Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q1 2024 Earnings Presentation
41 slides from Pandora A/s's earnings presentation, May 2, 2024
Slide 1: First Quarter Results 2024
02 MAY 2024 F I R S T Q U A R T E R R E S U L T S 2 0 2 4
Slide 2: Agenda of today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q1 2024 financials O4 Financial guidance O5 Appendix DISCLAIMER This presentation contains forward-looking statements, which include estimates of financial performance and targets. These statements are not guarantees of future perfor
Slide 3: Strong brand momentum, double-digit organic growth in Q1
Strong growth Solid profitability STRONG BRAND 18% 79.4% MOMENTUM Organic growth in Q1 2024 Gross margin, +190bp compared to Q1 2023 DOUBLE-DIGIT 11% 22.0% ORGANIC GROWTH LFL in Q1 2024 EBIT margin, +50bp compared to Q1 2023 IN Q1 Growth across segments Strong return on capital RAISING FY 2024 and l
Slide 4: Strong start to the year lifts revenue guidance
2024 GUIDANCE STRONG START TO THE YEAR LIFTS REVENUE GUIDANCE “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 organic g
Slide 5: Agenda of today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q1 2024 financials O4 Financial guidance O5 Appendix
Slide 6: Good momentum across all pillars
STRATEGIC GROWTH INITIATIVES GOOD MOMENTUM ACROSS ALL PILLARS • Restaging the brand – transforming • Art & Science – consumer-centric the perception of Pandora jewellery concepts • Retail transformation (Evoke 2.0) • Drive growth in core – charms & • Iconise heroes carriers • Expand design aesthetic
Slide 7: Brand restaging takes off
BUILDING A FULL JEWELLERY BRAND BRAND RESTAGING TAKES OFF LAUNCHED NEW CONTINUED BUILDING STRONG SOCIAL MEDIA BE LOVE CAMPAIGN BRAND DESIRE & PERFORMANCE RELEVANCE Launched BE LOVE campaign, which Unmissable key cultural moments: Chloe Several viral videos such as charms tour brings our brand to lif
Slide 8: Solid LFL growth across collections
BRINGING THE FULL JEWELLERY BRAND OFFERING TO LIFE SOLID LFL GROWTH ACROSS COLLECTIONS • In line with the strategy, we continue to attract more consumers into the Pandora brand – growing the core segment and fuelling with more • Our Core segment delivered a solid 3% LFL in Q1 2024. The Fuel with mor
Slide 9: Leveraging our icons
GROWING THE CORE LEVERAGING OUR ICONS Solid growth across the Charms and Carriers core - Moments and Pandora ME BUTTERFLY WITH MOVEABLE ELEVATED HEART STERLING SILVER BRACELET WITH WINGS STERLING SILVER AND SILVER RING WITH CLEAR HEART-SHAPED CLASP 14K GOLD PLATED DANGLE ZIRCONIA 9 Pandora Q4 2022 -
Slide 10: A full jewellery brand
FUELLING WITH MORE A FULL JEWELLERY BRAND LAB-GROWN TIMELESS DIAMONDS 43% 87% Like-for-like Like-for-like 10 Pandora Q1 2024 - Investor presentation Classification: Pandora Internal
Slide 11: Markets | US
MARKETS | US • US delivered another strong quarter with LFL at 9% • Strong brand momentum continues to drive traffic and effective execution helped sustain the momentum • Pandora Lab-Grown Diamonds driving significant brand 9% engagement • Double digit organic growth of 16%, fuelled by new store ope
Slide 12: Markets | Germany, UK, Italy and France
MARKETS | GERMANY, UK, ITALY AND FRANCE • Key markets in Europe accelerated LFL to 9% ➢ Germany delivered an exceptional quarter with a LFL at 67%, driven by the ongoing brand momentum 9% ➢ Despite a reduction of promotional days compared to 2023, UK delivered a broadly stable LFL at -1% ➢ Italy del
Slide 13: Markets | Asia Pacific and Rest of Pandora
