.8
10.0
55.1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
DKK million
Q1 2024
Q1 2023
FY 2023
Net profit for the period
965
889
4,740
Other comprehensive income:
Items that have been or may be reclassified to profit/loss for
the period
Exchange rate adjustments of investments in subsidiaries
80
-41
-149
Fair value adjustment of hedging instruments
-25
32
-197
Tax on other comprehensive income
5
5
39
Items that have been or may be reclassified to profit/loss for
the period, net of tax
59
-4
-308
Items not to be reclassified to profit/loss for the period
Actuarial gain/loss on defined benefit plans, net of tax
-
-
-9
Items not to be reclassified to profit/loss for the period, net of
tax
-
-
-9
Other comprehensive income, net of tax
59
-4
-317
Total comprehensive income for the period
1,024
885
4,423
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CONSOLIDATED BALANCE SHEET
DKK million
Notes
2024
31 March
2023
31 March
2023
31 December
ASSETS
Goodwill
7
5,017
4,798
4,914
Brand
1,057
1,057
1,057
Distribution
1,038
1,041
1,039
Other intangible assets
872
679
790
Total intangible assets
7,984
7,575
7,801
Property, plant and equipment
2,818
2,247
2,746
Right-of-use assets
8
3,966
3,109
3,779
Deferred tax assets
1,347
1,273
1,260
Other financial assets
249
240
215
Total non-current assets
16,365
14,444
15,800
Inventories
4,425
4,327
4,166
Trade receivables
5
1,104
840
1,342
Right-of-return assets
48
39
55
Derivative financial instruments
4,12
127
253
87
Income tax receivable
104
156
103
Other receivables
886
920
849
Cash
934
541
1,397
Total current assets
7,628
7,075
7,998
Total assets
23,993
21,519
23,798
EQUITY AND LIABILITIES
Share capital
89
96
89
Treasury shares
-5,184
-4,489
-4,353
Reserves
678
914
610
Proposed dividend
-
-
1,480
Retained earnings
8,379
8,734
7,530
Total equity
3,961
5,254
5,355
Provisions
435
329
408
Loans and borrowings
4,8
8,056
9,360
9,737
Deferred tax liabilities
222
234
164
Other payables
139
-
80
Total non-current liabilities
8,852
9,923
10,389
Provisions
24
20
23
Refund liabilities
552
454
721
Contract liabilities
168
129
185
Loans and borrowings
4,8
5,521
1,408
1,430
Derivative financial instruments
4,12
190
54
128
Trade payables
9
2,675
2,192
3,211
Income tax payable
534
864
583
Other payables
1,517
1,221
1,773
Total current liabilities
11,180
6,342
8,053
Total liabilities
20,032
16,265
18,443
Total equity and liabilities
23,993
21,519
23,798
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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
2024
Equity at 1 January
89
-4,353
642
-33
1,480
7,530
5,355
Net profit for the period
-
-
-
-
-
965
965
Other comprehensive income, net of tax
-
-
88
-20
-
-9
59
Total comprehensive income for the period
-
-
88
-20
-
956
1,024
Share-based payments
-
197
-
-
-
-116
81
Purchase of treasury shares
-
-1,028
-
-
-
-
-1,028
Dividend proposed
-
-
-
-
-9
9
-
Dividend paid
-
-
-
-
-1,471
-
-1,471
Equity at 31 March
89
-5,184
731
-53
0
8,379
3,961
2023
Equity at 1 January
96
-3,320
797
121
1,430
8,044
7,167
Net profit for the period
-
-
-
-
-
889
889
Other comprehensive income, net of tax
-
-
-29
25
-
-
-4
Total comprehensive income for the period
-
-
-29
25
-
889
885
Share-based payments
-
276
-
-
-
-217
60
Purchase of treasury shares
-
-1,446
-
-
-
-
-1,446
Dividend proposed
-
-
-
-
-18
18
-
Dividend paid
-
-
-
-
-1,412
-
-1,412
Equity at 31 March
96
-4,489
768
146
-
8,734
5,254
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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
Q1 2024
Q1 2023
FY 2023
Operating profit
1,507
1,256
7,039
Depreciation and amortisation
561
497
2,079
Share-based payments
59
24
105
Change in inventories
-160
-82
210
Change in receivables
193
549
56
Change in payables and other liabilities
-1,410
-1,894
446
Other non-cash adjustments
-14
14
-55
Finance income received
4
5
19
