Pandora A/s · OMXCOP:PNDORA
Pandora A/s — Pandora A/S Ord — Q4 2023 Earnings Presentation
46 slides from Pandora A/s's earnings presentation, Feb 7, 2024
Slide 1: Fourth Quarter Results 2023
7 F E B R U A R Y 2 0 2 4 F O U R T H Q U A R T E R R E S U L T S 2 0 2 3
Slide 2: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q4 2023 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: FY 2023 Results Ahead of Previous Guidance
Organic growth ahead of guidance Solid profitability underpinned by strong gross margins FY 2023 RESULTS +8% 78.6% Organic growth in 2023 2023 gross margin AHEAD OF PREVIOUS +12% in Q4 2023 79.3% in Q4 2023 GUIDANCE +6% 25.0% DOUBLE-DIGIT ORGANIC LFL in 2023 +9% in Q4 2023 2023 EBIT margin 34.0% in
Slide 4: Strong Sustainability Performance in 2023
STRONG SUSTAINABILITY PERFORMANCE IN 2023 -27% 100% Reduction in total greenhouse Recycled silver and gold gas emissions compared to our purchased as of December 2019 baseline 2023 TOTAL GREENHOUSE GAS EMISSIONS 34% Women in leadership, up from 29% in 2022 2019 2023 2030 TARGET 4 Pandora Q4 2023 - I
Slide 5: 2024 Guidance: The Growth Journey Continues
2024 GUIDANCE “We are very pleased with how we ended 2023 with strong trading across the holiday season. THE GROWTH JOURNEY CONTINUES IN 2024 Looking back at the past two years since we launched the Phoenix growth strategy we are proud of how our strategic initiatives have come together to consisten
Slide 6: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q4 2023 financials O4 Financial guidance O5 Appendix
Slide 7: Targets from Capital Markets Day 2021 Achieved
7 DELIVERING ON PROMISES DESPITE EXTERNAL HEADWINDS TARGETS FROM CAPITAL MARKETS DAY 2021 ACHIEVED ORGANIC GROWTH, % EBIT MARGIN, % 7.5% 25% CAGR ‘21-’23 vs. target of vs. target of 5-7% 25-27% by 2023 Classification: Pandora Internal
Slide 8: 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 9: Strong Brand Momentum Continues
UNMISSABLE OVER THE HOLIDAY PERIOD STRONG BRAND MOMENTUM CONTINUES BRITISH FASHION “LOVES, UNBOXED” GLOBAL AWARDS CAMPAIGN AMPLIFICATION +45% Media Impact Value Y/Y Launched 2023 holiday Pandora took over the Sphere with 572 press mentions campaign in Las Vegas 9 Pandora Q4 2023 - Investor presentat
Slide 10: Taking the Brand to the Next Level
UNVEILING 2024 BRAND CAMPAIGN: BE LOVE TAKING THE BRAND TO THE NEXT LEVEL 10 Pandora Q4 2023 - Investor presentation Classification: Pandora Internal
Slide 11: Leveraging Breadth of Product Offering
GROWING THE CORE LEVERAGING BREADTH OF PRODUCT OFFERING Solid growth across the Charms and Carriers core, Moments and Pandora ME. Leveraging a strong base whilst building new icons STERLING SILVER SMALL GLOW-IN-THE-DARK CELESTIAL SUN AND FLIREFLY DANGLE LINK BRACELET STUDDED CHAIN MOON RINGS CHARM 1
Slide 12: A Full Jewellery Brand
FUELLING WITH MORE A FULL JEWELLERY BRAND LAB-GROWN TIMELESS DIAMONDS +31% +83% Like-for-like Like-for-like 12 Pandora Q4 2023 - Investor presentation Classification: Pandora Internal
Slide 13: Democratising Diamonds
PANDORA LAB-GROWN DIAMONDS DEMOCRATISING DIAMONDS Expanded Lab-Grown Diamond assortment now spans across four collections Available in 700+ stores worldwide, across US, Canada, UK, Australia, Mexico and Brazil FY 2023 Lab-Grown Diamond revenue of DKK 265 million Progress toward ambition to reach DKK
Slide 14: Personalisation: In-Store and Online Engraving
PERSONALISATION: IN-STORE AND ONLINE ENGRAVING CONSUMERS LOVE IT! ENGRAVING ~1.450 Total number of stores with engraving services ~850 ~350 ~200 #PandoraEngraving reached more than 200 million views and 1,110+ videos on 2021 2022 2023 2024 TikTok in 2023 # markets with online engraving +7 +5 14 Pand
Slide 15: Solid & Consistent LFL Growth
Strong runway ahead for solid LFL growth CAPTURING LFL GROWTH OPPORTUNITIES SOLID & CONSISTENT • Good momentum already across strategic initiatives in 2023 - notable step up in LFL GROWTH brand investments driving LFL growth • Further scaling up investments in the Phoenix strategy to continuously dr