MARKETS | ASIA PACIFIC AND REST OF PANDORA (17)% • China delivered -17% LFL, short of expectations ➢ Pandora will continue to focus on driving key collections and driving its core brand ideology in the market to build the brand, step by step • Australia delivered -3% LFL, reflecting a low consumer s
Slide 14: Driving consistent profitable growth
NETWORK EXPANSION DRIVING CONSISTENT PROFITABLE GROWTH 2024-2026 2024 3% organic 2023 CAGR 2022 225-275 Around 4% concept stores, net openings 4% organic 175-225 3% organic growth Pandora owned shop-in-shop, net openings organic growth growth DKK ~2.5BN Annual incremental revenue** Net Opened Opened
Slide 15: New store concept roll-out continues
EVOKE 2.0 STORE CONCEPT NEW STORE CONCEPT ROLL-OUT CONTINUES 88 EVOKE 2.0 STORES OPEN BY Q1 2024 TARGETING 1,375 – 1,425 BY 2026 EUROPE US AUSTRALIA ASIA 21 stores 8 stores 55 stores 4 stores
Slide 16: Agenda of today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q1 2024 financials O4 Financial guidance O5 Appendix
Slide 17: Key financial highlights: strong profitability
KEY FINANCIAL HIGHLIGHTS STRONG PROFITABILITY TOPLINE Q1 2024 Q1 2023 FY 2023 Revenue, DKK million 6,834 5,850 28,136 Organic growth, % +18% +1% +8% Like-for-like, % 𝟏 +11% 0% +6% FINANCIAL RATIOS Q1 2024 Q1 2023 FY 2023 Gross margin, % 79.4% 77.5% 78.6% EBIT margin, % 22.0% 21.5% 25.0% Cash…
Slide 18: Revenue performance: double-digit LFL growth
REVENUE PERFORMANCE DOUBLE-DIGIT LFL GROWTH • LFL growth was driven by increased consumer traffic across most of Q1 2024 GROWTH COMPOSITION VS Q1 2023 Pandora’s geographies %-p growth (approximately) • Network expansion benefited from 267 net new store openings in the 19% DKK million past 12 months*
Slide 19: EBIT margin: solid Q1 margin, as expected
EBIT MARGIN SOLID Q1 MARGIN, AS EXPECTED • The EBIT margin landed at 22.0%, +50bp improvement vs. Q1 2023 %-p development (approximately) • Operating leverage from broad- EBIT margin development excl. non-recurring items based growth offsets increased investments into current and 0.8% 22.9% future g
Slide 20: Agenda of today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q1 2024 financials O4 Financial guidance O5 Appendix
Slide 21: 2024 organic growth guidance: upgraded revenue outlook
2024 ORGANIC GROWTH GUIDANCE UPGRADED REVENUE OUTLOOK GUIDANCE ASSUMPTIONS • Reflecting a strong start to 2024, Pandora raises its organic growth Organic growth guidance guidance to 8-10% (previously 6- 9%) • The LFL guidance is raised to 4- %-points approximations DKK billion 6% (vs. 3-5% previousl
Slide 22: 2024 EBIT margin guidance: maintaining solid profitability
2024 EBIT MARGIN GUIDANCE MAINTAINING SOLID PROFITABILITY GUIDANCE ASSUMPTIONS • The EBIT margin guidance for 2024 is unchanged at “Around 25%” EBIT margin guidance • The leverage from the increased revenue guidance will fund %-points approximations “Around 0%” investments into a.o. Asian 0.5% “Slig
Slide 23: Executing on another year of strong cash returns
CASH DISTRIBUTION 2024 EXECUTING ON ANOTHER YEAR OF • Pandora’s total payout ratio has averaged 102% since 2012 (upper STRONG CASH RETURNS chart) • As part of the return of cash to Total payout ratio (incl. share buyback), %* Total payout ratio (incl. share buyback), % shareholders, Pandora has boug
Slide 24: Thailand trip
THAILAND TRIP Looking forward to welcoming you in Thailand 11 & 12 June 2024
Slide 25: Closing remarks
CLOSING REMARKS Phoenix strategy on Strong start to Strong profitability Guidance track with strong 2024 with 18% maintained while upgraded to brand momentum organic growth investing in current 8-10% organic and growth across and future growth growth segments
Slide 26: Our equity story