Finance costs paid
-191
-116
-683
Income tax paid
-361
-396
-1,832
Cash flows from operating activities, net
188
-142
7,384
Acquisitions of subsidiaries and activities, net of cash acquired
6
-115
-45
-349
Purchase of intangible assets
-39
-114
-359
Purchase of property, plant and equipment
-256
-226
-1,129
Change in other assets
2
8
37
Proceeds from sale of property, plant and equipment
3
-
-
Cash flows from investing activities, net
-406
-377
-1,800
Dividend paid
-1,471
-1,412
-1,412
Dividend paid – withholding tax
361
337
-
Purchase of treasury shares
-988
-1,449
-5,022
Proceeds from loans and borrowings
3,829
6,154
5,927
Repayment of loans and borrowings
-1,875
-3,160
-3,321
Repayment of lease liabilities
-271
-251
-1,107
Cash flows from financing activities, net
-414
219
-4,935
Net cash flow
-632
-301
649
Cash and cash equivalents, beginning of period
1,183
595
595
Exchange gains/losses on cash and cash equivalents
-4
-7
-61
Net cash flow
-632
-301
649
Cash and cash equivalents, end of period
548
288
1,183
Cash balances
934
541
1,397
Overdrafts
-386
-253
-214
Cash and cash equivalents, end of period
548
288
1,183
Cash flows from operating activities, net
188
-142
7,384
- Finance income received
-4
-5
-19
- Finance costs paid
191
116
683
Cash flows from investing activities, net
-406
-377
-1,800
- Acquisition of subsidiaries and activities, net of cash acquired
115
45
349
Repayment of lease liabilities
-271
-251
-1,107
Free cash flows incl. lease payments
-187
-614
5,489
Unutilised committed credit facilities
4
6,339
4,239
4,472
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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 (EU) 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 2023.
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. Besides the ”Return on invested capital (ROIC), %” which is
defined as last 12 months’ EBIT to last 12 months’ invested capital including goodwill, see note 5.6 Financial
definitions to the consolidated financial statements in the Annual Report 2023 for definitions of the performance
measures used by Pandora.
International tax reform – Pillar Two model rules
Pandora is subject to minimum tax primarily in respect of jurisdictions with corporate income tax rates lower than
15% or in which we receive tax incentives. Where qualifying domestic minimum taxes are implemented in applicable
jurisdictions, Pandora will pay the minimum tax in those jurisdictions. Where no qualifying domestic minimum tax has
been implemented, tax will be paid in Denmark. The majority of the minimum tax due is expected to relate to Thailand
where Pandora receives tax incentives as part of the investment agreement with the Board of Investment (BOI). The
impact of minimum tax is taken into account in tax expense for Q1 2024.
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 2024. The implementation of these new or amended
standards and interpretations had no material impact on the consolidated 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 – Management judgements and estimates under IFRS
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 2023
to which we refer.
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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 our Core collections (formerly referred to as Moments incl. Collabs), while the other, Fuel
with more (formerly referred to as Style), covers newer collections and innovations.
In Q3 2023, Pandora updated its collection structure by moving the Pandora ME collection from the Fuel with more
segment into the Core segment. The strategic reasoning centres around design aesthetics and categorisation of
jewellery to better align consumer synergies among collections, leading to a centralised platform for charms and
carriers. All the comparative figures have been restated to reflect the updated structure.