Slide 16: Markets | US
MARKETS | US • In Q4 2023, US saw a notable uptick in LFL growth to +10%, fueled by strong brand momentum • Pandora Lab-Grown Diamonds and the Timeless collection created significant brand excitement +10% • Performance in the wholesale channel improved during Q4, but a noticeable gap remains compare
Slide 17: Markets | Germany, UK, Italy and France
MARKETS | GERMANY, UK, ITALY AND FRANCE • Key markets in Europe continues to be solid at +5% LFL ➢ Germany delivered a strong performance with an accelerated LFL growth of +39%, driven by the strong brand momentum ➢ Despite a reduction of promotional days and continued low +5% consumer sentiment, UK
Slide 18: Markets | Asia Pacific and Rest of Pandora
MARKETS | ASIA PACIFIC AND REST OF PANDORA • China delivered -11% LFL, short of expectations (11)% ➢ The brand relaunch in Shanghai showed positive signs. However, the recovery is modest and constrained by the market’s macroeconomic weakness • Australia delivered -6% LFL compared to Q4 2022, driven
Slide 19: Network Expansion: Driving Consistent Profitable Growth
NETWORK EXPANSION DRIVING CONSISTENT PROFITABLE GROWTH 2024-2026 2024 +3% organic 2023 CAGR 2022 225-275 +3% to +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 Op
Slide 20: New Store Concept Roll-out Continues
EVOKE 2.0 STORE CONCEPT NEW STORE CONCEPT ROLL-OUT CONTINUES Evoke 2.0 has an upscaled look and feel that further elevates the desirability of the brand Although early days, initial results have been encouraging with good performance across segments and during peak trading periods During 2023, 55 Ev
Slide 21: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q4 2023 financials O4 Financial guidance O5 Appendix
Slide 22: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS STRONG GROSS MARGIN AND CASH FLOW TOPLINE Q4 2023 Q4 2022 FY 2023 FY 2022 Revenue, DKK million 10,820 9,856 28,136 26,463 Organic growth, % +12% +4% +8% +7% Like-for-like, %* +9% -1% +6% +4% FINANCIAL RATIOS Q4 2023 Q4 2022 FY 2023 FY 2022 Gross margin, % 79.3% 76.2% 78.6% 7
Slide 23: Revenue Performance: Broad-Based LFL Growth
REVENUE PERFORMANCE BROAD-BASED LFL GROWTH • LFL growth of +9% was broad- based across collections and Q4 2023 GROWTH COMPOSITION VS Q4 2022 geographies %-p growth (approximately) • Network expansion benefitted from 223* net new store openings 13% 1% 12% 1% 4% 3% DKK million • A drag from a.o. sell-
Slide 24: EBIT Margin: Solid Q4 Margin, As Expected
EBIT MARGIN SOLID Q4 MARGIN, AS EXPECTED • The EBIT margin landed at 34%, +150bp vs. Q4 2022, and in line with expectations %-p development (approximately) • As previously flagged, the EBIT EBIT margin development excl. non-recurring items margin benefitted from cost 34.7% phasing between the quarte
Slide 25: Agenda of Today
AGENDA OF TODAY O1 Executive summary O2 Phoenix strategy update O3 Q3 2023 financials O4 Financial guidance O5 Appendix
Slide 26: 2024 Organic Growth Guidance
2024 ORGANIC GROWTH GUIDANCE TARGETING ANOTHER YEAR OF GUIDANCE ASSUMPTIONS PROFITABLE GROWTH • Pandora exits 2023 with solid momentum and enter 2024 with a solid portfolio of growth initiatives Organic growth guidance • The macroeconomic outlook for 2024 is, however, uncertain and continued inflati
Slide 27: 2024 EBIT Margin Guidance
2024 EBIT MARGIN GUIDANCE GUIDANCE ASSUMPTIONS MAINTAINING SOLID PROFITABILITY • The EBIT margin guidance for 2024 is “Around 25%” • In 2024, Pandora will scale up EBIT margin guidance investments to capture the vast current and future growth %-points approximations opportunities. This includes amon
Slide 28: 2024 Other Guidance Parameters
2024 OTHER GUIDANCE PARAMETERS GUIDANCE ASSUMPTIONS • CAPEX for the year is expected to end between 6-7% share of revenue • Store network ➢ 75-125 net concept store openings ➢ 25-50 net Pandora owned shop- in-shop openings • Tax: The effective tax rate is expected to be 24-25% • Net financial expens
Slide 29: Cash Distribution 2024