02 MAY 2024 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 glob
Slide 27: Appendix
02 MAY 2024 iy PANDORA ~ APPENDIX
Slide 28: Customers: decisions highly influenced by wearers
DIRECTIONAL ONLY CUSTOMERS | DESPITE ~50% MALE CUSTOMERS, DECISIONS ARE HIGHLY INFLUENCED BY WEARERS CUSTOMER GROUPS 2023, % Self-purchasers Female gifters Male gifters Hinted by end-user Approx. ~80% of transactions are 35% 45% 45% influenced by the wearer ~80% 15% Self-purchasers Minimum 50% shop
Slide 29: Pandora consumer: global purchase funnel
PANDORA CONSUMER GLOBAL PURCHASE FUNNEL – DEVELOPMENT I PANDORA – FEMALE AGE GROUPS Base: All women FEMALE OVERALL 18-24 YO 25-40 YO 41-64 YO Unaided awareness 33 39 32 33 Aided awareness 83 84 81 84 CR3 28 38 33 23 Consideration 26 34 29 21 Set1 CR4 60 59 60 60 Purchase2 16 21 18 13 Ownership 33 44
Slide 30: Revenue development by segments
REVENUE DEVELOPMENT BY SEGMENTS Share of DKK million 1 Q1 2024 Q1 2023 LFL 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% - Timeless2 1,524 949 43% 22% - Signature 232 229 -8% 3% - Pandora Lab-Grown Diamon
Slide 31: Revenue development by channel
REVENUE DEVELOPMENT BY CHANNEL Organic Share of DKK million Q1 2024 Q1 2023 growth revenue Pandora owned1 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%
Slide 32: Key markets revenue and like-for-like growth overview
KEY MARKETS REVENUE AND LIKE-FOR-LIKE GROWTH OVERVIEW Organic Share of DKK million Q1 2024 Q1 2023 LFL Growth 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% To
Slide 33: Store network development
STORE NETWORK DEVELOPMENT Total concept stores O&O concept stores Growth O&O Growth O&O Growth Growth stores stores Q1 2024 Q1 2024 O&O Q1 2024 Q1 2024 NUMBER OF CONCEPT STORES Q1 2024 Q4 2023 Q1 2023 / Q4 2023 /Q1 2023 Q1 2024 / Q4 2023 /Q1 2023 US 457 447 417 10 40 366 21 89 China 212 219 237 -7 -
Slide 34: Consolidated income statement
CONSOLIDATED INCOME STATEMENT DKK million Q1 2024 Q1 2023 FY 2023 Revenue 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
Slide 35: Working capital
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%
Slide 36: Sustainability at a glance
SUSTAINABILITY AT A GLANCE 2023 HIGHLIGHTS Ecpmmmmg For the second year : ina row, Pandora was 2 recognised with an “A” = score for transparency and performance on climate change by CDP Pandora ranked #21 on sustainability out of 750 companies on TIME Magazine's World's Best ‘Companies 2023; Pandora
Slide 37: Hedging policy and cost of goods sold break down
HEDGING POLICY AND COST OF GOODS SOLD BREAK DOWN Commodity hedging policy is to hedge at least an average Cost of goods sold break down of 70% of future 12 months’ use in production For illustrative purposes Other Gold Production labour & overheads Customs & Freight Other raw materials Silver OEM/OD
Slide 38: Capital allocation: significant cash returns for 2024
CAPITAL ALLOCATION SIGNIFICANT CASH RETURNS FOR 2024 1 2 3 Financial Dividends Share All excess strength & buybacks cash returned investments Maintain investment Progressive dividend Remaining cash paid Targeting DKK 5.5BN grade ratings policy out through share cash returns in 2024** buybacks CAPEX
Slide 39: Investor relations contact details
INVESTOR RELATIONS CONTACT DETAILS Investor Relations team Share information Trading symbol PNDORA Bilal Aziz Identification number/ISIN DK0060252690 VP, Investor Relations & Treasury GICS 25203010 +45 3137 9486 biazi@pandora.net Number of shares 82,000,000 Sector Apparel, Accessories & Luxury Goods
Slide 40: Disclaimer
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
Slide 41: C) PANDORA ‘ri
Ad NY C) PANDORA ‘ri