Core includes the charms and charm carriers which focus on the collectability. The Fuel with more segment includes
the Modern Classics (Pandora Timeless and Pandora Signature accompanied by Pandora’s newest collection,
PANDORA ESSENCE) and Pandora Lab-Grown Diamonds and targets both existing and new customers who may have
a different aesthetic preference than the Core jewellery design.
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.
SEGMENT INFORMATION
DKK million
Core
Fuel with more
Group
Q1 2024
Revenue
5,015
1,819
6,834
Cost of sales
-1,108
-302
-1,410
Gross profit
3,907
1,517
5,424
Operating expenses
-3,917
Consolidated operating profit (EBIT)
1,507
Profit margin (EBIT margin), %
22.0%
Q1 2023
1
Revenue
4,638
1,212
5,850
Cost of sales
-1,085
-230
-1,315
Gross profit
3,554
982
4,536
Operating expenses
-3,280
Consolidated operating profit (EBIT)
1,256
Profit margin (EBIT margin), %
21.5%
1
In Q3 2023, Pandora moved the Pandora ME collection from Fuel with more to Core. Comparative figures for Q1 2023 were restated accordingly.
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REVENUE BY SEGMENTS
DKK million
Q1 2024
Q1 2023
1
Like-for-like
Local currency
growth
Share of
Revenue
Core
5,015
4,638
3%
10%
73%
- Moments
4,231
3,859
5%
12%
62%
- Collabs
560
610
-14%
-8%
8%
- ME
224
169
26%
35%
3%
Fuel with more
1,819
1,212
34%
52%
27%
- Timeless
2
1,524
949
43%
63%
22%
- Signature
232
229
-8%
3%
3%
- Pandora Lab-Grown Diamonds
63
34
87%
82%
1%
Total revenue
6,834
5,850
11%
19%
100%
Goods transferred at a point in time
6,820
5,836
Services transferred over time
14
15
Total revenue
6,834
5,850
1
In Q3 2023, Pandora moved the Pandora ME collection from Fuel with more to Core. Comparative figures for Q1 2023 were restated accordingly.
2
As of Q3 2023, Pandora Timeless includes revenue from the PANDORA ESSENCE collection. In Q1 2024, PANDORA ESSENCE revenue amounted to DKK 1 million.
REVENUE DEVELOPMENT IN KEY MARKETS
DKK million
Q1 2024
Q1 2023
Like-for-like
Local currency
growth
US
2,027
1,716
9%
19%
China
110
161
-17%
-27%
UK
854
809
-1%
2%
Italy
565
539
-2%
5%
Australia
203
220
-3%
-3%
France
274
243
2%
12%
Germany
472
269
67%
75%
Total key markets
4,506
3,958
7%
14%
Rest of Pandora
2,328
1,892
18%
29%
Total revenue
6,834
5,850
11%
19%
REVENUE DEVELOPMENT BY CHANNEL
DKK million
Q1 2024
Q1 2023
Organic
growth
Share of
Revenue
Pandora owned
1
retail
5,495
4,391
24%
80%
- of which concept stores
3,662
2,901
24%
54%
- of which online stores
1,397
1,144
24%
20%
- of which other points of sale
437
346
27%
6%
Wholesale
1,127
1,283
-4%
16%
- of which concept stores
468
653
-16%
7%
- of which other points of sale
659
630
8%
10%
Third-party distribution
211
176
18%
3%
Total revenue
6,834
5,850
18%
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.
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 4 – 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 2023.
Net interest-bearing debt (NIBD), incl. capitalised leases amounted to DKK 12.6 billion at the end of Q1 2024 (Q4
2023: DKK 9.8 billion) corresponding to a financial leverage of 1.3x (Q4 2023: 1.1x).
Liquidity risk
Pandora maintains an adequate level of cash and unutilised credit facilities to meet financial obligations when due.
