On track to meet full year guidance

Pandora A/S

Strong points

  • Organic growth of 3% and sales growth of 1% compared to Q3 2021 (organic growth of 13% compared to Q3 2019)

  • Phoenix strategy on track. Brand metrics remain strong, core platform is growing while significant steps to build new platforms have been taken

  • Pandora’s largest product platform, Momentsrecorded sales growth of 2% compared to Q3 2021

  • Diamonds by Pandora launched in North America on August 25 and reached 3% sales share

  • As expected, the US posted an organic decline of 3% as the market offset the unusual effects of last year’s stimulus checks. The United States recorded strong organic growth of 56% compared to Q3 2019, in line with the last quarter

  • The UK and Australia recorded double-digit organic growth compared to Q3 2021. France continued to be impacted by lower promotional activities. Germany remains healthy while Italy has seen signs of weakening consumer confidence

  • After successful testing, Pandora has increased the prices of certain items in North America, while remaining affordable. Similar price increases (4% on average) were implemented globally at the start of the fourth quarter

  • Network expansion drives organic growth of 2% in the quarter with an average EBIT margin of 40%

  • Gross margin was strong and increased by 1.2pp compared to Q3 2021. EBIT margin in Q3 2022 was 18.6%. As previously announced, Q4 2022 EBIT margin is expected to be stronger than last year

  • Stocks were deliberately increased before the high season. Inventory composition remains very healthy

  • Pandora plans to distribute DKK 5.3 billion to its shareholders in 2022, approximately 13% of market capitalization

  • The leverage effect remains low with an NIBD to EBITDA ratio at 1.1x. Pandora has a strong liquidity and funding position

Pandora confirms 2022 guidance of 4-6% organic growth and 25.0-25.5% EBIT margin. So far, trading in Q4 has been in line with Q3 performance and therefore in line with the upper end of the implied guidance range for Q4. Pandora assesses the impact of the recent fire at the European distribution center. The initial assessment suggests a limited net financial impact. The macroeconomic outlook is associated with high uncertainty.

Alexander Lacik, President and CEO of Pandora, says:
“We continued to grow travel in the third quarter and are well prepared for the commercial peak in November-December with an exciting product line-up. Our Diamonds by Pandora launch is off to a great start and new products will be added to the platform to fuel the holiday momentum.. Despite the macroeconomic and geopolitical uncertainty, the buying habits of our consumers are so far largely unchanged. With strong finances and our position in affordable gifts, we are well equipped to weather a possible recession and seize relevant investment opportunities, for example to expand our store network. We are already taking precautionary measures to ensure our profitability should circumstances change.

million danish kroner

Q3 2022

Q3 2021

9M 2022

9M 2021

FISCAL YEAR 2021

Directions for the 2022 financial year

Revenue

5,263

4,728

16,607

14,383

23,394

Organic growth, %

3%

14%

8%

32%

23%

4-6%

Sales growth (like-for-like), %

1%

5%

6%

27%

20%

Operating result (EBIT)

978

957

3,537

3,161

5,839

EBIT margin, %

18.6%

20.2%

21.3%

22.0%

25.0%

25-25.5%

Attachments

Sarah C. Figueiredo