CASH DISTRIBUTION 2024 ANOTHER YEAR OF SIGNIFICANT CASH • During 2023, Pandora returned its highest ever cash distribution of RETURNS DKK 6.4 billion • In line with Pandora’s history of Cash distribution since 2017 (DKK billion) returning significant cash back to Share buyback, Dividend programme si
Slide 30: Save the Date
SAVE THE DATE Investor and Analyst trip to Pandora’s state of the art Crafting & Supply facilities in Thailand 11 & 12 June 2024 More information will follow
Slide 31: Closing Remarks
CLOSING REMARKS Strong brand Solid performance Solid and profitable Consistent cash momentum drives in FY 2023 and growth to continue returns: returning broad-based good finish to the in FY 2024 6% of market cap increase in traffic year
Slide 32: Our Equity Story
7 F E B R U A R Y 2 0 2 4 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 fragmen
Slide 33: Appendix
7 F E B R U A R Y 2 0 2 4 APPENDIX
Slide 34: Pandora Consumer: Customer Groups
DIRECTIONAL ONLY PANDORA CONSUMER CUSTOMER GROUPS % Self-purchasers Female gifters Male gifters Hinted by end-user Minimum 75% 100% ~30% ~35% ~35% of all purchases ~15% ~75% are ‘decided’ by 5-10% Self-purchasers shop more frequently ~15% Minimum 50% of all gifts are hinted 5-10% women (index ~130)
Slide 35: Pandora Consumer: Purchase Funnel
PANDORA CONSUMER PURCHASE FUNNEL I PANDORA – FEMALE AGE GROUPS Base: All women FEMALE OVERALL 18-24 YO 25-40 YO 41-64 YO Unaided awareness 33 35 33 33 Aided awareness 82 83 81 83 CR3 28 38 33 23 Consideration 23 31 27 19 Set1 CR4 60 59 60 60 Purchase2 14 18 16 11 Ownership 32 39 39 39 N=31,016 N=4,1
Slide 36: Revenue Development by Segments
REVENUE DEVELOPMENT BY SEGMENTS Share of DKK million 1 FY 2023 FY 2022 LFL revenue Core 21,951 21,156 2% 78% - Moments 18,369 17,727 2% 65% - Collabs 2,681 2,614 1% 10% - ME 900 815 12% 3% Fuel with more 6,186 5,308 14% 22% - Timeless2 4,792 3,847 20% 17% - Signature 1,129 1,248 -11% 4% - Pandora La
Slide 37: Revenue Development by Channel
REVENUE DEVELOPMENT BY CHANNEL Organic Share of DKK million FY 2023 FY 2022 growth revenue Pandora owned retail 22,034 19,115 15% 78% - of which concept stores 14,415 12,150 17% 51% - of which online stores 5,892 5,612 7% 21% - of which other points of sale 1,727 1,353 25% 6% Wholesale 5,369 6,628 -
Slide 38: Key Markets Revenue and Like-for-Like Growth Overview
KEY MARKETS REVENUE AND LIKE-FOR-LIKE GROWTH OVERVIEW Organic Share of DKK million FY 2023 FY 2022 LFL Growth revenue US 8,306 7,907 2% 5% 30% China 564 737 -9% -18% 2% UK 3,821 3,802 -1% 2% 14% Italy 2,540 2,580 -3% -2% 9% Australia 1,120 1,271 -6% -6% 4% France 1,196 1,190 1% 0% 4% Germany 1,527 1
Slide 39: Store Network Development
STORE NETWORK DEVELOPMENT Growth Q4 2023 Growth Q4 2023 NUMBER OF OTHER POINTS OF SALE Q4 2023 Q3 2023 Q4 2022 /Q3 2023 /Q4 2022 Other points of sale (retail) 578 509 464 69 114 Other points of sale (wholesale) 3,144 3,159 3,200 -15 -56 Other points of sale (third-party) 313 321 321 -8 -8 Other poin
Slide 40: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT DKK million Q4 2023 Q4 2022 FY 2023 FY 2022 Revenue 10,820 9,856 28,136 26,463 Cost of sales -2,241 -2,345 -6,012 -6,273 Gross profit 8,579 7,511 22,125 20,190 Sales, distribution and marketing -4,237 -3,720 -12,707 -11,322 expenses Administrative expenses -668 -586 -2,
Slide 41: Working Capital
WORKING CAPITAL Share of preceding 12 months’ revenue Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Inventories 14.8% 17.8% 16.6% 16.3% 15.9% Trade receivables 4.8% 3.4% 2.9% 3.2% 4.8% Trade payables -11.4% -8.7% -8.5% -8.2% -11.8% Other net working capital elements -6.4% -3.3% -2.6% -2.4% -4.7% Total 1.8
Slide 42: 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/ODM
Slide 43: 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 44: 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 89,000,000 Sector Apparel, Accessories & Luxury Goods
Slide 45: 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 46: C) PANDORA ‘ri
Ad NY C) PANDORA ‘ri