In Q1 2024, Pandora entered into a short term loan facility of DKK 2.0 billion maturing in 2025. Further, DKK 1.8 billion
was drawn on short term money market lines to optimise interest costs. This resulted in a shift between current and
non-current loans and borrowings. At the end of Q1 Pandora had DKK 6.3 billion in undrawn committed credit
facilities.
NOTE 5 – Trade receivables
NOTE 6 – Business combinations
In Q1 2024, Pandora took over 21 concept stores (8 in the US, 4 in Italy, 7 in Canada and 2 in Brazil). Net assets
acquired mainly consisted of store properties, inventories and related liabilities. The total purchase price for the
acquisitions was DKK 126 million. Based on the purchase price allocations, goodwill was DKK 67 million. Goodwill from
the acquisitions was mainly related to the synergies from converting the stores from wholesale and distribution to
Pandora-owned retail. Of the goodwill acquired, DKK 65 million 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 and the impact from converting the stores
from wholesale to Pandora-owned retail, the contribution to Group revenue and net profit from acquisitions for the
period 1 January – 31 March 2024 was DKK 26 million and DKK 9 million, respectively. On a pro forma basis, if the
DKK million
2024
31 March
2023
31 December
Loans and borrowings, non-current
5,158
6,973
Lease liabilities, non-current
2,898
2,765
Loans and borrowings, current
4,310
313
Lease liabilities, current
1,211
1,116
Cash
-934
-1,397
Net interest-bearing debt
12,643
9,770
Unutilised committed credit facilities
6,339
4,472
DKK million
2024
31 March
2023
31 December
Receivables related to third-party distribution and wholesale
515
705
Receivables related to retail revenue
589
637
Total trade receivables
1,104
1,342
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acquisitions had been effective from 1 January 2024, the impact on Group revenue and net profit for the period 1
January – 31 March 2024 would have been approximately DKK 29 million and DKK 10 million, respectively.
ACQUISITIONS
DKK million
Q1 2024
FY 2023
Property, plant and equipment and right-of-use assets
47
144
Other non-current assets
1
-
Inventories
57
194
Other current assets
-
3
Assets acquired
105
341
Non-current liabilities
19
75
Payables
2
4
Other current liabilities
25
49
Liabilities assumed
47
128
Total identifiable net assets acquired
58
213
Goodwill arising on the acquisitions
67
143
Purchase consideration
126
356
Cash movements on acquisitions:
Consideration transferred regarding previous years
1
-
14
Deferred payment
2
-11
-21
Net cash flows on acquisitions
115
349
1
The consideration transferred during 2023 related to the acquisition in Portugal and Italy in 2022.
2
The deferred payment of DKK 21 million relates mainly to the acquisition in Colombia in 2023. The deferred payment of DKK 11 million relates mainly to the
acquisitions in US and Italy in 2024.
Business combinations after the reporting period
No business combinations to an extent of significance to Pandora took place after the reporting period.
NOTE 7 – Goodwill
DKK million
2024
31 March
2023
31 December
Cost at 1 January
4,914
4,822
Acquisition of subsidiaries and activities in the period
67
143
Exchange rate adjustments
35
-50
Cost at the end of the period
5,017
4,914
No impairment indication was identified based on the information regarding the market and the forecast. The latest
impairment test was carried out 31 December 2023 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 2023.
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NOTE 8 – Assets and liabilities related to leases
Pandora leases stores, various offices, office equipment and cars.
Amounts recognised in the balance sheet:
RIGHT-OF-USE ASSETS
DKK million
2024
31 March
2023
31 December
Property
3,950
3,765
Other
16
14
Total right-of-use assets
3,966
3,779
Out of the total increase of DKK 0.2 billion in right-of-use-assets in the period 1 January to 31 March 2024, DKK 0.5
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.
LEASE LIABILITIES
DKK million
2024
31 March
2023
31 December
Non-current
2,898
2,765
Current
1,211
1,116
Total lease liabilities
4,109
3,880
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 2024
1 January –
31 March 2023
Property
309
279
Other
4
3
Total depreciation on right-of-use assets for the period
313
283
Depreciation mainly relates to leased stores and is presented in the sales, distribution and marketing expenses.
OTHER ITEMS RELATING TO LEASES
DKK million
1 January –
31 March 2024
1 January –
31 March 2023
Interest expense
82
56
Total interest for the period
82
56
Costs recognised in the period for short-term and low-value leases were DKK 21 million (Q1 2023: DKK 15 million).
Expenses are recognised on a straight-line basis.
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TOTAL CASH FLOWS RELATING TO LEASES
DKK million
1 January –
31 March 2024
1 January –
31 March 2023
Fixed lease payments
271
251
Interest payments
82
56
Variable leases
138
106
Short-term and low-value leases
21
15
Total cash flows relating to leases
512
428
Payments related to variable leases and short-term and low-value leases are not included in the lease liabilities.
NOTE 9 – 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 121 million at
31 March 2024 (31 December 2023: DKK 82 million).
NOTE 10 – Contingent assets and liabilities
Reference is made to note 5.1 Contingent assets and liabilities to the consolidated financial statements in the Annual
Report 2023.
NOTE 11 – Store network, concept store development
1
Total concept stores
O&O concept stores
Number
of concept
stores
Q1 2024
Number
of concept
stores
Q4 2023
Number
of concept
stores
Q1 2023
Growth
Q1 2024
/ Q4 2023
Growth
Q1 2024
/Q1 2023
Number
of concept
stores
O&O
Q1 2024
Growth
O&O
stores
Q1 2024
/ Q4 2023
Growth
O&O
stores
Q1 2024
/Q1 2023
US
457
447
417
10
40
366
21
89
China
212
219
237
-7
-25
202
-6
-22
UK
219
221
211
-2
8
215
0
19
Italy
175
175
155
0
20
148
8
30
Australia
124
127
120
-3
4
55
4
13
France
123
126
120
-3
3
102
4
22
Germany
135
135
132
0
3
133
0
4
Total key markets
1,445
1,450
1,392
-5
53
1,221
31
155
Rest of Pandora
1,225
1,201
1,127
24
98
705
26
116
All markets
2,670
2,651
2,519
19
151
1,926
57
271
1
All markets with 10 or more concept stores can be found in the Excel appendix uploaded on www.pandoragroup.com.
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NOTE 12 – Commodity hedging and derivatives
It is Pandora’s policy to hedge at least 70% of the Group’s expected silver and gold consumption based on a rolling
12-month production plan. The table below illustrates the timing of the hedges related to the purchase of silver and
gold 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 SILVER AND GOLD FOR PRODUCTION)
USD / OZ
Realised in
Q1 2024
Hedged
Q2 2024
Hedged
Q3 2024
Hedged
Q4 2024
Hedged
Q1 2025
Silver price
23.83
24.71
25.05
24.85
24.30
Gold price
2,030
2,019
2,078
2,155
2,182
Commodity hedge ratio (target), %
Realised
70-100%
70-90%
50-70%
30-50%
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
2023.
NOTE 13 – Subsequent events
As described in section Other events in the Management review and in Note 6 Business Combinations, Pandora is not
aware of events after 31 March 2024, which are expected to materially impact the Group’s financial position.
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QUARTERLY OVERVIEW
DKK million
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Financial highlights
Revenue
6,834
10,820
5,572
5,894
5,850
Organic growth, %
18%
12%
11%
5%
1%
Like-for-like, %
1
11%
9%
9%
2%
0%
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
2,067
4,227
1,447
1,690
1,753
Operating profit (EBIT)
1,507
3,674
920
1,188
1,256
EBIT margin, %
22.0%
34.0%
16.5%
20.2%
21.5%
Net financials
-229
-330
-211
-171
-94
Net profit for the period
965
2,530
543
778
889
Financial ratios
Revenue growth, DKK, %
17%
10%
6%
4%
3%
Revenue growth, local currency, %
19%
13%
11%
7%
2%
Gross margin, %
79.4%
79.3%
79.0%
78.1%
77.5%
EBITDA margin, %
30.3%
39.1%
26.0%
28.7%
30.0%
EBIT margin, %
22.0%
34.0%
16.5%
20.2%
21.5%
Effective tax rate, %
24.5%
24.4%
23.5%
23.5%
23.5%
Equity ratio, %
17%
23%
15%
19%
24%
NIBD to EBITDA, x
2
1.3
1.1
1.5
1.3
1.2
Return on invested capital (ROIC), %
3
45%
45%
43%
44%
46%
Cash conversion incl. lease payments, %
-12%
116%
65%
104%
-49%
Net working capital, % of last 12 months’ revenue
6.9%
1.8%
9.2%
8.4%
8.8%
Capital expenditure, % of revenue
6.0%
5.4%
6.7%
6.8%
4.6%
Stock ratios
Total payout ratio (incl. share buyback), %
255%
30%
249%
186%
322%
Consolidated balance sheet
Total assets
23,993
23,798
23,126
22,112
21,519
Invested capital
16,605
15,126
16,228
15,609
15,481
Net working capital
2,017
510
2,498
2,265
2,332
Net interest-bearing debt (NIBD)
12,643
9,770
12,707
11,363
10,227
Equity
3,961
5,355
3,521
4,245
5,254
Consolidated statement of cash flows
Cash flows from operating activities
188
4,821
1,078
1,627
-142
Capital expenditure, total
409
582
374
398
270
Capital expenditure, property, plant and equipment
252
394
305
312
165
Free cash flows incl. lease payments
-187
4,277
597
1,230
-614
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.
3
Last 12 months’ EBIT in % of last 12 months’ average invested capital. The “Return on invested capital (ROIC), %“ was updated in Q1 2024 from “Last 12 months’
EBIT in % of invested capital“ to “Last 12 months’ EBIT in % of last 12 months’ average invested capital“ to present a more useful and less volatile KPI by switching to
moving annual total. All comparative periods have been restated.
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | page
34 | 35
MANAGEMENT STATEMENT
The Board of Directors and the Executive Management have reviewed and approved the interim financial report of
Pandora A/S for the period 1 January to 31 March 2024. The condensed consolidated interim financial statement,
which has not been audited or reviewed by the Company’s auditor, has been prepared in accordance with IAS 34
‘Interim Financial Reporting’, as adopted by the EU, and additional requirements in the Danish Financial Statements
Act.
It is our opinion that the condensed consolidated interim financial statement gives a true and fair view of the financial
position for the Pandora Group at 31 March 2024 and of the results of the Pandora Group’s operations and cash
flows for the period 1 January to 31 March 2024.
Further, in our opinion, the Management’s review gives a fair view of the development in the Group’s activities and
financial matters, results of operations, cash flows and financial position as well as a description of material risks and
uncertainties that the Group faces.
Copenhagen, 2 May 2024
EXECUTIVE MANAGEMENT
Alexander Lacik Anders Boyer
Chief Executive Officer Chief Financial Officer
BOARD
Peter A. Ruzicka
Chair
Christian Frigast
Deputy Chair
Lilian Fossum Biner
Birgitta Strymne Göransson
Marianne Kirkegaard
Catherine Spindler
Jan Zijderveld
Executive
summary
Financial
highlights
Business
update
Revenue
review
Profitability
Cash Flow &
Balance sheet
Financial
guidance
Sustainability
Other events
& Contact
Financial
statements
02 MAY 2024 | INTERIM FINANCIAL REPORT Q1 2024 | COMPANY ANNOUNCEMENT No. 864 | 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.
Havneholmen 17-19 | DK-1561 Copenhagen V | Denmark | www.pandoragroup.com | Company reg. no.: 2850 5116
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